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THE POLITICAL ECONOMY OF NEW DEAL FISCAL FEDERALISM
Author(s) -
WALLIS JOHN JOSEPH
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb00843.x
Subject(s) - discretion , economics , federalism , state (computer science) , matching (statistics) , fiscal federalism , government (linguistics) , control (management) , politics , power (physics) , executive branch , public economics , public administration , political science , market economy , law , decentralization , management , physics , computer science , linguistics , statistics , philosophy , mathematics , algorithm , quantum mechanics
While the introduction of federal matching grants to finance the New Deal relief programs is usually viewed as a mechanism to insure federal control over state relief spending, a careful study of the New Deal reveals that the reverse was the case: matching grants allowed the states to escape close federal control. The standard economic model of inter‐governmental grants reveals that the federal government will, if allowed, prefer to use discretionary rather than matching grants. With discretion, however, came power; power that neither the states nor Congress wished to see concentrated in the Executive branch.