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Article Review: Fiscal Federalism
Angela Rivers
Helms School of Government, Liberty University
PBLCY 804
Mr. Mock
May 7, 2023
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Collins, B. K., & Gerber, B. J. (2006). Redistributive policy and devolution: Is state
administration a roadblock (grant) to equitable access to federal funds? Journal of
Public Administration Research and Theory, 16(4), 613-632.
Collins and Gerber propose an explanatory framework to address the query, which links
intergovernmental grant acquiring transaction costs to the availability of federal block grant
funding. The research question addressed in the article is: “Whether the block grant approach
produces more effective redistributive policy management -on equity or efficiency grounds”
(Collins & Gerber, 2006, 613-615). The authors argue that these transaction costs have a
detrimental impact on both equity and efficiency objectives. The authors utilize a case study
approach to test their explanatory framework, focusing specifically on the "Community
Development Block Grant (CDBG) program's non-entitlement section." They gather and analyze
grant data across various institutional contexts to evaluate the influence of state-level
institutional decisions and the administrative capability of cities and counties on grant access,
use, and distributive results.
The evidence and data presented in the article include describing and examining various
institutional settings and granting data across those settings. The study by the authors revealed
that the availability of federal block grants is contingent upon local administrative capacity, with
certain localities being less proficient in securing them. The authors conclude that the
institutional arrangements at the state level can exert a considerable influence on the accessibility
of block grants. This is because the diverse arrangements can either enhance the fairness of
access or lead to the concentration of resources in specific regions. Additionally, it was
discovered that the expenses incurred during the grant contracting process could result in
increased administrative costs and decreased utilization of grants. Their findings suggest that the
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pursuit of equity and efficiency goals through the block grant approach is not guaranteed and will
depend on the institutional choices of state governments. The article is overall well written, with
a clear focus and a well-structured argument. The authors comprehensively analyze their topic,
supported by relevant evidence and data. The research question posed by the authors is clearly
stated, and their findings are well-supported.
Pagano, M. A., & Johnston, J. M. (2000). Life at the bottom of the fiscal food chain:
Examining city and county revenue decisions. Publius, 30(1), 159-170
The authors look at the county's and city's revenue decisions regarding general finances
to assess the consequences of such a shift on the financial constraints put on citizens. The
research question addressed in the editorial is: “The impact of shifting responsibilities from the
state or federal governments to local governments, namely cities, and counties (Pagano &
Johnston, 2000, 161-162).” The authors use a descriptive approach to answer their research
question, relying on empirical data from city and county government budgets and from state laws
regarding the extent of local revenue authority. Ultimately, the authors explore how cities and
counties manage the financial burden caused by this shift and how the varying causes of
financial stress impact the decisions made by local governments. The evidence and data
presented in the article include the budget data from city and county governments, both with and
without intergovernmental aid, and the state laws regarding the extent of local revenue authority.
Also, the evidence includes a comparison of budget practices between counties and cities. The
data and evidence presented in this article provide an insightful look into the current and future
implications of transferring financial responsibility from the local governments to the federal and
state governments.
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The study conducted by the authors revealed that the decision to impose financial
responsibilities on residents is greatly influenced by the degree of governmental control over
local tax authorities. Furthermore, giving cities and counties intergovernmental help does not
always lessen the responsibilities. The researchers additionally discovered that urban and
regional administrative divisions possess comparatively robust financial reserves. However,
transferring obligations from the state to the local level may engender arduous fiscal
circumstances for numerous urban and regional administrative divisions. The written piece
exhibits a commendable level of proficiency, with a distinct emphasis and a logically organized
thesis. The authors have thoroughly examined their subject matter, strengthened by relevant
evidence and statistics. The authors' research inquiry is unambiguously articulated, and their
conclusions are authenticated with strong evidence.
Synthesis
The two articles reviewed agree that federal fiscal measures affect state and local
governments. Collins and Gerber utilize a case study approach to examine the effect of
institutional choices made at the state level on access to federal block grants. Similarly, Pagano
and Johnston take a descriptive approach to shifting obligations from the state to native
governments. Both authors conclude that federal fiscal measures have a negative impact on state
and local governments. These results imply that local governments have limited access to federal
funds and that their residents bear the financial consequences of their decisions. Besides, Collins
and Gerber explore the impact of transaction costs on grant access, utilization, and distributive
outcomes. They argue that vulnerable communities may be unable to access federal block
endowments due to the overhead of negotiating grants between countries. Furthermore, they
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suggest that making institutional choices at the state level can reduce transaction costs and
improve the accessibility of block grants.
Meanwhile, Pagano and Johnston assess the impact of local revenue authority on the
daily budgets of citizens. Through their research, they uncover how state regulations, subsidies,
and grants to local municipalities all play a role in the financial burden imposed on those who
live in the area. They discover the importance of state regulation over local taxation and how
state grants are not always enough to offset the financial obligations of local citizens. They
examine how cities and counties approach the challenge of managing the financial burden
associated with shifting requirements to the local level. The findings of Pagano and Johnston
demonstrate the significance of understanding local revenue authority and its impact on citizens'
daily budgets. The information they provide can be used to identify how states, counties, and
cities can manage their financial obligations more effectively. This can include methods to
reduce the cost of taxation to the people of a given area and how to use state grants to benefit
citizens in need. Pagano and Johnston's research also demonstrates the potential flaws in the
current system of local revenue authority. They illustrate how, in some cases, residents are hit
with heavier financial burdens and receive little to no assistance from state governments. This
knowledge can be used to inform policy changes that can help reduce the burden of taxation on
local citizens in the future.
Both articles’ authors acknowledge that there may be unintended consequences when
federal fiscal policies are applied to state and local governments. As such, it is important to
consider the effects of federal policies on state and local governments when formulating new
policies. This is especially true since directing obligations from the central government to local
governments can place cities and counties in challenging economic situations and create
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financial burdens for their residents (Collins & Gerber, 2006, 621-623). Moreover, localities may
be unable to access federal block grants (Pagano & Johnston, 2000, 163-164).
The two articles take different approaches and cover different ground, yet they come to a
similar conclusion. Pagano and Johnston emphasize that the government's control of local
revenue authority significantly affects the decisions of cities and counties, while Collins and
Gerber focus on people's ability to receive block grants and how institutional choices at the state
level can lessen the burden of transactions. Despite their differences, both writers acknowledge
that local and state authorities may suffer due to federal budgetary measures, but they disagree
on how much this impact can be addressed by institutional decisions made at the state level. This
difference appears to be the only point of disagreement between the two articles. In general, both
agree that local government autonomy is limited by state and federal budget measures and that
local and state authorities must cooperate to produce positive outcomes.
In sum, federal fiscal measures have a negative impact on state and local governments.
Vulnerable communities may be unable to access federal block endowments due to the overhead
of negotiating grants between countries (Collins & Gerber, 2006, 626). Furthermore, decisions to
impose financial burdens on residents are heavily impacted by state regulation of local taxation
and state grants to municipalities (Pagano & Johnston, 2000, 165-167).
Moreover, directing obligations from the central government to native governments can place
cities and counties in challenging economic situations and create financial burdens for their
residents. Besides, institutional decisions at the state level can reduce transaction costs and
improve the accessibility of block grants. It is important to consider the effects of federal policies
on state and local governments when formulating new policies to ensure the best outcomes
possible.
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References
Collins, B. K., & Gerber, B. J. (2006). Redistributive policy and devolution: Is state
administration a roadblock (grant) to equitable access to federal funds? Journal of Public
Administration Research and Theory, 16(4), 613-632.
Pagano, M. A., & Johnston, J. M. (2000). Life at the bottom of the fiscal food chain: Examining
city and county revenue decisions. Publius, 30(1), 159-170.
Sharma, T. (2020). Federalism: Opportunities and Challenges in Context of Nepal and its
Relevancy to Democracy. Gsj, 8(5).
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