The Determinants and Efficiency of Local Authority Spending in England

Journal Issue

Volume/Issue:: 1991/9
Series:: IMF Working Papers
Author(s):: James Gordon, and Tamim Bayoumi
Publisher:: INTERNATIONAL MONETARY FUND
Published Date:: January 1991
DOI:: http://dx.doi.org/10.5089/9781451927108.001
ISBN:: 9781451927108
ISSN:: 1018-5941
Page:: 34

This paper analyzes the efficiency and determinants of local authority expenditure in England during 1989/90. The capitalization of local spending in house prices is used as a test of efficiency, and it is found that local services are in general excessive from this standpoint. The determinants of local government spending are then estimated and local incomes, the tax price faced by the electorate, and local party control are found to be significant. Application of the analysis to the recently introduced local government reforms suggest small effects on the overall level of spending.

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The Determinants and Efficiency of Local Authority Spending in England