Federalism, the State, and the City: Explaining "City Welfare" in the United States and the European Union

This article extends United States-European Union (EU) comparative research to the area of grants-in-aid by comparing the evolution of federally funded "city welfare'' in the two political systems in light of an original institutionalist theory. I show that while the United States and the EU adopted similar early programs-Model Cities and URBAN-these schemes' instability and their different politico-constitutional setting led to divergence shortly after their inception. In the United States, where the Department of Housing and Urban Development safeguarded city welfare, Model Cities was replaced with the durable Community Development Block Grant. In the EU, where no such institutional anchor existed, URBAN's demise ended urban policy altogether. The article contributes to the broader scholarship on federalism by highlighting the relevance of institutions and time for understanding grants-in-aid.