Intergovernmental grants are transfers from one level of government to another, or between governments at the same level. They are important instruments for securing, controlling and influencing the delivery of public services and transfers in a multilayered government structure. Intergovernmental grants transfer huge sums between governments and thus have substantial distributional and re-distributional consequences in terms of service level, tax rates and equity. Whereas traditional approaches to the study of intergovernmental grants focus on efficiency gains and optimal design, this dissertation follows a more recent literature and investigates when and how political factors affect intergovernmental grant schemes.

The contribution of the dissertation is twofold. First, it suggests a framework for analyzing when political factors affect intergovernmental grants focusing on three stages: 1) the introduction, 2) the allocation, and 3) effects of grants. Second, the dissertation contributes to three specific literatures on how political factors affect intergovernmental grants: intergovernmental lobbying, strategic allocation of grants, and effects of grants (the flypaper effect). The dissertation points to important ways political factors affect intergovernmental grant schemes in general. Moreover, the empirical studies are conducted in Denmark, and the dissertation offers new insights about the Danish intergovernmental grant scheme, which are useful for policy makers at all governmental levels in this country.

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