Spend More, Get More? An Inquiry into English Local Government Performance

34 Pages Posted: 17 Jul 2008

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 2008

Abstract

Based on a unique measure of performance of English local governments in the provision of public services (Comprehensive Performance Assessment, CPA), this paper develops a simple analytical framework that fully encompasses the institutional features of the British system of local government finance in order to model the process of performance determination, and uses panel data (2002-2007) to identify the determinants of local government performance. Due to the nature of CPA ratings - measured on a five category (poor to excellent) scale - the empirical work relies on an ordered response approach allowing for cross-sectional heterogeneity. Maximum likelihood estimation of a random effects ordered probit model provides no evidence in support of the "spend more, get more" hypothesis, but rather suggests that spending in excess of centrally set standards has a detrimental effect on local public service performance.

Keywords: local public expenditures, performance rating, random effects

JEL Classification: C23, C25, H72

Suggested Citation

Revelli, Federico, Spend More, Get More? An Inquiry into English Local Government Performance (April 1, 2008). U. of Torino Department of Economics Research Paper No. 4/2008-GE. Available at SSRN: https://ssrn.com/abstract=1152140 or http://dx.doi.org/10.2139/ssrn.1152140

Federico Revelli (Contact Author)

University of Turin ( email )

Via Po 53
Facolta di Scienze Politiche
10124 Torino
Italy

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