ministry of finance sweden specific and general grants in sweden what has occurred after the grant...

Ministry of Finance Sweden

Specific and general grants in Sweden

what has occurred after the grant reform in the 1990’s?


Questions for my paper

• Has a shift has taken place with respect to the use of general and specific purpose grants allocated to local governments in Sweden?

• Specifically:• Have the specific purpose grants increased? • How has the balance (policy-mix) between

general and specific purpose grants evolved over time?


Grant reform of 1990’s

• Emphasis on general grants • Though specific grants still in place

• 1993 municipalities • 1996 county councils


Specific grants before 1993

• Equalise service levels and• Secure an element of basic security

and fairness to citizens, irrespective of their place of living.

• Specific grants expanded the scope and the size of the public sector = intented impact.


Arguments for a general grant system

• Economic efficiency.• Better equalisation of costs and income.• Enhance local democracy, accountability,

flexibility and innovation. • 18 specific grants were abolished and

used to finance the general grants.

• Financial crisis played into the decision.


Grants in the early 1990’s

0

10

20

30

40

50

60

70

80

90

100

1990 1991 1992 1993

General grants (VAT compensation excluded)

Specific purpose grants

Sum of general & conditional grants


Criteria for specific grants that should remain

• Payments for services undertaken on behalf of the state,

• for investment and development, • existed due to labour market

considerations, • for public housing, • were paid on equal terms to local

governments and other organisations and

• for renewal and development projects.


Specific purpose grants 1990-1993

0

10

20

30

40

50

60

70

80

1990 1991 1992 1993

Municipalities

County councils


Specific grants have increased

0

20

40

60

80

100

120

140

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008


Specific and general grants 2003-2008

0

20

40

60

80

100

120

140

2003 2004 2005 2006 2007 2008

General grants

Specific grants

Sum of grants


Specific purpose grants 2003-2008

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008

Municipalities County councils


Grants as proportion of local government income

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2003 2004 2005 2006 2007 2008

General grants

Specific purpose grants

Sum of grants


Conclusions

• The grant reform of the 1990’s had impact on the policy mix between conditional and general grants.

• Speficic purpose grants fell from 17 % of local governments income in 1992 to 7 % in 1993.


• The number of conditional grants grew between 1993 and 2001.

• But declined slightly thereafter.• Especially grants intented for a

particular group of municipalities and county councils.

• Could be harmful to equalisation and economic efficiency.


The last five years

• Grants from the central government accounted for 15 % of local government income in 2008.

• Specific purpose grants have grown in size, and to a certain extent in numbers, but their significance as a source of finance has in fact declined of lated.

• Specific purpose grants represent app. 7-8 % of local governments income (2003-2008).

• General grants slightly bigger.


The composition of the specific grants has changed

• In the last five years, specific purpose grants have grown more important for county councils

• Specific grants have declined in significance for the municipalities compared to the early 1990’s

ministry of finance sweden specific and general grants in sweden what has occurred after the grant...

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