Intergovernmental grants offer positive financial inducements to get states to work toward selected national goals. On the other hand, unfunded mandates impose federal requirements on state and local authorities. Mandates are typically backed by the threat of penalties for non-compliance and provide little to no compensation for the costs of implementation.
The national government has used grants to influence state actions as far back as the Articles of Confederation when it provided states with land grants. In the first half of the s, land grants were the primary means by which the federal government supported the states. Millions of acres of federal land were donated to support road, railroad, bridge, and canal construction projects, all of which were instrumental in piecing together a national transportation system to facilitate migration, interstate commerce, postal mail service, and movement of military people and equipment.
Numerous universities and colleges across the country, such as Oklahoma State University and President Biden's alma mater, the University of Delaware, are land-grant institutions because their campuses were built on land donated by the federal government or by using funding secured by the sale of donated federal land. This video about the creation of Iowa State University shows how land grant universities were developed to bring higher education to the people.
Federal cash grants do come with strings attached; the national government has an interest in seeing that public monies are used for policy activities that advance national objectives.
These grants also often require some commitment of matching funds. Medicaid and the food stamp program are examples of categorical grants. Block grants come with less stringent federal administrative conditions and provide recipients more flexibility over how to spend grant funds.
