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The Tools of Government: Grants

The Tools of Government: Grants. David R. Beam & Timothy J. Conlan. Defining the Tool: Grants. Defining Features Stimulating or supporting Founded in land grants Primarily cash payment Directed toward other levels of government, nonprofit organizations, universities, or individuals

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The Tools of Government: Grants

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  1. The Tools of Government: Grants David R. Beam & Timothy J. Conlan

  2. Defining the Tool: Grants • Defining Features • Stimulating or supporting • Founded in land grants • Primarily cash payment • Directed toward other levels of government, nonprofit organizations, universities, or individuals • Relation to Key Tool Features • Directness: “The principle indirect tool” • Automaticity: High level due to reliance on other entities • Coerciveness: Generally non-coercive • Visibility: Fairly visible

  3. Defining the Tools:Grants • Design Features and Major Variants • Scope of Purpose: Categorical Grants, Block Grants, and General Purpose Assistance • Method of Allocation: Formula (continuous, prescribed by law) & Project Grants (fixed period, specific project or service) • Degree of Federal or Donor Control: Application process and financial audits • Other Design Features: Recipient variation and “pass through grants”

  4. Patterns of Grants Use • Current Extent • Most widely used policy tool of American Federal Government • 928 funded grant programs amoung the 1,412 federal assistance programs in 1999 • Nonfederal Grants • Numerous grants from states to their localities • Grants and “pass through grants” generated from state receipts • In 1996, 30% of the $248 billion in state aid was pass-through federal funding • International Experience • Comparably the US relies more heavily on Categorical Grants • There has been an international shift to Block and General Grants

  5. Patterns of Grant Use • Recent Trends in the United States • Grant Growth: Significant growth since mid-nineteenth century with bursts in the 1930’s, 1956, 1960’s and 1990’s • More Payments to Individuals: Nearly all growth has been in the form of individual payments such as Medicaid, welfare aid, and housing assistance • The Erosion Flexible Funding: While the number of block grants has increased the proportion of federal aid has not • Growing Mandates: Crosscutting requirements and crossover sanctions • Research Grant Trends: On the rise since WWII and it is an important component of external funding streams for institutional research and development

  6. Basic Mechanics of Grant In Aid • Authorization • Administering organization • Description of supported activities • Eligibility • Distribution of funds • Allocation: Application, Selection, and Awarding • Regulations • Marketing • Application • Application Review • Award Process • Post Award Management and Assessment • Program implementation • Monitoring and evaluation

  7. Tool Selection: Theory and Practice • Rationale for the Use of Grants • Constitutional Considerations: Grants judged by federal government as appropriate tool for handling domestic functions • Administrative Rationales: Justified on basis of administrative efficiency • Economic Theory: The federal government possesses the strongest and “fairest” revenue source • Political Considerations • Effective way to bring states into federal programs • Addresses specific concerns of interest groups on federal level • Centralization of American Government

  8. Tool Selection: Theory and Practice • Systemic Concerns: Reducing Duplication and Confusion • Grant Consolidation: Categorical grants to block grants • Grant Simplification: Simplify and Standardize administrative procedures • Trade-off Proposals: 100% cost shift between state and federal level • Inefficient Allocation of Funds • Adherence to the “Robin Hood” tax system • Individual Program Concerns • Delays in Spending Funds: Money is not always spent • Improper Expenditure Funds: Money not spent where intended • Failure to Achieve Objective: Desired results are not always met

  9. Overall Assessment • Legitimacy:High in political legitimacy • Effectiveness:Moderate- some programs are very effective while others are hard to gauge • Efficiency:Grants are poor in efficiencydue to the difficulty in tracking funds • Equity:The wide distribution rather than need based distribution leads to poor equity ratings • Accountability:There are many complexities leading to a poor rating

  10. Future Directions • More of the Same:Expect that grants in the United States will continue to grow • Recurring Cycles of Growth and Reform:With expected growth there needs to be significant reform in terms of implementation, efficiency, and evaluation • Shift from Grants to Other Tools:There will be other domestic policy tools which will compete for dominance with grants

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