Targeting Benefits for Electoral Gain: Constituency Marginality and the Distribution of Grants to English Local Authorities

We model the spatial allocation of resources over constituencies as an optimization problem in which governing parties face uncertainty about voter preferences, but seek to increase their chances of getting re-elected. We show that a rational government should allocate extra resources to marginal constituencies and especially favour opposition-held marginals. We test this hypothesis on data about central government grants to larger English local authorities. We consider whether Conservative controlled and 'flagship' local authorities also benefit. Our empirical results suggest that the government allocated around £500 million more to local authorities containing marginal constituencies and around £155 million more to 'flagship' local authorities than they could have been expected to get on the criteria of social need and population.