Reducing Local Capacity Bias in Government Grantsmanship

Abstract

Local governments with more fiscal and administrative resources are at an advantage for obtaining numerous intergovernmental grants. Although many studies have examined the impact of this local capacity bias on grant getting, there has been minimal research on how grant programs could reduce it. We evaluate the effectiveness of two actions that federal and state grant programs have taken to decrease local capacity bias for economically disadvantaged communities, providing matching fund waivers and preferential scoring. By analyzing grant application, evaluation, and award data for California’s Integrated Regional Water Management Program, we find that matching fund waivers were used by many disadvantaged communities in the grant program. However, awarding extra points to projects that would benefit disadvantaged communities appeared to have no impact on funding decisions due to the extra points being small in number and widely distributed. We discuss how the provisions’ design affects their efficacy and how generalizable the findings are to other grant programs. Overall, our study provides support for having grant programs include matching fund waivers and carefully designed scoring preferences to help reduce local capacity bias in grantsmanship.