The research tests the proposition that risk aversion is a basic goal of bureaucratic decisionmaking within the Urban Development Action Grant Program (UDAGP) and that this type of behavior influences the spatial distribution of UDAGP grants. The results demonstrate that risk aversion is evident and that it tends to divert funds away from those cities with high distress. Political accommodation is shown to be evident in cases where bureaucrats are faced with high-risk projects. This accommodation influences the spatial distribution of UDAGP funds.
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