In this country allocations of funds from central government to lower tier organisations are usually estimated as a share of the national total which has been decided in advance. That is, we do not work out how much each local area needs & sum the results to arrive at a national total
I am not aware of any work that has ever been done to see if this procedure produces perverse & unintended results in some cases - though lots has been written & published on the similar problems of proportional voting systems
To take a greatly oversimplified example
There is one national manufacturer of skirts who operates from just one factory. The government decides, in pursuance of its regional development policy, that there should be one skirt factory in each region
Now each skirt is made out of a 3 yard length of cloth. For technical reasons a skirt can not be stitched together from smaller pieces of cloth
The cloth comes on a bale which is 100 yards long. Each of the 10 regions is given its allocation of 10 yards
At the end of the year the audit shows that national skirt production has declined by nearly 10%, from 33 to 30 units
A commission is set up to advise government on the best methods of training the workers to bring them up to the expected standard of productivity in skirt making
