Empirical literature on the effects of intergovernmental grants on educational spending is reviewed in this document, which examines 40 published works covering the last two decades. Intergovernmental grants include both state grants to local governments and federal grants to state and local governments. The review's first section summarizes general observations on the studies, noting that the studies use either time-series or cross-sectional analysis, that their statistical techniques and models of governments' fiscal behavior became more sophisticated over time, and that intergovernmental grants are positively related to educational expenditures. In the second section the authors review 26 studies on state grants' effects on educational spending by states and local governments in general, by cities and municipal areas, and by school districts. The following section examines studies on federal aid, including six papers on pre-1966 data and seven on post-1966 data. Six studies are also reviewed on the effects of federal revenue-sharing and unrestricted lump-sum grants on state and local educational spending. Among the findings mentioned in the closing synthesis section are that the magnitude of intergovernmental grants' impact is uncertain and that the impact varies for different types of local governments. (Author/RW)