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Title:Intergovernmental grants and bureaucratic power PDF Logo
Authors:Dahlberg, Matz
Lundqvist, Heléne
Mörk, Eva
Issue Date:2008
Series/Report no.:CESifo working paper 2430
Abstract:In their role as agenda setters and implementers of political decisions, bureaucrats potentially have the power to influence decisions in their own favor. It is however difficult to empirically test whether bureaucrats actually are involved in such actions. In this paper we suggest and apply a new way of testing the hypothesis that bureaucrats can and do in fact affect policy to their own benefit. Making use of a discontinuity in the Swedish grant system, we estimate causal effects of intergovernmental grants on different types of personnel employed by the local governments. On the margin, we find a large, positive effect of grants on the number of bureaucrats in the central administration, but no effects on the number of personnel in other important sectors run by the local government (child care, schools and elderly care). These results support the view that bureaucrats are able to, and do indeed, affect the allocation of grants within municipalities to support own goals.
Subjects:Fiscal federalism
grants
bureaucrats
rent seeking
discontinuity analysis
JEL:C33
H11
H70
H83
J45
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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