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What Determines the Allocation of National Government Grants to the States?

In: Public Choice Analyses of American Economic History

Author

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  • John Joseph Wallis

    (University of Maryland)

Abstract

During the New Deal the federal government initiated a policy of massive grants to states for support of social welfare and other programs. Since that time grants have come to be an integral part of the American fiscal system, and scholars have continued to debate whether the allocation of federal grants between the states is motivated primarily by political or social and economic objectives. This paper shows that, during the 1930s, both political and economic effects were important determinants of grant allocation, but that the Congressional factors considered by Anderson and Tollison are not important while the Presidential factors considered by Wright are. When the analysis is extended to the years 1932–1982, however, Congressional influences do seem important. On the other hand, the dominant influence on federal grant policy over the larger sample appears to be state government expenditures, while both political and economic influences play a smaller role.

Suggested Citation

  • John Joseph Wallis, 2018. "What Determines the Allocation of National Government Grants to the States?," Studies in Public Choice, in: Joshua Hall & Marcus Witcher (ed.), Public Choice Analyses of American Economic History, chapter 0, pages 181-199, Springer.
    • Handle: RePEc:spr:stpchp:978-3-319-77592-0_8
    DOI: 10.1007/978-3-319-77592-0_8
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