In line with the principle of local self-governance, Swedish municipalities have a high degree of discretion to manage the goals and execution of public management. However, in recent years, the national influence over local governments has increased, especially the use of targeted government grants. This shows a pattern of ambiguity as the state strive for national equality but the principle of local self-governance allows for local variation in the public welfare. Thus, this study is intended to provide insight into how Swedish municipalities under different conditions perceive and interpret the influence of the national government through economic instruments. In order to explore how the local governments perceive their degree of discretion to manage state grants, this study compares the implementation in four different municipalities of a targeted government grant denominated the “Elderly Care Boost”. By conducting interviews, this study shows that economic incentives make municipalities more susceptible to the national government’s investments and goals, but only if the municipalities view the grant as something supporting their own work. Furthermore, this study shows a paradox or dilemma as the municipalities view the clear instructions for the grant as favourable while, at the same time, these clear instructions also restrict the local government’s discretion. In addition, the study indicates that the municipalities use “framing” and thus attempt to reinterpret the governing of the national parliament as they deem favourable.