Have the gasb no. 34 infrastructure reporting requirements affected state highway spending?

Abstract

Abstract GASB Statement No. 34 required state and local governments to report information regarding general infrastructure in financial statements, to improve understanding of the organization's investments in capital assets. Some proponents suggested that this information would affect management practices and potentially resource allocation decisions, but initial survey data found limited evidence of effects. We use dynamic panel analysis covering 47 states from 1995 to 2009 to explore whether implementation of GASB 34 affected state highway capital and maintenance spending. We find evidence of increased capital spending, but no statistically significant change in maintenance expenditures. The choice of reporting method was not found to affect spending outcomes.