The study focuses on the phenomenon of hundreds of billions of Euros of unspent social special-purpose funds in both India and the EU (and, we suspect, globally). By “social special-purpose”, we mean funds that have been collected by law for a specific social purpose that would otherwise be the domain of discretionary state policy. These funds are held in some vehicle that reflects this social purpose (such as a trust or a fund) rather than simply being absorbed into ordinary administrative budget lines. By “unspent”, we refer to instances where a significant proportion of these funds remains both uncaptured by other interests (e.g. embezzled), and unspent during a discrete timeframe (e.g. the fiscal year) and for the purpose for which they are earmarked. In India, vast amounts of unspent funds exist in everything from welfare funds for construction workers and cooperatives for saltpan workers, to legal aid funds. A brief review of the literature on Europe reveals the widespread nature of unspent funds in EU structural funds as well. Interestingly, there is little systematic study of unspent funds, and even less comparative work on this intriguing phenomenon. We propose an initial study to map the extent and nature of this phenomenon and develop methodologies to study it. We propose to study unspent funds in India and Italy, and explore their institutional and regulatory preconditions along with their socio-political effects. This runs counter to conventional wisdom, which understands the state as a vehicle of resource distribution, and thus unspent funds as a symptom of temporary institutional blockage in the state. We explore specific case studies in two countries that have promising analytical potential in terms of similarities and differences in the modes and mechanisms of governance and institutional structures that underlie vast amounts of unspent funds.