This paper demonstrates how changes in untied, lump-sum government grants or income from unrestricted endowments will affect the behavior of charities operated by managers with s trong philosophical or professional commitments. An increase in such funds will reduce the charity's accountability to private donors and lower its fund-raising activities. The grant will not be spent entire ly on raising the quantity of output. Instead, it will permit the cha rity manager to reduce his or her dependence on the costly solicitati on of donors who do not completely share the manager's preferences.

This paper builds upon some well-known facts about state government to generate new conclusions about social choice on the national level of a federal republic. Citizens vote against national laws that restrict their state's ability to export costs but support laws that reduce the costs imposed on them. Individuals may seek to extend the laws passed in some states to the entire nation or may oppose preemptive laws because they benefit from variety. Since these motivations are absent in a unitary system, national support for a law will depend upon whether a unitary or a federal structure prevails.

This paper builds upon some well-known facts about state government to generate new conclusions about social choice on the national level of a federal republic. Citizens vote against national laws that restrict their state's ability to export costs but support laws that reduce the costs imposed on them. Individuals may seek to extend the laws passed in some states to the entire nation or may oppose preemptive laws because they benefit from variety. Since these motivations are absent in a unitary system, national support for a law will depend upon whether a unitary or a federal structure prevails.