The distribution of Federal grants-in-aid: the increasing importance of PACS relative to state and local political parties

This paper examines the role of political influence in the distribution of federal grants-in-aid to state and local governments. Grants are assumed to be traded for the political capital of state and local politicians and interest groups. As the value of the political capital each group has to offer varies, the payoff, in the form of grants, should likewise vary. For the ten-year period 1974-83, a period of declining relative importance for state and local political parties and of rising relative importance of PACs, it is hypothesized that the return to state and local political party capital would be declining while the return to the political capital of PACs would be constant or increasing. The empirical evidence presented offers support for this hypothesis.