Abstract
Federal aid programs subsidize local governments in sectors ranging from health care to transportation, but there is little empirical study of their effects on local provision. We examine the effects of the 1937 Pittman-Robertson Wildlife Restoration Act, which directed federal excise taxes on guns and hunting equipment to wildlife agencies on the condition that receiving states stop diverting license funds to purposes unrelated to wildlife conservation. Using panel data from 1925 to 1937, we find that states with larger administrative sectors were more apt to divert wildlife revenues, and these diversions correlate with fewer licenses sold, suggesting adverse effects of diversions on wildlife conservation. Data from 1938–2018 suggest the Pittman-Robertson Act increased license sales and revenue, leading to positive effects on long-run conservation.
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