Abstract
This study examines five national public policy areas where states and local governments received grants-in-aid from the federal government; these grants approximate a fifth of their yearly revenue budgets. Knowing the historical trends and concentrations can minimize expectation errors of practitioners and policy makers and facilitate future revenue planning. The grants examined between 1940 and 2010 include income security, health, education and training, economic and regional development, and transportation. The study uses agency theory to rationalize relationships among the governments, and applies statistical modeling, multiple means comparisons and discriminant analyses to test whether there are distinct policy concentrations and differences among policy regimes. Our findings show transfers were continuous, physically important and unaffected significantly by adjustments due to size and prices. The study found concentrations and differences among policy regimes.
