Why Not Fully Spend a Conditional Block Grant?
AbstractThis paper studies a conditional block grant that Dutch municipalities receive for welfare-to-work programs. Many municipalities do not fully use this grant, although programs are beneficial for them. We argue that municipalities incur expenses to use the grant. If these costs are substantial, then it is optimal not to fully use the grant. Based on municipality-specific data on grants and actual expenditures, we estimate that municipalities have to add about 90 cents from their own resources to spend 1 euro of the grant. As a result, the conditional block grant is de facto a closed-ended matching grant.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6712.
Length: 44 pages
Date of creation: Jul 2012
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernd Huber & Marco Runkel, 2003.
"Optimal Design of Intergovernmental Grants under Asymmetric Information,"
CESifo Working Paper Series
919, CESifo Group Munich.
- Bernd Huber & Marco Runkel, 2006. "Optimal Design of Intergovernmental Grants Under Asymmetric Information," International Tax and Public Finance, Springer, vol. 13(1), pages 25-41, January.
- Monica Singhal, 2006.
"Special Interest Groups and the Allocation of Public Funds,"
NBER Working Papers
12037, National Bureau of Economic Research, Inc.
- Singhal, Monica, 2008. "Special interest groups and the allocation of public funds," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 548-564, April.
- Singhal, Monica, 2006. "Special Interest Groups and the Allocation of Public Funds," Working Paper Series rwp06-004, Harvard University, John F. Kennedy School of Government.
- Cashel-Cordo, Peter & Craig, Steven G., 1990.
"The public sector impact of international resource transfers,"
Journal of Development Economics,
Elsevier, vol. 32(1), pages 17-42, January.
- Cashel-Cordo, P. & Craig, S.G., 1988. "The Public Sector Impact Of International Resource Transfers," Papers 24, Houston - Department of Economics.
- Daniel Bergvall & Claire Charbit & Dirk-Jan Kraan & Olaf Merk, 2006.
"Intergovernmental Transfers and Decentralised Public Spending,"
OECD Working Papers on Fiscal Federalism
3, OECD Publishing.
- Daniel Bergvall & Claire Charbit & Dirk-Jan Kraan & Olaf Merk, 2005. "Intergovernmental Transfers and Decentralised Public Spending," OECD Journal on Budgeting, OECD Publishing, vol. 5(4), pages 111-158.
- Craig Volden, 2007. "Intergovernmental Grants: A Formal Model of Interrelated National and Subnational Political Decisions," Publius: The Journal of Federalism, Oxford University Press, vol. 37(2), pages 209-243, Spring.
- Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications, The World Bank, number 7171, October.
- Benedicta Marzinotto, 2011. "A European fund for economic revival in crisis countries," Policy Contributions 504, Bruegel.
- Pierre Koning, 2009. "Contracting welfare-to-work services: use and usefulness," CPB Discussion Paper 135, CPB Netherlands Bureau for Economic Policy Analysis.
- David E. Card & Jochen Kluve & Andrea Weber, 2009.
"Active Labor Market Policy Evaluations: A Meta-analysis,"
NRN working papers
2009-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages F452-F477, November.
- Card, David & Kluve, Jochen & Weber, Andrea, 2009. "Active Labor Market Policy Evaluations: A Meta-Analysis," IZA Discussion Papers 4002, Institute for the Study of Labor (IZA).
- David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations: A Meta-analysis," CESifo Working Paper Series 2570, CESifo Group Munich.
- David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labor Market Policy Evaluations: A Meta-Analysis," NBER Working Papers 16173, National Bureau of Economic Research, Inc.
- David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations – A Meta-analysis," Ruhr Economic Papers 0086, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Gordon, Nora, 2004. "Do federal grants boost school spending? Evidence from Title I," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1771-1792, August.
- Alesha E. Doan & Deborah R. McFarlane, 2012. "Saying No to Abstinence-Only Education: An Analysis of State Decision-Making," Publius: The Journal of Federalism, Oxford University Press, vol. 42(4), pages 613-635, October.
- Koning, Pierre, 2013. "Making Work Pay for the Indebted: The Effect of Debt Services on the Exit Rates of Unemployed Individuals," IZA Discussion Papers 7873, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.