An unfunded mandate is a statute or regulation that requires any entity to perform certain actions, with no money provided for fulfilling the requirements. This can be imposed on state or local government, as well as private individuals or organizations. The key distinction is that the statute or regulation is not accompanied by funding to fulfill the requirement.

An example in the United States, would be those federal mandates that induce "responsibility, action, procedure or anything else that is imposed by constitutional, administrative, executive, or judicial action" for state and local governments and/or the private sector.

As of 1992, 172 federal mandates obliged state or local governments to fund programs to some extent. Beginning with the Civil Rights Act of 1957 and the Civil Rights Act of 1964, as well as the Voting Rights Act of 1965, the United States federal government has designed laws that require state and local government spending to promote national goals. During the 1970s, the national government promoted education, mental health, and environmental programs by implementing grant projects at a state and local level; the grants were so common that the federal assistance for these programs made up over a quarter of state and local budgets. The rise in federal mandates led to more mandate regulation. During the Reagan Administration, Executive Order 12291 and the State and Local Cost Estimate Act of 1981 were passed, which implemented a careful examination of the true costs of federal unfunded mandates. More reform for federal mandates came in 1995 with the Unfunded Mandates Reform Act (UMRA), which promoted a Congressional focus on the costs imposed onto intergovernmental entities and the private sector because of federal mandates. Familiar examples of Federal Unfunded Mandates in the United States include the Americans with Disabilities Act and Medicaid.

An "intergovernmental mandate" generally refers to the responsibilities or activities that one level of government imposes on another by legislative, executive or judicial action. According to the Unfunded Mandates Reform Act of 1995 (UMRA), an intergovernmental mandate can take various forms:

A 1993 study conducted by Price Waterhouse, sponsored by the National Association of Counties, determined that in fiscal year 1993 counties in the US spent $4.8 billion for twelve unfunded federal mandates. Medicaid was one of these twelve unfunded mandates, and comprised the second largest item in state budgets, accounting for almost 13 percent of state general revenues in 1993.

Mandates can be applied either vertically or horizontally. Vertically applied mandates are directed by a level of government at a single department or program. Conversely, horizontally applied, or "crosscutting", mandates refer to mandates that affect various departments or programs. For example, a mandate requiring county health departments to provide outpatient mental health programs would be considered a vertically applied mandate, whereas a requirement that all offices in a given jurisdiction to become handicap-accessible would be considered a horizontally applied mandate.

Federal unfunded mandates can be traced back to the post-World War II years, when the federal government initiated national programs in education, mental health services, and environmental protection. The method for implementing these projects at the state and local level was to involve state and local governments. In the 1970s, the federal government utilized grants as a way to increase state and local participation, which resulted in federal assistance constituting over 25 percent of state and local budgets.

The first wave of major mandates occurred in the 1960s and 1970s, concerning civil rights, education, and the environment. The arrival of the Reagan administration ostensibly undermined various federal mandate efforts, as the executive branch promised to decrease federal regulatory efforts. For example, the passage of Executive Order 12291 required a cost-benefit analysis and an Office of Management and Budget clearance on proposed agency regulations, and the State and Local Cost Estimate Act of 1981 required the Congressional Budget Office to determine the state and local cost effects of proposed federal legislation moving through the Legislative Branch. However, the U.S. Advisory Commission on Intergovernmental Relations (ACIR) reported that, during the 1980s, more major intergovernmental regulatory programs were enacted than during the 1970s.