ROAD GRANTS, INTERGOVERNMENTAL COMPETITION AND THE BENEFITS OF DUPLICATION

Abstract

Abstract: This article argues that direct commonwealth involvement in road funding and road policy has benefited the states and local government. Although inefficiencies and friction are evident as a result of joint funding, the benefits of multiple accountability outweigh the costs. A competitive dynamic underlies the involvement of all three levels of government, producing outcomes that no single government dominates, but which reflect in part the responses of each to their respective constituencies. The commonwealth has been driven to more intrusive forms of intervention as existing controls failed to achieve the commonwealth's objectives, and to expanding its financial contributions to counter the diversion of funds by state governments. Its commitment to funding the road program is likely to be highest when its specific purpose grants can be identified closely with the provision of roads in particular regions and localities. In sum, joint funding of the road program produces a system that is responsive to competing conceptions and interests, and the commonwealth's “voluntary vacancy” from all but “national” roads is on balance likely to be detrimental to the program.