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This paper examines the determinants of state assistance to 70 major central cities in 1982. State assistance is broadly defined to include both intergovernmental grants and institutional assistance, such as granting a city access to a tax with export potential or state takeover of city service responsibilities. Two key hypotheses are derived: states direct assistance to cities that need help the most, and states regard grants and institutional assistance as substitutes. Both hypotheses are strongly supported by the data. A third hypothesis, that high federal aid to a city is offset by low state assistance, receives no support.
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Ýinger et al. (1989) studied this question.
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