Article Review: Fiscal Federalism Assignment for Module 6: Week 6
Michael C. Bland
Dr. William Bowen
Liberty University
PLCY 804-Summer 2022
June 19, 2022
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ANNOTATIONS
Collins, Brian K., and Brian J. Gerber. 2006. “Redistributive Policy and Devolution: Is State
Administration a Road Block (Grant) to Equitable Access to Federal Funds?” Journal of Public
Administration Research and Theory 16, no. 4: 613-632.
In their 2006 work, Collins and Gerber investigate redistributive policy as well as
devolution, focusing primarily on block grants as well as their administrative ability [1]. The
author's research led to the development of three distinct hypotheses concerning competition and
the many different features that could be related with it. In order to conduct an analysis on it,
data pertaining to non-entitlement CDBG was obtained from three states between 1999 and
2000. The examination of the hypothesis appeared to be a strength in checking into a variety of
some data relating to the research topic, resulting in more trustworthy findings.
The article discusses challenges that are inherent to the Community Development Block
Grant program (CDBG), which may make it difficult to qualify for one of these grants [2].
According to the authors it may be difficult to administer second-level grants, which are
provided to local governments in order to put into action a federal block grant [3]. These
difficulties are in part caused by the fact thatbecause?? the problems are being implemented by
the local governments in accordance with the procedural constraints that have been set by the
federal government. Even if local governments have incentives that are in line with the
redistributive intent of a block grant, this does not guarantee that they will be able to implement
and adhere to the federal procedures that are specified for the block grant. Even if local
governments have incentives that are aligned with the redistributive intent of a block grant [4].
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The authors suggest that local governments that have better administrative competence
have a greater chance of implementing initiatives with fewer serious hiccups. The significance of
administrative capability is inextricably linked to transaction costs, which have the potential to
restrict access to CDBG financing. According to the findings of their research, the administrative
capacity of a local government was directly correlated to the amount of non-entitlement CDBGs
that the local government had access to in areas of grant competition. Because of the high
transaction costs involved, the local governments which don't have the administrative capability
are intrinsically lacking the capacity to compete for federal grant funds. In a nutshell,
institutional arrangements made at the state level have the ability to bring about greater equity in
program administration without sacrificing the tangible opportunities connected with competitive
grant procurement.
Pagano, Michael A. and Jocelyn M. Johnston. 2000. “Life at the Bottom of the Fiscal Food Chain:
Examining City and County Revenue Decisions.” Publius 30, no. 1: 159-170
According to Johnston and Pagano, the revenue implications of devolution are examined
in the article. Federal devolution is forcing states to take a new look at the separation of tax and
service obligations between state government and county, municipal, and other local
governments, according to the National Conference of State Legislatures [5]. Between 1992 and
1997, researchers examined data on cities and counties. Study topics included eliminating unpaid
bills and reducing tax obligations. According to the author's study, general-purpose governments
appear to be taking on more and more responsibility [6]. The majority of these tasks were linked
to the ability to increase revenue. Cities as well as counties were supposed to generate more
funds through other means, such as raising taxes and other fees that may be collected in order to
do so.
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In order to cover the costs of implementing new services in the cities or municipalities
where they resided, residents were forced to accept additional tax burdens. There were two ways
to look at the influence on municipal tax income. City and county administrations can expect
lower revenue burdens if they add more new services, according to the study's findings. Cities
that have excess funds from the previous fiscal year will be able to use these monies in the next
fiscal year's budget. If intergovernmental aid grows or decreases, it is realistic to predict a shift in
end-of-year balances [7]. In times of financial need, intergovernmental assistance can be an
important source of money for counties. It is possible that the state will impose revenue
restrictions on cities and counties that have accessibility to revenue diversity, as described by
Pagano and Johnston (2000).
SYNTHESIS
Smaller cities, say the authors, were more adversely affected by federal budget cuts because they
lacked the administrative capacity to compete for revenue funding. Increasing the capacity of
states to levy their own taxes has been shown to be necessary, and this might considerably
benefit tax loads [8]. Access to money by a particular population has a direct impact on federal
programs' redistributive nature, therefore knowing how states manage appropriate grant contract
agreements is critical [9].
These two pieces of research looked at how a federal government distributes state funds
for redistributive programs with an eye toward their specific implementation and devolution. By
functioning as the federal government's contracting agents, both states' governments [10] are able
to maintain existing and future financing prospects because of a specific framework. States,
according to many studies, have considerable incentives to ignore federal block grants' intended
redistributive effects [11]. In order to ensure that federal goals and procedural criteria
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necessitating timely funding are met, the federal government supervises state implementation.
According to Collins and Gerber [12], primary agents (federal and state) may not fulfill the
measurable goals set out in the program for which funding is meant. As a follow-up to Pagano
and Johnston's “Life in the Bottom Food Chain,” they focus on the state and local governments'
responses to federal money and their outcomes; their analysis and findings come from 23 states
and counties. Each team of authors provides a different study. Pagano and Johnston, on the other
hand, gathered data from 23 states as well as counties for their thesis, while Collins and Gerber
gathered data from four states. A major part of Collin and Gerber's core argument is based on
"block grants," as well as the pre- and post-CDGB processes.
As stated in both articles, the federal government has ultimate authority over the ability
of state and local governments to collect taxes from their citizens. There is a correlation between
the federal budgetary aspects of each piece and this analysis allowed a reader to see that. As a
result of Collins and Gerber's investigation, government financing and implementation of the
program and its necessary federal safeguards are taken more seriously. Rather than focusing on a
city or county's ability to compete for federal funds and program implementation based on its
administrative size, Pagano and Johnston's article emphasized the devolution of revenue. Their
study is focused on ending balance, not administrative capacities, as a measure of fulfilling
service commitments, as previously said.
Both a devolution of power and a slowdown in economic activity are likely to result in
the recurrence of long-standing problems [13]. According to Pagano and Johnston, in the event
that there is a recession, the intergovernmental funding that exists between states, cities, and
counties will make it impossible for these jurisdictions to provide or expand the services they
offer to their residents [14]. Collins and Gerber (2000) established a connection between the
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rising costs of redistributive programs and the rising costs of the management of the programs.
As a consequence of this, scholars have demonstrated that in order for state and local
governments to qualify for federal funding, they must first undertake administrative investments.
On the other hand, this may be difficult to accomplish given that additional financial resources
do not allow for administrative expansion.
Both articles looked at the federal government's fiscal spending measures (as well as
program mandates) that the states must follow in order to receive funding via redistributive
programs and devolution. Administration and revenue burdens were the focus of Pagano and
Johnston research [15]. Collins and Gerber's conclusions are less comprehensive, but their
findings provide a clearer grasp of the measurable effectiveness and challenges of federal
redistributive financing and devolution. A program's success will be determined by its ability to
manage itself. Anything beyond that is meaningless without the necessary staff in place to carry
out and offer service in accordance with federal mandates in a local government's ability to
handle CDBG funds obtained for a program. When it comes to accessing federal funds and the
ability to levy taxes for fiscal health, there are hurdles for municipalities and counties. Given the
span of their administration capacities as well as severe financial obligations that can be reduced
due to inadequate revenue streams, smaller cities and counties may be unable to participate in
grant funding programs. These problems were the focus of each article. Pagano and Johnston
conducted study to better understand federal financing and taxation in relation to redistributive
policies and state-level control of federal spending [16].
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Bibliography
Collins, Brian K., and Brian J. Gerber. 2006. “Redistributive Policy and Devolution: Is State
Administration a Road Block (Grant) to Equitable Access to Federal Funds?” Journal of Public
Administration Research and Theory 16, no. 4: 613-632. (1,2,3,4,9,10,11,12)
Pagano, Michael A. and Jocelyn M. Johnston. 2000. “Life at the Bottom of the Fiscal Food Chain:
Examining City and County Revenue Decisions.” Publius 30, no. 1: 159-170
(5,6,7,8,13,14,15,16)
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