Moderating Local Capacity: Exploring EO 12372's Intergovernmental Review Effects on Federal Grant Awards

Abstract

This article asks whether the Reagan Executive Order (EO) 12372 matters for intergovernmental fiscal relations today. To address this question, federal grant receipts from programs that are, and programs that are not, covered by EO 12372 are compared by examining the differential effects of political and local administrative capacity on each. Grant receipts are examined by coding federal grant award data from 1993 to 2003 using Catalog of Federal Domestic Assistance reference numbers. In the case state, Kentucky, Area Development Districts are the regional functionaries for the state single point of contact clearinghouse, by virtue of which status they review proposals for federal funding originating in, or affecting, their districts. Since federal award decisions take clearinghouse information into account on grant programs covered by EO 12372, differences in the effects of local capacity on receipt of grants covered and not covered by the EO are expected. Methodology used in this post‐only analysis is pooled cross‐sectional time series analysis with panel corrected standard errors. Results focus attention on the differential effects of government administrative and political capacity as they apply to federal grants covered, and not covered, by the EO.