The University of Florence (Italy) offers some scholarships every year to eligible freshmen: eligibility is based on merit and economic needs. The number of grants awarded is usually constrained by a fixed budget: not all students applying for a grant receive one. Applicants are ranked on the basis of an economic indicator, that depends in a deterministic way on family income, property and pers...

This paper investigates the effectiveness of matching grants to correct for interjurisdictional spillovers in the light of Bernheim general neutrality result. Indeed this result suggests that the usual argument that matching grants are needed to internalize the externality arising from the existence of interjuridictional spillovers is an artifact of the assumption that jurisdictions neglect the...