Variations in the Use of Grant Discretion: The Case of ISTEA

The Intermodal Surf ace Transportation Efficiency Act gave stategovernments increased flexibility in spending federal transportationgrant funds. However, most of the flexibility was not used;there are many other potential sources of inflexibility in transportationpolicymaking. States were more likely to use flexibility ifthey were politically liberal, had larger populations and, otherthings being equal, had less metropolitan populations. Statesthat were previously more involved in nontraditional transportationprograms were also somewhat more likely to use flexibility.