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Intergovernmental Grants and Bureaucratic Power

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  • Dahlberg, Matz

    ()
    (Department of Economics)

  • Lundqvist, Heléne

    ()
    (Department of Economics)

  • Mörk, Eva

    ()
    (IFAU)

Abstract

In their role as agenda setters and implementers of political decisions, bureaucrats potentially have the power to influence decisions in their own favor. It is however difficult to empirically test whether bureaucrats actually are involved in such actions. In this paper we suggest and apply a new way of testing the hypothesis that bureaucrats can and do in fact affect policy to their own benefit. Making use of a discontinuity in the Swedish grant system, we estimate causal effects of intergovernmental grants on different types of personnel employed by the local governments. On the margin, we find a large, positive effect of grants on the number of bureaucrats in the central administration, but no effects on the number of personnel in other important sectors run by the local government (child care, schools and elderly care). These results support the view that bureaucrats are able to, and do indeed, affect the allocation of grants within municipalities to support own goals.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2008:12.

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Length: 34 pages
Date of creation: 20 Oct 2008
Date of revision:
Handle: RePEc:hhs:uunewp:2008_012

Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Email:
Web page: http://www.nek.uu.se/
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Keywords: Fiscal federalism; grants; bureaucrats; rent seeking; discontinuity analysis;

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