Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy

The theory behind aid to the states is that federal policymakers can design and operate programs in the national interest to efficiently solve local problems. In practice, most federal politicians are not inclined to pursue broad, national goals; they are consumed by the competitive scramble to secure subsidies for their states. At the same time, federal aid stimulates overspending by the states, requires large bureaucracies to administer, and comes with a web of complex regulations that limit state flexibility. At all levels of the aid system, the focus is on spending and regulations, not on delivering quality services.

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