What is "block grant"

n. a grant of federal money to state and local governments to support social welfare programs; "block grants reduce federal responsibility for social welfare"

In a fiscal federal form of government, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent, in contrast to a categorical grant, which has stricter and specific provisions on the way it is to be spent.

An advantage of block grants is that they allow regional governments to experiment with different ways of spending money with the same goal in mind. Disadvantages are that it is very difficult to compare the results of such spending and reach a conclusion and that regional governments might be able to use the money as if they collected it through their own taxation systems to spend it, without any restrictions from above. Also, the formula can be manipulated for partisan advantage, and favoritism occurs more easily than with categorical grants.