Performance Funding in Federal Agencies: A Case Study of a Federal Job Training Program

Our case study highlights important details that enter into developing performance contingent budgeting schemes—details that do not emerge in more general discussions of the subject—and shows how the handling of these details can be crucial to these schemes' success. We study a federal job training program that gives state and local decision makers discretion over the program's operation, but through performance funding holds them accountable for achieving specific objectives. We find that states' modifications to the scheme's construction produced over time highly individualized performance funding schemes that likely varied in their effectiveness.     

Federal Goverment Credit Program: Privatization Through Loan Sales

Privatization by sale of governmental financial assets provides a means to achieve program goals but does not preclude continued policy involvement. By loan guarantees the government has already privatized some aspects of its credit programs. Issues raised by loan sales differ from those concerning capital assets.     

Federal Aid and Economic Development in Nonmetropolitan Communities: The UDAG Program

In 1977 Congress enacted the Urban Development Action Grant(UDAG) program to help distressed communities develop economically.This article draws from case studies of ten nonmetropolitancommunities with Action Grants. It focuses on the factors thataffect the completion and benefits of projects, particularlyrelations with private developers and local management capacity.The studies show that the UDAG program has been flexible inaccommodating differences in economic development needs as perceivedlocally. However, many of the projects have not produced thenumbers of jobs originally proposed. Several communities encounteredproblems with private developers who either abandoned the projectsor failed to produce expected results. Smaller communities inthe sample tended to lack grantsmanship, management, and legalresources.     

The Federal Photovoltaics Utilization Program: An evaluation and learning framework

The Federal Photovoltaics Utilization Program(FPUP) was established in 1978 with the belief that getting photovoltaic cells into the market was a “bootstrap problem” - one of eliminating market uncertainties through federal procurements to enable investments in improved production processes. A lack of clearly defined program objectives and expected results, however, was translated into continuing difficulties in implementation. Using the FPUP experience as an example, an alternative model of photovoltaic procurement is proposed which is simultaneously more structured (in that greater analytical control is used in selecting applications to fund) and more adaptive (in that continuous feedback is built in). A discussion of such a framework and sequential evaluation design is followed by some comments pertaining to the future of other commercialization efforts.     

State Corporate and Federal Securities Law: Dual Regulation in a Federal System

Corporate law in the United States involves dual regulation.Although state and federal corporate law typically functionwithout mutual interference, the last thirty years have revealedpotential conflicts, chiefly in two situations. One involvescivil remedies for investors under federal securities statutes;the other is state anti-takeover regulation and its relationshipto the federal Williams Act. The postwar years until 1975 sawperhaps too much reliance on the federal component of corporateregulation. Since 1975, there has been a renaissance of statelaw. Recently, however, appreciation for state regulatory authoritymay have degenerated into hostility to the will of Congress.The authors argue that the core interpretive task in federalsecurities law is preservation of both regimes to maximum effect,because the Congress has expressly declared that state authorityshould continue adjacent to federal regulation.     

Federal Intervention in the Municipal Bond Market: The Effectiveness of the Build America Bond Program and Its Implications on Federal and Subnational Budgeting

The American Recovery and Reinvestment Act of 2009 (ARRA) included several new federal programs intended ostensibly to “unfreeze” the credit markets as a result of the global financial crisis. One such program, the Build America Bond (BAB) program, aimed to lower the borrowing costs for state and local governments by increasing their access to capital and providing a more generous federal subsidy than the traditional indirect tax exemption subsidy. BABs are taxable bonds sold by subnational governments, which carry a 35 percent direct federal payment subsidy to the borrower. In creating this program, the federal government hoped that the large direct federal subsidy along with greater potential investor interest in taxable securities would result in lower borrowing costs for state and local governments vis‐à‐vis traditional tax‐exempt bonds. This research study examines the relative effectiveness of the BAB program and details the various quantitative and qualitative implications on federal and subnational budgeting by moving from an indirect to a direct federal subsidy approach in facilitating state and local government capital raising.     

Improper Selection of High-Cost Producers in the Rent-Seeking Contest

The resources two rival businesses spend to raise their own chanceof getting a unique monopoly license are a cost of rent-seeking.When those businesses differ in the costs of producing themonopoly good there is an additional cost of rent-seeking that hasnot been sufficiently studied in the literature. If the high cost producer winsthe license, the difference between his cost and the costs of hismore efficient rival is a social loss from improper selection ofproducers by the political process. The loss becomes more severewhen the ability to lobby of the inefficient producer outstripsthat of the efficient producer. This may help to explain whyspecialized lobbying evolved. Specialized lobbying reduces thesocial cost from improper selection of firms by allowing efficientproducers to hire expert rent-seekers and so to raise theirchances of gaining monopoly concessions.     

Reinventing Federalism: The Clinton/Gore Program for a New Partnership Among the Federal, State, Local, and Tribal Governments

This article presents the Clinton/Gore administration's philosophyon federalism and details specific improvements for servicesto citizens through strengthened intergovernmental partnershipsamong the federal, state, tribal, and local governments. Thearticle defines accomplishments toward achieving the NationalPerformance Review recommendations for new intergovernmentalpartnerships in delivering services to the public, and it providesa direction for federalism in the 104th Congress and beyond.     

Sticky Dollars: Inertia in the Evolution of Federal Allocations for HIV Care through the Ryan White HIV/AIDS Program

While substantial research examines the dynamics prompting policy adoption, few studies have assessed whether enacted policies are modified to meet distributional equity concerns. Past research suggests that important forces limit such adaptation, termed here "policy inertia." We examine whether block grant allocations to states from the Ryan White HIV/AIDS Program have evolved in response to major technological and political changes. We assess the impact of initial allocations on later funding patterns, compared to five counterfactual distributional equity standards. Initial allocations strongly predict future allocations; in comparison, the standards are weak predictors, suggesting the importance of policy inertia. Our methodology of employing multiple measures of equity as a counterfactual to policy inertia can be used to evaluate the adaptability of federalist programs in other domains.     

Health-Care Workers and HIV: Policy Choice in a Federal System

In 1991, the Centers for Disease Control (CDC) announced thata health-care worker (HCW) had apparently transmitted the virusthat causes the Acquired Immune Deficiency Syndrome (AIDS) topatients while providing them routine medical treatment. Thisarticle examines the policy choices made based on this case.It begins by reviewing the federal system for making these policies.The conflicting public and professional policy recommendationsare then summarized. Next, a framework for policy choice ina federal system is outlined and federal and state choices aredescribed. The final section suggests some implications of thesechoices for American federalism.     

Biennial Budgeting in the Federal Government

This article examines the possible outcomes of changing from the current annual budget review to biennial budgeting. It looks at the experience of various states and its application to the federal level. It explores all of the supposed benefits , including less time spent on budgeting issues, more accurate budget projections, reduction of congressional workload and increased congressional oversight and, for the president's point of view, increased power of the executive branch. Concluding on a cautious note, the article offers some plausible applications of biennial budgeting to the national budget.     

Offsetting Collections in the Federal Budget

Offsetting collections are one of the largest and least understood types of transactions in the federal budget. This article discusses a number of the most common questions that arise with regard to offsetting collections.     

McCloskey versus McIntyre: Implications of Contested Elections in a Federal Democracy

The 1984 election in the Eighth Congressional District of Indianaproduced an unclear result. Election night totals gave the victoryto the Democratic incumbent Francis McCloskey. Subsequent recountsby state and local officials gave the victory to RepublicanRichard McIntyre. A further recount by the U.S. House of Representativesreturned the victory to McCloskey by a four-vote margin. Partisanshipwas important in all phases of deciding the outcome of the election,in part, because unclear rules and inconsistent counting procedurescreated ample opportunities for partisan interpretations ofelectoral rules. This contested election raised questions aboutthe legitimacy of the outcomes produced by various countingrules and about the problems of assuring majority rule wherecounting rules are inconsistent. The election also raised questionsabout the propriety of U.S. House intervention into local electoraladministration and about the roles of local, state, and federalofficials in deciding the outcome of a federal contested election.