Local Government Finance: Assessing the Central Governmant's Contribution

It is widely believed that between 60 to 66 per cent. of local authority expenditure (or income) is met by grants from central government alone. This popularly held view is challenged in this paper through a consideration of the current system of funding. We begin with the rate support grant procedure and identify some common sources of misunderstanding; these concern the definition of the rate support grant itself and the true nature of relevant expenditure. This leads us to examine the question of local authority miscellaneous income from fees, sales, rents and other sources from which we conclude that its contribution is underestimated. However it is general knowledge that besides miscellaneous income local authorities derive their income from two other principal sources namely, government grants and local rates. Accordingly the remainder of the paper examines in turn the contribution of these three sources towards (i) local authority revenue expenditure in respect of rate fund services, (ii) local authority revenue income and (iii) local authority income including both revenue and capital receipts. In no instance does central government's share approach 60 per cent. Thus, it would appear that the contribution of government is being overestimated while that of miscellaneous income underestimated. The implications of this are discussed.     

THE GOVERNANCE OF FINANCIAL REGULATORY REFORM: THE AUSTRALIAN EXPERIENCE

The dominant perspective in the literature linking governance, globalization and public policy argues that globalization undercuts state capacity, weakening a government's ability to effectively regulate its domestic affairs. This paper shows otherwise with special reference to the Australian experience in financial regulation. It challenges the conventional wisdom that the Australian state is weak and cannot adopt anticipatory industrial policies. This paper argues that the adoption of the ‘twin peaks' model of financial regulatory arrangements is an example of the existence of government‐led steering in Australia which can adopt a proactive approach to financial regulation by steering and coordinating policy networks. ‘Governance through hierarchy’ in the financial services industry may be a function of the government's political entrepreneurship; its skill in setting and implementing an agenda; and an ability to create new policy communities and networks.     

Service Domains – The New Communities: A Case Study of Peterlee Sure Start,UK

In this paper, a Sure Start programme is used to explain an emergent ‘Service Domain’ model, built around innovative and creative service integration and complementary multi-professional partnerships for pre-school children and their families in disadvantaged communities. Sure Start, the cornerstone of the government's ambitious policy to eradicate child poverty in the UK by 2020, and a major departure from traditional single agency service delivery, emulates the Head Start initiative in the USA where funding came directly from federal government and by-passed state legislatures. The Sure Start funding mechanism had a pre-requisite to establish multi-agency partnerships with equal parent representation, as a result of central government's frustration with the failure of mainstream agencies to unite strategically and operationally to deliver integrated services. The Sure Start initiative represented a nationally coordinated attempt by central government to address previously disjointed approaches to children's services integration.     

Integrated resorts and hotel (gambling) service enterprises in Singapore,Macau and Australia: the changing policy landscape

In 2006, Singapore passed legislation allowing the establishment of integrated resorts (IRs) with extensive gaming facilities on the island nation. The Singaporean government was motivated to open two massive IRs in 2010 by the twin objectives of achieving a dramatic elevation in the position of the services industry within their national economy, and to increase state income through lucrative gaming taxes. The Singapore government's decision to take this developmental step was directly influenced by the expansion of Macau into the largest global gambling entity in the world, now dwarfing Las Vegas across all key indicators including revenue and visitor numbers. Macau's position at the pinnacle of Asian gambling, attracting the massive Chinese market, is now beyond dispute. Combined, both Macau and Singapore have altered the IRs services landscape of Asia and Australasia. The economic success of the two Asian gambling giants has seen notable policy responses from national and regional governments. In Australia these policy responses have led to decisions to build new IRs and massively redevelop existing facilities up to a new standard of service aimed at competing with the new facilities operating in Singapore and Macau.     

Towards pluralism and partnership in management development in local government

'Joined-up government' has been a policy thrust characterising much of the first term of the Labour government. The last four years have seen a flourish of area-based and local partnership initiatives. Information and IT are seen as crucial to facilitate joined-up government and improved service delivery at both central and local level. Ambitious targets are thus set to make all dealings with government deliverable electronically by 2005. This article examines data sharing in a local partnership, using as an example the preparation of the Children's Service Plan 2000-2003 in the city of Sheffield, setting out the national policy background, with particular reference to children's services plans; introducing the project; discussing the results obtained in the data collection exercise, and concluding that the organisational and cultural change necessary to share information effectively require time, and above all a period of relative stability to mature and take hold.     

Australia's Handling of Tensions between Islam and the West under the Howard Government

This article examines the impact of international conflicts involving the Muslim world upon Australia's multicultural society by studying the Howard government's responses to tensions between Islam and the West since September 11. Specifically, it surveys the Howard government's participation in the ‘War on Terror’, other aspects of Australia's foreign and security policies, including the relationship with the United States, the emergence of immigration and refugee flows as national security issues, and the subsequent impact of all this on multiculturalism and in particular on Australia's Muslim community. At a broader level, the article challenges the argument that foreign policy is inconsequential for social policy, intercommunal, inter-ethnic and inter-religious relations. The internalization of the ‘War on Terror’ has reinforced a negative portrayal of Islam and Muslims in Australia by blurring the dividing line between ‘Islam’ on the one hand and ‘extremism’ and ‘terrorism’ on the other. The evidence suggests that government statements and policies, more generally had provoked apprehension amongst a wide cross-section of the Australian Muslim community. A major finding of this article is that unless care is taken, it is not inconceivable that the hitherto harmonious relationship between Muslims and other sections of Australia's community could be unnecessarily endangered.     

Chronic poverty and entitlement theory

This paper examines chronic poverty in the developing country context within the entitlement theory approach. The dialogue on entitlement theory originally introduced by Sen is extended here to explore poverty and its persistence, or chronic poverty. A conceptual framework is presented, in which poverty and its persistence are explained within the context of the individual's economic and non-economic situation and development incentives. These attributes are influenced by the individual's entitlements. It is shown that poor endowments and resource base are important causes of persistent poverty. Policies aimed at reducing poverty therefore must address problems associated with improving the entitlements of individuals and households. The definition of ‘entitlements’ in the paper is not restricted to material possessions—the economic entitlements of the individual or the household—but is extended to incorporate the individual's skills, education and productive ability—the non-economic entitlements. The discussion is rooted in the increasing awareness of multidimensional poverty. The paper focuses on rural poverty in certain parts of India, where most of India's chronic poverty is situated. Over a million people can be classified as chronically poor in terms of duration, severity and deprivation. This is despite the government's commitment to the eradication of poverty since the early 1950s, with a total expenditure of nearly $7 billion in the past 50 years.     

Central-Local Relations in an Era of Multi-Level Governance: The Case of Public Participation Policy in England, 1997-2001

The election of a 'New Labour' UK government in 1997 promised a new era of central-local relations facilitated by a programme of local government reform which recognised local government's 'community leadership' role. Other aspects of the agenda supported the development of multi-level governance, for example, the establishment of sub-national institutions such as the Scottish Parliament and the promotion of neighbourhoods as key sites for action. Despite these actions this paper will argue that in England the central state retains considerable influence over the key agents of local governance. Using the example of public participation policy, and drawing on the findings of a recent study in two English cities, the paper will explore how national policy aspirations were reflected locally. It concludes that while local action generally complemented national priorities, there were important points of contrast, and that localities' capacity to act in their own interests is supported by the opportunities presented in a multi-level governance environment.     

Forming community councils East Kilbride

The principle of directly elected mayors forms a key part of the Labour government's strategy to modernise local democracy and strengthen accountability. First applied to London, the government has sought to extend the institution, allowing local referendums to determine whether the public favours the principle or not. This article examines the state of public opinion regarding elected mayors before reporting on the outcome of referendums held since the 2001 general election. We then consider the results of mayoral elections, specifically addressing issues of electoral participation, legitimation and partisan support. In conclusion, we consider whether its experience with both referendums and mayoral elections may have affected the government's enthusiasm for further expansion of this institution across the local government system.     

Health and Local Government Partnerships: The Local Government Policy Context

This article explores partnerships between health and local government from the local government perspective; placing developments between the two sectors within the wider context of the Local Government Modernisation agenda. A number of commentators have argued that developments since 1997 – in particular the emphasis on community leadership and the new power of well-being – have provided local authorities with an exciting opportunity to reclaim a more pivotal role in shaping the health agenda at the local level. Such a role would be based on promoting well-being and a good quality of life, in keeping with the social model of health. In the longer run this reclaimed role could produce a shift in what has become the main boundary between health and local government: the health–social care boundary. The article reviews developments in three key areas: the health–social care boundary; the core components of the Local Government Modernisation Agenda; and the relationship between regeneration and health. The paper concludes that although progress has been made in regeneration and health and there is potential in elements of the Modernisation Agenda that these do not equate to a paradigm shift in local government's perspective on health. Instead, the social care boundary continues to dominate local government's vision of health. Central to this picture of modest progress is the substantial barrier to more radical change provided by the performance management frameworks governing both sectors.     

Financing Local Government

There has been much debate in the UK over the implications for local government accountability of the high proportion of central funding of local government. The question has received particular attention recently as a key issue in the government's 'Balance of Funding' review. Two forms of accountability can be distinguished: average accountability and marginal accountability. This paper provides an analysis of the relationship between the balance of funding and these two concepts of accountability and concludes that increasing the proportion of local funding would be beneficial. One method of addressing problems caused by high central funding would be to introduce a local income tax alongside council tax, enabling the central grant to be reduced. The paper examines practical issues involved in the introduction of such a tax.     

Turkey’s Kurdish Problem: Steps Toward a Solution

Deep Kurdish and Turkish mistrust for each other, continuing PKK terrorist activity, the inadequacy of the government's reform measures, and the divided leadership of the Kurdish community are among many factors inhibiting a democratic solution of Turkey's Kurdish problem. This article recommends several measures for immediate implementation, including: “civic action” training for Turkish military and security personnel; open-ended conversations between moderate Turks and Kurds to define areas of accommodation; preemptive targeting of the PKK's military leadership; and a major commitment of resources to Turkey's economically deprived southeast—plus long overdue American assistance against the PKK and targeted EU economic assistance.     

China's economic integration into global regulatory frameworks: A study of government procurement

This paper examines the extent of China's integration in the global economy and its ability to implement the WTO commitments by using government procurement as a case study. This paper argues that the domestic framework of government procurement has been gradually harmonized with the WTO commitments. Full implementation of the commitments has been constrained by several factors: policy elites consider government procurement to be a drive of cost saving and against corruption instead of a policy of spurring trade liberalization. There are still significant discrepancies between the domestic and international regulatory frameworks. Besides that, the implementation contradicts the policy priorities of local state actors on whom the policy of elites heavily depend for success. The Chinese government's capacity in enforcing international agreements has further been undermined by the structural problems of the administration.     

Why Are Some States More Generous in Offering R&D Tax Credits than Others? An Empirical Answer

This article examines political cost factors that affect a state's propensity to adopt a corporate income tax credit to encourage research and development (R&D) activities in the United States. Assuming state elected officials are vote-maximizers, this article hypothesizes that politicians' consideration of potential revenue losses and influence from organized interests are critical in a state's decision to provide a R&D tax credit. To test the hypothesis, two statistical models are specified. With a dichotomous dependent variable of whether or not a R&D tax credit is offered, a Logit regression model is utilized. For the interval level dependent variable of effective R&D credit rates, this article specifies a Tobit model. The results show that politicians' concerns about revenue losses loom much larger than private organized interests.     

Agricultural Production,Dietary Diversity and Climate Variability

Abstract

Nonseparable household modelsoutline the interlinkage between agricultural production and household consumption, yet empirical extensions to investigate the effect of production on dietary diversity and diet composition are limited. While a significant literature has investigated the calorie-income elasticity abstracting from production, this paper provides an empirical application of the nonseparable household model linking the effect of exogenous variation in planting season production decisions via climate variability on household dietary diversity. Using degree days, rainfall and agricultural capital stocks as instruments, the effect of production on household dietary diversity at harvest is estimated. The empirical specifications estimate production effects on dietary diversity using both agricultural revenue and crop production diversity. Significant effects of both agricultural revenue and crop production diversity on dietary diversity are estimated. The dietary diversity-production elasticities imply that a 10 per cent increase in agricultural revenue or crop diversity result in a 1.8 per cent or 2.4 per cent increase in dietary diversity respectively. These results illustrate that agricultural income growth or increased crop diversity may not be sufficient to ensure improved dietary diversity. Increases in agricultural revenue do change diet composition. Estimates of the effect of agricultural income on share of calories by food groups indicate relatively large changes in diet composition. On average, a 10 per cent increase in agricultural revenue makes households 7.2 per cent more likely to consume vegetables, 3.5 per cent more likely to consume fish, and increases the share of tubers consumed by 5.2 per cent.     

The institutional dimensions of financial crisis management

This paper seeks to contribute to the political economy literature on the US subprime financial crisis by concentrating on the string of major financial bailouts that occurred between September 2007 and December 2008. Part of what is missing from the extant scholarship on the financial crisis is a strong analysis of the financial bailout that contemplates the changing nature of the government's response to the crisis and anchors the intervention in the key organizing rules of the post-Bretton Woods financial order. The central underlying claim is that the understanding of the crisis' impact on the US state may be enhanced if more attention is paid to the institutional-level learning processes and capacity building experiences that occurred during the worst period of turmoil as the financial system lay on the brink of complete collapse.     

The impact of tax structures on deficits: tax elasticity and fiscal illusion in sixteen oecd countries

This paper represents the first systematic attempt to link revenue structure to deficits cross-nationally. Recent analyses of the causes of increased budget deficits in the industrialized countries have focused on the factors that influence government spending, ignoring the possibility that chronic deficits might also be caused by shortfalls in revenue. In this research, using data from sixteen OECD countries during the period 1959-1990, we test hypotheses regarding the linkage between a country's revenue structure and its experience with deficits. We find evidence that countries heavily dependent on direct taxes had more difficulty keeping spending and revenues in line, particularly during times of high unemployment. We find no evidence, however, of a “fiscal illusion” impact on deficits.     

Public hospitals as competitors for medicaid revenue: the case study of St. Louis regional medical center

Medicaid revenues may determine whether public hospitals will survive. Public hospitals participate aggressively in the public market competition for their states’ Medicaid dollars. States must decide whether the survival of public hospitals, as providers of last resort to both Medicaid and uninsured patients, is of continuing importance to their Medicaid programs. Cities, if the states were willing, alternatively could voucher uninsured patients and direct Medicaid patients to the private hospitals that would outlive closed public hospitals. In fact, Medicaid's managed care programs already have heightened this competition, by organizing sufficiently large populations of prepaid Medicaid patients to attract networks of private providers to offer discounted prices, in competition with public hospitals for this market.

Although Medicaid has been a comparatively poor payer, nationally, almost half of public hospitals⁷ funding comes from this source of revenue. Urban public hospitals can barely live with Medicaid revenues, but the extent to which they can live without Medicaid revenues is being determined by surprising new turns in market competition for the revenue. A period of expansive and expensive new congressional mandates for the joint federal-state program was followed in the early 1990s by the introduction by the states of Medicaid revenue maximization strategies. The states’ funding levels, the bases for matching federal contributions, were artificially elevated by provider taxes, provider donations, and intergovernmental transfers. The revenue from all these sources was returned to these providers through the Disproportionate Share Hospital subsidy program for Medicaid-dependent hospitals, as soon as the federal revenue match was calculated, based upon the inflated figures. These practices currently are being stymied, and states simultaneously have escalated competitive bidding by private market managed care providers for Medicaid patients. Missouri has been in the forefront of states moving to maximize the federal Medicaid revenue match and to return Disproportionate Share Hospital funds to providers. St. Louis's public hospital, Regional Medical Center, has been weaned off its local government subsidies, as the intergovernmental transfer and DSH enticements compromised the stability of that hospital's revenue picture. Now, unprotected by an integrated healthcare system or other major role in a regional hospital network, this urban public hospital must struggle to survive within its Medicaid managed care competitive market. The question for the state of Missouri is whether perpetuating a future for Regional will ensure its Medicaid patients a traditional caring public medicine alternative as a fallback position, if Medicaid's present foray into the private market goes awry. For Regional and the city of St. Louis, the question is whether they can any longer count upon traditional state Medicaid revenue and financial support.     

Daughters and Displacement: Migration Dynamics in an Indonesian Transmigration Area

This study considers the ways 'indigenous' people have responded to the constraints and opportunities posed by the Indonesian government's transmigration programme in North Lampung, Sumatra. Migration is of increasing importance to the livelihoods of this group; particularly that involving the employment-related movement of young, unmarried women to the export-oriented factory zones of West Java. Female migration is notable in the context of customs confining unmarried women to the house, and negating their working in agriculture. The paper explores how factory migration has developed, drawing on field work conducted in 1994 and during the economic crisis in 1998, and focusing on the shifting terrain of intrahousehold power relations and decision-making in the community. Key to understanding migration dynamics in this area is the emergence of a culturally-conditioned social network linking village and city. This network has altered the terms upon which migration decisions and remittance practices are made, and may have cushioned.