Endogenous Federal Grants and Crowd-out of State Government Spending : Theory and Evidence from the Federal Highway Aid Program

  title={Endogenous Federal Grants and Crowd-out of State Government Spending : Theory and Evidence from the Federal Highway Aid Program},
  author={Wallace E. Oates},
Contrary to simple theoretical predictions, existing evidence suggests that federal grants do not crowd out state government spending. A legislative bargaining model with endogenous grants documents a positive correlation between grant receipts and preferences for public goods; this correlation has likely biased existing work against measuring crowd-out. To correct for such endogeneity, the model motivates instruments based on the political power of state congressional delegations. Exploiting… CONTINUE READING


Publications referenced by this paper.
Showing 1-10 of 41 references

Policy and Pork: The Use of Pork Barrel Projects to Build Policy Coalitions in the House of Representatives.

  • Evans, Diana
  • American Journal of Political Science,
  • 1994
Highly Influential
4 Excerpts

Asymmetric Information and Agenda Control: The Bases of Monopoly Power in Public Spending.

  • Radu Filimon, Thomas Romer, Howard. Rosenthal
  • Journal of Public Economics, February 1982,
  • 1982
Highly Influential
5 Excerpts

Do Legislators Vote Their Constituents

  • Bogart, T William, VanDoren, M Peter
  • Wallets? (And How Would We Know If They Did…
  • 1993
Highly Influential
3 Excerpts

Artery Tensions Growing with Costs.

  • Boston Globe
  • March 25,
  • 1998

Big Dig Leaves Highways Dry; Fed Cuts

  • Boston Herald
  • Rising Costs Make Other State Road Work Wait…
  • 1998

House Committee Members Pack Roads Bill.

  • Associated Press
  • March 26,
  • 1998

The Flypaper Effect: Identifying Areas for Further Research.

  • Bailey, J Stephen, Connolly, Stephen
  • Public Choice,
  • 1998

The Relationship between State and Income Taxes and Local Property Taxes: Education Finance in New Jersey.

  • Goodspeed, J Timothy
  • National Tax Journal,
  • 1998

Congressional Committees and the Political Economy of Federal Outlays.

  • Alvarez, R. Michael, Saving, L Jason
  • Public Choice, July 1997,
  • 1997

“ Local Property and State Income Taxes : The Role of Interjurisdic - tional Competition and Collusion

  • Nechyba, J Thomas
  • Journal of Political Economy
  • 1997

Similar Papers

Loading similar papers…