State Responses to Declining Federal Support: Behavior in the Post‐1978 Era

American J Political Sci

2005

106

Many policies in the United States are jointly determined by federal and state actions. In the game theoretic model offered here, politicians in both the state and national governments seek credit for providing goods desired by the public and avoid blame for the taxes necessary to provide the goods. In line with Peterson's (1995) theory of functional federalism, the level of government that is better able to supply particular goods and services tends to take the lead in their provision, even to the extent of fully crowding out much less efficient governments. However, under a broad set of circumstances, both state and national politicians seek credit via public spending, and their joint provision leads to a relative "oversupply" of public goods and services, and thus to "overtaxation." Under joint provision, states vary in their responses to changing federal spending patterns based both on the causes of the national changes and on state characteristics.

Section: Proposition 3 Given Good Provision By Both the State And Nasupporting

confidence: 68%

Intergovernmental Political Competition in American Federalism

American J Political Sci

2005

106

“…Therefore, if a grant program is established or expanded in response to increased public demand in a given program area, but cut back or abandoned in response to a decrease in the national government's relative ability to raise taxes, then such an asymmetric response to changing grant conditions might occur. This may correspond to the finding of grant increases for popular programs in the 1960s and 1970s that were cut back in the face of federal deficits in the 1970s and 1980s (Stonecash 1990, Weaver 1996. On the other hand, a reverse of such reasons for grant changes could result in the appearance of no spending rises associated with grant increases and dramatic spending cuts associated with declining grants, similar to Stine's (1994) finding of Pennsylvania counties' responses to federal government aid.…”

Section: Asymmetric Responses To Grantssupporting

confidence: 63%

“…With the federal government in the United States running deficits throughout the 1970s and 1980s, a variety of federal grants to states and localities were reduced, at least relative to inflation. A number of scholars found that, for many of these program areas, recipient governments replaced lost funds with their own revenues (Forrester and Spindler 1990;Stonecash 1990;Stotsky 1991). Students of federalism started to speculate that there may be an ''asymmetric response'' to grant increases and decreases (Oates 1999).…”

Section: Asymmetric Responses To Grantsmentioning

confidence: 99%

Intergovernmental Grants: A Formal Model of Interrelated National and Subnational Political Decisions

Publius: The Journal of Federalism

2007

Intergovernmental grants are based on the interrelated choices of: (i) the national government deciding whether to offer the grant; (ii) the national government determining grant conditions; (iii) the subnational government deciding whether to accept the grant; and (iv) the subnational government determining policy, including spending levels, upon grant receipt. Empirically and theoretically, scholars often study these decisions separately, leading to an incomplete understanding of grant-related behavior. This article develops a noncooperative game theoretic model that simultaneously captures all four of these decisions. This approach helps to better explain puzzles surrounding intergovernmental grants, including the 'flypaper effect, ' asymmetric responses of recipient governments to grant increases and decreases, the grant-acceptance decisions of subnational governments, and tradeoffs between the size of grants and the strings that are attached.

“…There is substantial empirical evidence of a "flypaper effect" of grant money sticking where it hits (see reviews and examinations by Fossett, 1990;Gramlich, 1977;Hines & Thaler, 1995). And states and localities often substitute their own funds for previous federal funds on a decrease in intergovernmental grants (Forrester & Spindler, 1990;Stonecash, 1990;Stotsky, 1991;Volden, 1999). For many mayors and city managers, these long-term costs weighed heavily.…”

Section: Grant Receipts In the Cops Programmentioning

confidence: 99%

Means, Motive, and Opportunity

Choi

Turner

American Politics Research

2002

Both local and national political considerations may play a role in determining the distribution of intergovernmental grant funds. This article focuses on the Community Oriented Policing Services program from 1993 to 1997 to examine how local politicians weigh their electoral desires against community needs in their decisions to apply for grants and how national politicians and bureaucrats similarly determine their responses to cities' requests. Due to electoral pressures, mayors were more likely than city managers to seek the short-term grants. National party politics also seemed to affect the allocation of grant funds. Finally, community needs played a role, as cities with high crime rates, police-funding shortages, and the ability to support the new officers after the grants expired were more likely to request grants. Communities with larger minority populations were less likely to request grants and were given fewer funds.