I don't follow your first point, would you mind breaking it down?  Governments are scared of a lot of things, but swelling their own ranks by creating more civil service jobs usually isn't one of them, is it?<p>There is definitely some serious game theory afoot; states have a perverse incentive to not spend on important things, lest they not receive federal money to cover those things.  It is similar to the perverse incentive in large companies and government to spend one's entire budget at all costs, lest you get allocated less next time.