Do Presidents Favor Co-Partisan Mayors in the Allocation of Federal Grants?

With the increasing nationalization of politics, federal politicians have interacted more and more with subnational actors. In particular, the president and governing party have provided selective policy and spending beneﬁts to same-party jurisdictions in order to increase their inﬂuence in subnational politics. As a signiﬁcant amount of federal grants is allocated directly to city governments, we analyze the e ↵ ects of the federal-city relationship in the federal grant process. Speciﬁcally, we examine the e ↵ ects of the president-mayor party alignment on the allocation of federal block and project grants to 568 medium and large cities from 2005 to 2020 using a two-way (city-year) ﬁxed-e ↵ ects model. We ﬁnd that the president favors co-partisan mayors in the distribution of federal grants, especially co-partisan mayors from secure party cities and cities in states where the governor is also a co-partisan. Digging deeper, we ﬁnd this form of presidential particularism is exclusively a Democratic pursuit.

American federalism dates back to the creation of the U.S. Constitution in 1787, which broadly divided the roles and authorities of federal and state governments.Since then, scholars have routinely debated the optimal level of power-sharing in the multi-layer governing structure.As a result, the federal and state dynamics of the public policy process have been the focal point in federalism studies (Bednar, Eskridge, and Ferejohn 2001, Rodden 2002, Conlan 2006).
The power and authority of U.S. cities are not defined in the Constitution, however.
Since the Supreme Court ruling in Hunter v. City of Pittsburgh (1907), the legal status of cities has been regarded as the corporation of states (Clark et al. 1985).This has shaped the development of the scholarly literature, as previous studies have examined either a city's relationship with state government or (more recently) local political dynamics.Thus, the relationship between the federal government and local governments in the public policy process remains a puzzle.
With the increasing nationalization of politics and strong party influence in state and local policy processes, federal politicians have interacted more and more with subnational political actors, and the executive relationship, in particular, has become more critical.McCann (2016), for example, finds that the federal government delegates a substantial portion of its policy implementation to state and local governments, which results in governors and mayors exerting significant influence in federal policy implementation.Local politicians also increasingly interact with the public and stakeholders as front-line politicians in various policy areas (Einstein and Glick 2018).The president thus needs strong support from mayors to achieve his political and policy goals in an increasingly polarized environment.
Local politicians also need help from the federal government for their success in political careers and policy implementation.As federal issues have become more important to local elections, party cues and endorsements from federal politicians have become critical to local politicians (Hopkins 2018).Many local policies require support from the federal government, and local governments have relied heavily on fiscal transfers from federal or state governments (Nunn, Parsons, and Shambaugh 2019).Importantly, many federal-local policy processes also do not involve state government; consequently, the political distance between federal and local governments has narrowed in our polarized society.
While previous research on distributive politics and federalism has focused almost exclusively on the federal-state relationship, this study analyzes the e↵ects of the federal-local relationship in the allocation of federal grants.1As a significant amount of federal grants is distributed directly to cities, bypassing the state government's redistribution process, we examine the e↵ects of the president-mayor party alignment on the allocation of federal block and project grants to 568 medium and large cities from 2005 to 2020.
The paper is organized as follows.Section 1 presents an overview of direct federal grant allocation to cities between FY2006 and FY2021.Section 2 introduces the various datasets, and Section 3 describes the analytic models and presents the results of our analysis, showing the e↵ect of party alignment on presidential particularism in federal grant allocation.Section 4 concludes by discussing our findings and o↵ering recommendations for future research.

Federal Grant Allocation to Cities
Although most distributive politics research focuses on the dynamics between the president and Congress (Berry, Burden, andHowell 2010, Kriner andReeves 2015), some studies have examined the interplay between federal and state governments.Larcinese, Rizzo, and Testa (2006) and Nicholson-Crotty (2015), for example, find that governors of the president's party receive more federal funds.However, no research has explored the direct relationship between federal and local governments in the public policy process.In FY2021, for example, $6 billion of block or project grants was directly distributed to cities.2 Figure 1a shows the the allocation of direct federal grants to cities over a longer period, from FY2006 to FY2021.Although the yearly grant amount did not significantly increase during this period, the spending by the federal government more than doubled during two economic crises (the 2009 Great Recession and the COVID-19 pandemic).
The O ce of Management and Budget (OMB) reviews each agency's grant allocation proposals and makes an apportionment plan to decide the funding level and timing.In this sense, the grant allocation process is controlled by the president's ex-post influence (Berry, Burden, and Howell 2010).The federal government distributes grants directly to cities each year in the areas of transportation, housing, education, and community development.As shown in Figure 1b, the Department of Transportation (DOT) allocated over $18 billion directly to cities between FY2005 and FY2021, while the Department of Housing and Urban Development (HUD) and Department of Homeland Security (DHS) distributed $9 billion and $8.5 billion, respectively, directly to cities during the same period.More detailed information is provided in Table B.1 in the Appendix.Formula grants are disbursed strictly based on eligibility criteria, whereas block and project grants allow discretion to the awarding agencies in deciding the recipient jurisdictions and allocation amount (Dilger and Cecire 2015).Therefore, we use 702 federal block and project grants that are allocated directly to city governments (i.e., those that do not pass through state governments).
To investigate the e↵ects of the president-mayor relationship on federal grant allocation, we incorporate two di↵erent datasets.First, for federal grant data, we use the Federal Assistance Awards Data System (FAADS), which has been the typical standard (Berry, Burden, andHowell 2010, Kriner andReeves 2015).The FAADS data, collected and managed by the Department of Treasury and Census Bureau, provides extensive information on federal funds allocation at the award-level, such as types and purpose of federal funds, allocation timing and amount, awarding agency, and recipient's name and address.California has the most (90), followed by Texas (48) and Florida (41).
For our dependent variable -Per Cap (con$) -we use per-capita level grant allocation, based on 2012 real dollar value, to the cities.Since there are many cities that do not receive any federal grants each year, taking the logged amount of grant allocation raises concerns about zero-inflated bias in the analysis.
We include three key independent variables to analyze the e↵ects of three types of president-mayor party alignments: Mayor Pres Party: Takes a value of 1 if the partisanship between the president and mayor is the same, and 0 otherwise.
Secure Mayor Pres Party: Takes a value of 1 if the partisanship between the president and mayor is the same and the top two candidates in a mayoral election are from the same party, and 0 otherwise.
Mayor Pres Gover Party: Takes a value of 1 if the partisanship among the president, governor, and mayor is the same, and 0 otherwise.
Finally, we also include three city-specific socioeconomic variables as controls, following Kriner and Reeves (2015): the logged value of total population, the logged value of income per capita, and the poverty rate.4 3 Methods and Results We use two-way (city-year) fixed e↵ects with clustered standard errors by city to determine the e↵ect of the three types of president-mayor party alignments on the federal grant process for the period between 2005 and 2020.Two-way fixed-e↵ects controls for city-specific timeinvariant features.We thus identify initially based on change in the partisanship of the president and/or change in the partisanship of a city's mayor.
We employ three analytic models.First, we examine the e↵ect of the president-mayor party alignment on the president's particularistic grant allocation to cities (Pres Mayor Party).
Second, we analyze the party alignment e↵ect in one-party election cities (Secure Pres Mayor Party), where the elected mayor and runner-up are from the same party (which we define as secure party cities).Finally, we consider how presidential particularism changes when the president, governor, and mayor are of the same party (Pres Gov Mayor Party).
We first break down the e↵ect of the president-mayor party alignment on the federal grant distribution in Table 1 and Table 2.For detailed information, refer to the complete tables in Appendix, specifically Table B.4 and Table B.5.
Table 1 shows the e↵ect of president-mayor party alignment on grant distributions to 568 cities between FY2006 and FY2021.Although the simple e↵ect of party alignment washes out in Model (1), we find a positive and statistically significant e↵ect in Models (2) and (3).The president allocates $2.962 per capita more to co-partisan mayors in secure party cities and $3.732 per capita more to co-partisan mayors in states with co-partisan governors.
How big are these e↵ects?As Table 8 in the Appendix indicates, the mean distribution was $15.98 per capita with a standard deviation of $51.88 per capita.So these significant e↵ects would represent a 5.7% and 7.2% of a standard deviation increase, respectively.Identification here comes exclusively from the changing partisanship of a city's mayor.We see that Democratic presidents are more particularistic in terms of grant allocation -with Republican presidents nominally negative across all president-mayor categories -and these e↵ects are statistically significant in terms of co-partisan mayors in secure party cities (Model 2) and co-partisan mayors in states with co-partisan governors (Model 3).Democratic presidents allocate $6.005 per capita more to secure co-partisan cities and $7.939 per capita more to cities with co-partisan mayors and co-partisan governors.These amounts represent a 11.6% and 15.3% of a standard deviation increase, respectively.These results provide a definitive answer to the question motivating this paper: presidents do favor co-partisan mayors in the allocation of federal grants.Particularism takes the form of significantly more per-capita grant money in the cases of co-partisan mayors in secure party cities and co-partisan mayors in states with co-partisan governors.And these significant results appear to be driven exclusively by Democratic presidents.As our timeframe spans 2005-2020, this is in fact an "Obama e↵ect."

Conclusion
Recent research in American politics finds that the president strategically uses federal funds as one of several powerful governing resources, along with appointments and the veto, to pursue his policy and political goals.As the leader of his party, the president provides selective spending benefits to his co-partisan members in Congress.We find that the partisan alignment in grant allocation goes beyond the federal level.Specifically, we find evidence of presidential particularism in the distribution of federal grant funds to co-partisan mayors, which is driven by Democratic presidents.Future work should extend our timeframe and add more (Democratic) presidencies to explore the robustness of this result, as well as explore the partisan motivations of presidents in distributing grants (along with funding alternatives like loans and contracts).
Our findings also suggest that scholars should continue to emphasize the e↵ect of local political economy using advanced local datasets.For example, Brollo and Nannicini (2012) analyze federal grant allocation with respect to the timing of local elections in Brazil, but there have been been no similar research in the U.S. context.Collecting the dates of local elections would solve this problem.Other research might analyze the grant distribution to counties, special districts, NGOs, and private institutions; this is possible now, as the FAADS dataset provides broad information on the receiving jurisdictions.Finally, studies of federalism should better highlight the close relationship between the federal and local governments.Mayors are deeply connected to the federal government in broad policy areas, and they have attempted to exert a stronger influence in the policy process by organizing cooperative governments, such as Councils of Governments (COGs) and Metropolitan Planning Organizations (MPOs).These relatively new local institutions are ripe areas for study.Note: Federal agencies award more than 40% of block and project grants in the last quarter of each fiscal year, and their spending is concentrated in the last month of the fiscal year.This is because agencies take months to review grant applications from subnational governments, and they want to spend all the remaining money to claim the next year's budget increase. 6B Appendix: Tables Table B.

Figure
Figure A.3: Grant: Transportation Transportation, Per CapitaSource FAADS (USAspending) https://www.usaspending.govNote: Cities with a large population or a higher population density have received relatively larger amounts of transportation grants.

Figure A. 4 :
Figure A.4: Block and Project Grant to Cities (FY2006-2021), by month

Figure A. 5 :
Figure A.5: Block and Project Grant to Cities (FY2006-2021), by Agency Warshaw, de Benedictis-Kessner, and Velez's (2022)year.While other local datasets include cities with population thresholds over 75,000, 100,000, and 125,000, the Warshaw, de Benedictis-Kessner, and Velez's (2022) dataset provides broader information on the 568 medium and large cities with populations greater than 50,000 over a longer time period.Detailed information on theWarshaw, de Benedictis-Kessner, and Velez's (2022)local dataset is provided in TableB.1 and TableB.2 in the Appendix.Of the 568 medium and large cities in our analysis, 63 (11%) do not have the mayor's party information for the entire 16 years (2005 to 2020), and 19 do not have the mayor's Warshaw, de Benedictis-Kessner, and Velez (2022)mbled byWarshaw, de Benedictis-Kessner, and Velez (2022), which provides extensive information on local politics and elections for municipalities with populations over 50,000. I includes key variables like the partisanship of the mayor and other candidates, party information over 10 years.Therefore, 484 observations (5.3%) are missing from the full panel of 9,104 mayor-year observations.Democratic mayors are 51.8% of the sample and Republican mayors are 37%, while 11% of mayors' partisanship is unknown.With respect to the mayor's party alignment, 44.3% of mayors are from the president's party, while 17% of mayor-year observations are classified as secure (i.e., mayor and election runner-up are from the same party).Also, 44% of governors are Democrats and 56% are Republicans during this time, and 24.8% of city-year observations are classified as the same party alignment among the president, governors, and mayors.With respect to cities by state in the dataset,

Table 2
goes a step further by breaking out the president by party, which allows us to compare e↵ects across Republican and Democratic presidents during our time period. 5

Table 2
1: Direct Block and Project Grants to Cities, By Agency