Final answer:
Categorical grants are federal transfers with strict administrative criteria that limit recipients' discretion. They are used for specific purposes and provide federal control over fund usage. In comparison, block grants offer more flexibility to states.
Step-by-step explanation:
Categorical grants are federal transfers formulated to limit recipients' discretion in the use of funds and subject them to strict administrative criteria. These grants are provided for specific purposes and come with stricter regulations and requirements when compared to block grants. For example, Medicaid and the food stamp program are examples of categorical grants that are used to provide healthcare and food assistance to low-income individuals.
Categorical grants are considered a good tool for federal control because they allow the national government to have more influence over how the funds are used. By imposing strict administrative criteria, the federal government can ensure that the funds are used for policy activities that align with national objectives. These grants also often require recipients to provide matching funds, which helps states contribute to the projects financially.
Block grants, on the other hand, provide states with more flexibility in how they spend the grant funds. Unlike categorical grants, block grants are not limited to specific purposes and have fewer restrictions on their use. States may prefer block grants because they have more autonomy in deciding where to allocate the funds.