Local Governments' Management of American Rescue Plan Act Funds

• In Event: Bureaucrats in Local Government

Abstract

The American Rescue Plan Act (ARPA) of 2021 marked a substantial federal effort offering local governments flexible grants to address the COVID-19 crisis. Despite ARPA's importance, research on local-level implementation remains limited. This study examines the fund management challenges faced by 725 local officials overseeing ARPA allocations. Using logistic regression, we analyze how federal constraints, local capacity, and political influence affect difficulties managing funds and project implementation effectiveness. We hypothesize federal constraints (discretion and communication quality), local capacity (administrative and fiscal), and political involvement significantly impact local ARPA outcomes. We measure fund difficulties via federal compliance and internal administration and gauge effectiveness by timely, budget-conscious project completion. Results demonstrate federal restrictions increase local managers’ difficulties administering ARPA funds. Limited administrative capacity also hinders implementation, while political leaders positively influence outcomes. Tight regulations and inadequate staffing obstruct local efforts, supporting more flexible block grant requirements and increased local support. Our study enhances understanding of ARPA’s local impact, scrutinizes federal guidelines’ effects on grant management, and provides policy recommendations for improved local administration of federal funds.

Authors

• Laiyang Ke, Georgia State University

• Benedict S. Jimenez, Georgia State University

• Minji Hong, Georgia State University

• Eun Joo Kwon, Georgia State University