In the last two decades, federal judges in virtually all states have ordered state governments to alter dramatically the way they operate such institutions as prisons, hospitals, and mental health facilities. The research presented here seeks to improve our understanding of the budgetary linkage between the federal judiciary and state governments by examining the influence of court-ordered prison reform on state expenditures for corrections. Generally, the results indicate that the judiciary has had a limited but positive impact on capital outlays in one-half of the states examined. The influence on state operating expenditures for corrections has been even less noticeable. The analysis suggests that the judiciary's ability to exercise “the power of the purse” is tempered by the dynamics of state-level budgetary processes and the willingness of courts to adopt a comprehensive view of prison reform.The judiciary & has no influence over either the sword or the purse.—Alexander HamiltonA state is not at liberty to afford its citizens only those constitutional rights which fit comfortably within its budget.—U.S. District JudgeFrank M. Johnson, Jr.