In a recent issue of Public Finance Quarterly, Hardy (1976) presented results of a study of the effect of conditional and unconditional grants on various categories of expenditures of the provinces of Ontario and New Brunswick. It is the purpose of this comment to point out several shortcomings of this paper with respect to the formulation of the provincial decision maker's utility function and his constraints with respect to conditional grants.
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References
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AuldD.A.L. (1976) “Provincial grants and local government expenditure.”Public Finance Q. 4 (July): 295–306.
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BowmanJ. H. (1974) “Tax exportability, intergovernmental aid, and school finance reform.”National Tax J. 27, 2: 163–173.
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GramlichE. M. (1968) “Alternative federal policies for stimulating state and local expenditures: A comparison of their effects.”National Tax J. 21, 2: 119–129.
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HardyH. M. (1976) “Budgetary responses of individual governmental units to federal grants.”Public Finance Q. 4 (April): 173–186.
