Public Finance, 4th Edition

Chapter 28: The Role of Grants-in-Aid in a Federalist System of Governments

1. Optimal Federalism and Grants-in-Aid: Normative Analysis 
   1. First-Best Policy Environment 
   2. Second-Best Policy Environment 
      1. Imperfect Correspondence 
2. Alternative Design Criteria 
   1. The LeGrand Guidelines 
   2. Applying LeGrand’s Principles: Bradbury et al. 
      1. The EU Cohesion Policy Grants 
   3. Redistributing Through Matching Grants 
3. Estimating the Demand for State and Local Public Services 
   1. The Median Voter Model 
   2. The Political Assumptions 
   3. The Economic Assumptions 
      1. As-if Maximization 
      2. Allowing for Congestion 
      3. Expenditures per Person 
      4. Other Determinants of G 
      5. The Supply Price q 
   4. Whose Equation? 
   5. Further Conceptual Difficulties  ...