State influence on conditional grant programs in the United States

In the United States, major policy programs at the state level in areas such as education and healthcare are co-funded by the federal government. Conditional grants therefore represent a significant share of subnational revenues and are often hotly debated. In exchange for federal money, states must implement the objectives set by the federal government, which may undermine their autonomy. At the same time, grants can be considered free money if state and federal preferences are identical. To shed light on the degree to which conditional grants actually interfere with or in turn enhance state policymaking, we examine the degree to which states influence the conditions attached to federal grants as well as the amount of funding granted. Analytically, we sample ten states and two policy programs (Medicaid and, Title I) to trace federal-state negotiations and intergovernmental lobbying over a period of 60 years. Our findings shed light on an often overlooked aspect of multilevel dynamics: the capacity of subnational actors to influence national rules to boost or defend their own authority.