Transportation Governance Under Fiscal Stress: Evidence From State Highway Spending

This study examines whether a state transportation/highway commission (STC) shapes state highway expenditure decisions, particularly during periods of fiscal stress. Using panel data covering 2006–2020, the results show that STCs exert limited influence on highway capital and routine maintenance spending during fiscally constrained periods but play more significant roles in shaping highway capital spending decisions in normal fiscal years. In addition, variation in the delegated authorities of STC members is associated with differences in highway capital and maintenance spending, indicating that institutional designs and governance arrangements matter for highway spending. The results contribute to the public works management and policy literature by expanding state-level data on STCs and showing how their presence and institutional designs relate to highway spending decisions. It also adds nuance to the cutback management literature for the limited effects of STCs’ ability to constrain retrenchment during periods of fiscal stress.