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Specific and general grants in Sweden

This paper examines the impact of the grant reform of the 1990s in Sweden, focusing on the shifts in the use and significance of specific and general grants allocated to local governments. It explores whether the allocation of specific purpose grants has increased, how the balance between general and specific purpose grants has evolved over time, and the implications for economic efficiency and local governance. The analysis draws upon trends from 1992 to 2008, highlighting changes in financing, policy mix, and the ongoing importance of specific grants.

alan-frederick
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Specific and general grants in Sweden

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  1. Specific and general grants in Sweden what has occurred after the grant reform in the 1990’s?

  2. Questions for my paper • Has a shift has taken place with respect to the use of general and specific purpose grants allocated to local governments in Sweden? • Specifically: • Have the specific purpose grants increased? • How has the balance (policy-mix) between general and specific purpose grants evolved over time?

  3. Grant reform of 1990’s • Emphasis on general grants • Though specific grants still in place • 1993 municipalities • 1996 county councils

  4. Specific grants before 1993 • Equalise service levels and • Secure an element of basic security and fairness to citizens, irrespective of their place of living. • Specific grants expanded the scope and the size of the public sector = intented impact.

  5. Arguments for a general grant system • Economic efficiency. • Better equalisation of costs and income. • Enhance local democracy, accountability, flexibility and innovation. • 18 specific grants were abolished and used to finance the general grants. • Financial crisis played into the decision.

  6. Grants in the early 1990’s

  7. Criteria for specific grants that should remain • Payments for services undertaken on behalf of the state, • for investment and development, • existed due to labour market considerations, • for public housing, • were paid on equal terms to local governments and other organisations and • for renewal and development projects.

  8. Specific purpose grants 1990-1993

  9. Specific grants have increased

  10. Specific and general grants 2003-2008

  11. Specific purpose grants 2003-2008

  12. Grants as proportion of local government income

  13. Conclusions • The grant reform of the 1990’s had impact on the policy mix between conditional and general grants. • Speficic purpose grants fell from 17 % of local governments income in 1992 to 7 % in 1993.

  14. The number of conditional grants grew between 1993 and 2001. • But declined slightly thereafter. • Especially grants intented for a particular group of municipalities and county councils. • Could be harmful to equalisation and economic efficiency.

  15. The last five years • Grants from the central government accounted for 15 % of local government income in 2008. • Specific purpose grants have grown in size, and to a certain extent in numbers, but their significance as a source of finance has in fact declined of lated. • Specific purpose grants represent app. 7-8 % of local governments income (2003-2008). • General grants slightly bigger.

  16. The composition of the specific grants has changed • In the last five years, specific purpose grants have grown more important for county councils • Specific grants have declined in significance for the municipalities compared to the early 1990’s

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