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On the Effects of Intergovernmental Grants: A Survey

Author

Listed:
  • Manuel E. Lago

    (Governance and Economics research Network (GEN) and University College of Dublin (UCD))

  • Santiago Lago-Penas

    (Governance and Economics research Network (GEN) and Universidade de Vigo)

  • Jorge Martinez-Vazquez

    (International Center for Public Policy, Georgia State University, Atlanta)

Abstract

This paper offers a comprehensive and updated review of the effects of intergovernmental grants. We focus on the main findings in the existing literature on the effects of intergovernmental grants on tax policy and choices, expenditure decisions, fiscal stability and behavioral choices, and political economy. The intricate nature of the subject, intrinsically, does not allow for an all-inclusive survey, but we aim to provide a thorough examination and update of the most salient effects of intergovernmental grants, while indicating areas for further research.

Suggested Citation

  • Manuel E. Lago & Santiago Lago-Penas & Jorge Martinez-Vazquez, 2023. "On the Effects of Intergovernmental Grants: A Survey," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2310, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper2310
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    File URL: https://icepp.gsu.edu/files/2023/05/paper2310.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Søren Frank Etzerodt & Niels Jørgen Mau Pedersen, 2024. "Formula-based Grants as Pork Barrel Politics: Targetability and the Political-strategic Use of Grants," Munich Papers in Political Economy 34, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    3. Salotti, Simone & Casas, Pablo & Christou, Tryfonas & D’Apice, Pasquale & García-Rodríguez, Abián & Lazarou, Nicholas Joseph, 2025. "Fiscal federalism and Cohesion Policy in the European Union NUTS-2 regions," European Journal of Political Economy, Elsevier, vol. 89(C).
    4. Mauri, Nicola, 2024. "How fiscally autonomous are local governments? An empirical test," Journal of Public Economics, Elsevier, vol. 239(C).
    5. Puig Jorge Pablo & Porto Alberto & Vidal Juan Bautista, 2024. "Intergovernmental transfers and dynamic adjustment of subnational budgets," Asociación Argentina de Economía Política: Working Papers 4754, Asociación Argentina de Economía Política.
    6. Santos, Antonio Marcos Silva & Lima, Ricardo Carvalho de Andrade, 2025. "The vertical fiscal externalities of a territorial reform: Evidence from Brazil," Economics Letters, Elsevier, vol. 253(C).
    7. Mauri, Nicola & Peter, Linus, 2025. "The influence of intergovernmental transfers on local taxes: Evidence from Switzerland," Regional Science and Urban Economics, Elsevier, vol. 115(C).

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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