Federal aid programs subsidize local governments in sectors ranging from health care to transportation, but there is lit-tle empirical study of their effects on local provision. We examine the effects of the 1937 Pittman-Robertson Wildlife Restoration Act, which directed federal excise taxes on guns and hunting equipment to wildlife agencies on the condition that receiving states stop di-verting license funds to purposes unrelated to wildlife conservation. Using panel data from 1925 to 1937, we find that states with larger administrative sectors were more apt to di-vert wildlife revenues, and these diversions correlate with fewer licenses sold, suggest-ing adverse effects of diversions on wildlife conservation. Data from 1938???2018 suggest the Pittman-Robertson Act increased license sales and revenue, leading to positive effects on long -run conservation. (JEL Q28, H71)
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