Journal of Official Statistics, Vol.18, No.3, 2002. pp. 353–369

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The Legislative Process and the Use of Indicators in Formula Allocations

Formula grant programs transfer funds to state and local governments based on statistical „indicators. These series are often created to monitor and report on conditions. At times, new indicators may be crafted to meet a legislative need, but statistical rather than accounting standards guide their construction. Using statistical indicators to distribute funds alters the requirements of relevance, accuracy, consistency and timeliness in ways that are not obvious from the perspective of standard statistical practice.

This article charts the relationship between the legislative process and use of statistical indicators in formulas in the United States. Although program goals may be broadly stated, legislators fashion specific provisions to aggregate support for passage. Enacting formulas is a difficult and complicated part of the legislative process and it frequently relies on precedent-using formula provisions that worked in the past. In the battle for resources, federal, state and local government agencies and private organizations advocate consideration of particular interests. Policy analysts and statisticians must provide indicators and formulas that generate support for enactment and funding while maintaining professional integrity.

Grants-in-aid; statistical indicators; legislation; appropriations; authorization; indicators; programs; goals; statistical policy; standards.

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