Intergovernmental Grants and Bureaucratic Power

• In their role as agenda setters and implementers of political decisions, bureaucrats potentially have the power to influence decisions in their own favor. It is however difficult to empirically test whether bureaucrats actually are involved in such actions. In this paper we suggest and apply a new way of testing the hypothesis that bureaucrats can and do in fact affect policy to their own benefit. Making use of a discontinuity in the Swedish grant system, we estimate causal effects of intergovernmental grants on different types of personnel employed by the local governments. On the margin, we find a large, positive effect of grants on the number of bureaucrats in the central administration, but no effects on the number of personnel in other important sectors runby the local government (child care, schools and elderly care). These results support theview that bureaucrats are able to, and do indeed, affect the allocation of grants withinmunicipalities to support own goals.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Fiscal federalism

grants

bureaucrats

rent seeking

discontinuity analysis

Nationalekonomi

Economics

Publikations- och innehållstyp

vet (ämneskategori)

rap (ämneskategori)