Australian federalism and the use of tied grants: case studies of public hospitals and schools

Abstract

Tied grants are a contentious feature of Australian federalism. This study evaluates the policy making dynamics and performance of tied grants using case study evidence on public hospital and school grants from 1975 to 2008. The study finds that policy control has wavered between the Commonwealth and States. Further, the study argues that provided the Commonwealth acts as a strategic and refined player, the tied grant and co-operative federalism can offer distinct performance advantages.