Revenue sharing has become an accepted feature of the American fiscal scene. However, it is not at all clear that decisions concerning the allocation of revenue sharing funds among competing uses are notably different than they would have been under a system that imposed greater constraints on states and localities in the spending of the funds. This article seeks to examine one set of experiences that may throw some light on how a relaxation of federal constraints may alter the pattern of public expenditures. An opportunity to make some judgments on this issue arises because under the Appalachian program there has been a steady reduction of the limits Congress has imposed on the allocation of appropriated funds. The Appalachian experience may, therefore, provide some illumination on a key fiscal question from a particular institutional setting. As constraints have been relaxed, have the states involved altered the relative allocation of funds among competing uses? As in so many other areas of social inquiry, in no sense does the Appalachian experience provide a case study in which all other variables are held constant. Other aspects of the Appalachian program have been changing also and there is far more than a fiscal aspect to the program. To the extent possible, the fiscal aspects will be isolated and highlighted, but the overall program is composed of interrelated elements, each of which has impacts on the others. At various times before and after the passage of the Appalachian Regional Development Act of 1965,1 the programs it initiated were described as an "experiment." In the listing below of the features of this experiment, the last one, its fiscal dimension, is of most importance for this paper.