The Politics of Competitive Federalism: A Race to the Bottom in Welfare Benefits?

tion in benefit changes across the states. This article argues that a more accurate specification of welfare politics focuses on the presence or absence of actual legislated payment increases in the face of inflation. Logit and ordered logit analyses of pay? ment changes under the AFDC pro? gram in the states from 1975 to 1990 show the role of inflation and political considerations in determining benefit adjustments. Rather than states ac? tively undercutting one another to avoid becoming welfare magnets, this article supports a different version of competitive federalism. States wish to increase their welfare benefits, but hesitate until neighboring states do the same.