The impact of citizen influence on local government expenditure

This paper examines the impact of three measures of direct citizen influence — the initiative, referendum, and recall — on the level of local public expenditure for a national sample of communities with 10,000 persons or more. Two types of statistical tests are performed to analyze the role of the median voter model and to measure the effect of these governmental characteristics on the level of public spending. Like earlier literature, this paper finds only modest effects of these structural characteristics on local government expenditure. Alternative methodologies are needed to explore the ambiguities which exist in many of the previous studies.     

The impact of government structure on local public expenditures

Though the relationship between local government structure and expenditure has received considerable attention, there is little consensus as to how the features of representative government affect local expenditure. An exception is city council size, which has consistently been found to be positively related to spending. Previous results rely on cross-sectional estimation which may be subject to omitted variable bias. This paper analyzes three components of municipal governments—the form of government, the size of the city council, and the election method of city councilors. Once fixed effects estimation is employed, the positive relationship between city council size and expenditure disappears.     

The effect of school district and municipal government financial health information on local tax election outcomes: evidence from fiscal stress labels in Ohio

A key informational asymmetry in local public finance is the lack of information available to local residents regarding the financial status of the school districts and local governments in which they reside. Given that voters in many states must approve property and income tax increases for these local entities, the lack of full information on the financial status of these local entities may lead to sub-optimal voting decisions. State financial intervention systems have begun to make financial problems more salient to residents, potentially alleviating these informational asymmetries. This paper examines the effect of the Ohio fiscal stress labeling program on voting outcomes and the tax-setting behavior of local officials for school district and municipal government tax referendums. We use a difference-in-differences approach to examine data from over 3000 school district and 2300 municipality property tax elections from 2004 to 2012. While we find minimal evidence that the yes vote share changed for school district referendums following fiscal stress label receipt, we find very large increases (15 to 23 percentage points) in the likelihood of referendum passage for school districts following label receipt. We do not find much evidence of changes in the likelihood of passage or the yes vote share following label receipt for municipalities, but we do find that these voting outcomes rise following label removal. We also find that local officials do not appreciably change their tax-setting behavior in response to these labels, as the size and likelihood of property tax proposal are largely unchanged following label receipt or removal.     

Urban local government finance in Nigeria: The case of Lagos municipal area

One of the most important results of the global reform of local governments in Nigeria in 1976 was to initiate a progressive increase in the amount of monetary transfers to local governments (LGs) by federal and state governments (especially the former). The proportion of federally collected revenues devoted to LGs increased rapidly from less than 2 per cent in 1976 to 15 per cent in 1990. This has enabled Nigerian LGs to play a more visible role in total public expenditures. On the other hand, huge federal transfers have led to sharp declines in absolute and relative terms in locally generated revenues. The two Lagos municipalities are able to generate up to 50 per cent of their total revenues. In contrast, the average for all local governments in the country is 4–5 per cent. The relatively large internal revenue sources in the two Lagos municipalities results in generous surpluses, which they are able to channel into capital development or special project expenditures. The single most important internal revenue source is the property tax, which is not even collected in some other large cities, such as Kano, Ogbomosho and Sokoto.     

An empirical analysis of municipal efficiency and local resident satisfaction by council type in Victorian local government

Although a voluminous empirical literature has examined local government efficiency, much less attention has focused on municipal effectiveness and almost no effort has been directed at the relationship between efficiency and effectiveness. In this paper, we seek to add to the latter nascent literature by investigating the relationship between operational efficiency and local resident satisfaction for three different municipal categories (metropolitan, regional, and rural councils) in the Victorian local government system over the period 2014–2015 to 2017–2018 using data envelopment analysis and an advanced regression model. We find that although a strong relationship exists between efficiency and satisfaction for metropolitan and regional councils, the same is not true of rural councils.     

Urban local government finance in Nigeria: The case of Onitsha local government

Onitsha, located along the route that connects south-western and south-eastern Nigeria, has a very financially dynamic local government. Over one-quarter of the total revenues of this local government come from its market and motor parks. This is an unusual source for a local government that has perhaps the largest per capita revenue in Nigeria—almost N40, compared with the national average of N4.9. The procedure for collecting this revenue is regarded as highly successful since there is greater reliance on the citizens than tax officials. The volume of revenues collected has allowed the council maintain a large surplus revenue over a long period of time, which enables it to carry out important programmes of primary and adult education. It is also beginning to develop its property revenue collection system in collaboration with the Anambra State government.     

Jurisdiction size and local government effectiveness: Assessing the effects of municipal amalgamations on performance

The optimal jurisdiction size has been debated since Plato and Aristotle. A large literature has studied economic and democratic scale effects, but we have almost no knowledge of the effects of jurisdiction size on the effectiveness of local services. This is due to two methodological problems. First, selection bias and reverse causality often render change in jurisdiction size an endogenous variable. Second, there is a lack of empirical indicators of effectiveness, and most studies therefore focus on spending measures. Extant research thus studies economies of scale, leaving effectiveness of scale unexamined. We address both problems in a quasi-experimental study of public schools. Our findings from the school area indicate that jurisdiction size does not have systematic effects on effectiveness. Our analysis therefore supports recent studies of economic and democratic scale effects that indicate that the search for the optimal jurisdiction size is futile.     

Pathways to impact in local government: the mini-Stern review as evidence in policy making in the Leeds City Region

Although in recent years great emphasis has been placed on global agreements and national commitments on climate change, ultimately action on mitigation and adaptation must take place at the local level. Many local authorities have to face questions of whether they should develop policies on climate change, and if so, on what evidence should policies be designed and delivered. This paper describes how academic research on the economics of low carbon cities (the ‘mini-Stern review’) helped create such an evidence base for the Leeds City Region and its constituent local authorities. We describe how the response to the evidence and the pathways to impact were different in the individual local authorities and what this means for our understanding of evidence in local policy making. In terms of Weiss’ (Social sciences and modern states: national experiences and theoretical crossroads. Advances in political science, Cambridge University Press, Cambridge, 1991) classification, the study was mainly useful as an argument and idea rather than being used instrumentally. We find that the policy and political context in each authority determines to a large extent whether such an academic study is useable as evidence. The contents and timing of the study need to align with existing policy and/or political agendas: is climate change on the agenda at all, with what priority and how is it framed. We find confirmation of a relationship between the policy problem type and the role of evidence as argument, idea or data. The mini-Stern study itself was just one contribution to wide-ranging processes of informing, convincing, pressurising, etc., not just within the different councils but also within the wider communities. Other contextual factors include composition, agenda and activities of local civil society and the local business community. Finally, it depends on the expertise of policy officers in the councils what use is made of evidence. Making policy takes (much) time, translation and negotiation across levels and sectors. Policy work describes how policy officers bring their diverse forms of knowledge to bear on policy questions; how this work is done is something that is learned from practice rather than from the study.     

The local state and urban local government in Zambia

It is argued, with reference to urban local government in Zambia, particularly in Lusaka, that recent debates on the form and functions of the national state in Africa may be used to illuminate the working of the urban local state. Available evidence on the class interests represented in the urban local state is reviewed, and these interests and their actions with respect to personal accumulation and political clientelism are found to be similar to those found at the national level. The urban local state in Zambia performs functions similar to those which have been revealed by analyses of other countries, although the nature of these functions, and the extent to which they are successfully performed, is influenced by the political and economic context, the institutional framework and especially the constraints imposed by central government on local autonomy. The changes proposed in the 1980 Local Administration Act are outlined, and a preliminary assessment made of the extent to which they are likely to change the form and functions of the urban local state.     

The politics of redistribution in local government

Abstract. This paper deals with the politics of redistribution in local government. Traditionally, it has been assumed that redistributive policies are crucial in electoral competition and party politics, both in national and local political systems. From this perspective, differences in local competition and party systems are essential to an explanation of local redistributive efforts. Peterson (1981), however, claims that redistributive policies are excluded from the local agenda because they impair local economic prosperity. These policies are therefore not conceived as instruments in the vote-maximizing strategies of local political parties. In this paper, hypotheses on the impact of party competition and party politics on local redistribution are formulated and tested on data for 342 Dutch municipalities. The results show that, contrary to what would be expected from Peterson's perspective, municipal redistributive efforts were related to electoral competitiveness and the party system. The proposed model, however, proved to be unsatisfactory in accurately predicting the direction of the effects of these explanatory variables. These results suggest that, rather than abandoning the study of local redistribution as a non-issue in subnational politics, an effort should be made to develop a better theoretical understanding of the ways in which competition and party politics shape these policies.     

Political accountability,fiscal conditions and local government performance—cross‐sectional evidence from Indonesia

Why are some local governments more successful than others in managing resources and delivering services? And even more vitally, how can malfunctioning governments be reformed so that they perform their responsibilities more effectively? This article contributes to our understanding of theses overarching questions by exploring the interactions between political institutions and public sector performance in the context of decentralisation and local governance. It shows–both theoretically and empirically–that performance outcomes are determined by the extent to which people can hold their governments accountable through political institutions. The basic hypothesis underlying this research is that political accountability, either by encouraging sanctions upon non‐compliant public agents or simply by reducing the informational gap regarding government activities, will create forceful incentives for elected officials and civil servants to reduce opportunistic behaviour and improve performance. Using a cross‐sectional regression the hypothesis is empirically tested against evidence from newly empowered local governments in Indonesia. The empirical findings broadly support our hypotheses. Improved public services on the ground, both in terms of quantity and quality, require informed and well functioning decision‐making processes that allocate resources to priority areas that meet the demand of the broader community. Copyright © 2008 John Wiley & Sons, Ltd.     

The incidence of local government allocations in Tanzania

Since 1999, Tanzania has been actively pursuing reforms of the way in which the central government finances local government activities. This article looks at the potential problems with the mechanism that the central government currently uses to distribute budget resources among the 114 local government authorities and sets out to reveal the incidence of central government allocations to local authorities in Tanzania. Two strands of economics literature—the public choice literature and the political economy literature—consider the distribution of central government resources across local governments. Using regression analysis, this study specifies an incidence model that reveals the determinants of variations in local government allocations in Tanzania. The empirical analysis only finds weak evidence supporting the presumed pro‐poor allocation of some local government resources by the central government in Tanzania. Instead, the study finds more convincing support for substantial pro‐wealthy and pro‐urban tendencies in the way in which central government officials divide public resources across local government units. Copyright © 2003 John Wiley & Sons, Ltd.     

The revenue position of local government in Nigeria

Financial viability has been presented officially as crucial to the success of the sweeping reforms of local government in Nigeria and this article reviews the situation facing the new local government councils four years after the reforms were instituted. It sets the present situation against a background of past trends in which local government was financially dependent on regional and state governments, and subjected to increasingly detailed controls. Reviewing the present continuing dependence on state and federal government for finance, the limited use made of independent revenue bases, and the political and administrative factors militating against financial viability, the article argues that local government cannot escape from the vicious circle of underdevelopment.     

The political trend in local government tax setting

Previous fiscal studies have paid little attention to the effects of social interaction on local tax setting. This paper seeks to fill this gap by developing a theoretical model in which politicians belonging to the same party interact with each other in order to draw inferences about ideology. This phenomenon produces a mimic effect which is called the political trend. The results of the analysis show that the political trend gives rise to higher income tax rates and to tax mimicking at the local government level. The framework developed also makes it possible to discriminate between Leviathan-type and welfarist-type politicians. The results show that the former are more sensitive than the latter to changes in the average income tax rate of their peers. Moreover, Leviathan-type politicians are less sensitive than benevolent ones to changes in the central government’s income tax rate.     

The impact of parties in government on legislative output in Italy

Abstract. Frequent government crisis and high legislative output have distinguished Italy for over forty years. Previous explanations of the Italian legislative process have focused on the institutions established since the Second World War. In particular, the ability of the parliamentary committees to pass legislation, and the 'polarized' nature of the Italian party system have received a great deal of attention. This type of structural analysis has proved unable to successfully explain the significant variations in legislative output which have occurred since the early 1950s. This paper attempts to add to previous structural models by demonstrating that much of the variation which has occurred can be linked to the number of parties participating in the governing coalition. Furthermore, the paper questions previous interpretations of leggine (small laws) and the role they play within the legislative process by demonstrating their positive relationship to regular legislation.     

Determinants of government size: evidence from China

This paper investigates the determinants of government size at the provincial level in China. We employ the panel data model as a platform for empirical analysis and control for endogeneity in the study. Our study shows that openness to trade and foreign direct investment (FDI) may curtail government expansion, and that the provincial-level public sector is characterized by economies of scale. This study also documents that Wagner’s law does not hold true for China. Moreover, both expenditure decentralization and revenue decentralization contribute to the expansion of China’s government.     

The politics of local government reform in rural Bangladesh

Several changes have been introduced in the system of local government in rural Bangladesh following the country's independence. Examination reveals that they were changes only in nomenclature, and did not result in significant improvements. The constant effort by the central government to retain control over local bodies, and the tendency of the ruling elite not to disturb the existing local government system, have worked to the detriment of reforms. The existing local government system failed to satisfy the aspirations of the rural Bangladeshis for increased participation in local affairs. After the first change of government in Bangladesh, the new ruling group felt the need for a support base in the rural areas. The formation of a new political party and the necessity of extending it to the grass roots, increased the desire of the people to participate in local affairs, and the realization of the importance of initiating and completing rural development programmes at the lowest level made the government aware of the need for local government institutions based in the villages. The government was impressed by the success of the Swanirvar Bangladesh Andolon, and introduced Swanirvar Gram Sarkar as a major reform in the local government system.