Taxonomy of Federal Aid Design Features

The key features of federal aid programs include form of the grant, the limits on funding, and the formula for distribution of grants across the grant recipient jurisdictions. The federal grant forms considered in the U.S. can be classified as categorical, block, and shared revenues (Table 9.2). A categorical grant is one that is directed to a narrowly specified activity. Block grants provide a broader functional focus and greater * Oates (2003) cautions that an excessive use of central...

Composition of Federal Aid by Form of the Grant

In measuring the fiscal effects of intergovernmental grants on the grant recipient's spending and other budgetary decisions, the disaggregation of federal grants by form is of crucial importance (Wilde 1971 Oates, 1972 Gramlich, 1977 Inman and Rubinfeld, 1997). The data on federal intergovernmental grants published by the U.S. Census Bureau and U.S. Office of Management and Budget are organized along functional lines. This has always been a major obstacle for those doing empirical work on the...