Earmarked Grants and Accountability in Government

26 Pages Posted: 3 Nov 2009

See all articles by Richard M. Bird

Richard M. Bird

University of Toronto - Joseph L. Rotman School of Management; Georgia State University - Andrew Young School of Public Policy

Michael Smart

University of Toronto - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 2, 2009

Abstract

Over the years the number and importance of earmarked grants has at times risen and at times fallen in different countries. The conventional theory of fiscal federalism, which sees earmarking largely as a means to deal with positive spillovers in local expenditures, explains neither the level of such grants nor the trends over time. Nor can it readily account for the existence of non-matching, but still categorical, block grants. In this paper, we explore several alternative perspectives that interpret earmarking as a response to information failures between governments and, even more fundamentally, to accountability issues that arise between governments as well as between governments and voters.

Keywords: grants, grants, earmarking, accountability, fiscal federalism, intergovernmental transfers

JEL Classification: H77

Suggested Citation

Bird, Richard Miller and Smart, Michael, Earmarked Grants and Accountability in Government (November 2, 2009). Rotman School of Management Working Paper No. 1498775, Available at SSRN: https://ssrn.com/abstract=1498775 or http://dx.doi.org/10.2139/ssrn.1498775

Richard Miller Bird (Contact Author)

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
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905-274-8841 (Phone)

Georgia State University - Andrew Young School of Public Policy

International Studies Program
Atlanta, GA 30303-3083
United States

HOME PAGE: http://www.aysps.gsu.edu

Michael Smart

University of Toronto - Department of Economics ( email )

150 St. George Street
Institute for Policy Analysis
Toronto, Ontario M5S 3G7
Canada
416-978-5119 (Phone)
416-978-6713 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

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