## The Determinants and Efficiency of Local Authority Spending in England

_IMF Working Papers, January 1, 1991_

## Source details

**Canonical URL:** [The Determinants and Efficiency of Local Authority Spending in England](https://www.imf.org/en/publications/wp/issues/2016/12/30/the-determinants-and-efficiency-of-local-authority-spending-in-england-886)

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## Bibliographic details
- Authors: James P. F. Gordon, Tamim Bayoumi
- Published: January 1, 1991
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451927108.001

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### Summary / Main findings
- The 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.
- It is found that local services are in general excessive from the capitalization standpoint.
- Application of the analysis to the recently introduced local government reforms suggest small effects on the overall level of spending.

### Efficiency test: capitalization of local spending in house prices
- Method: Use capitalization of local spending in house prices as a test of efficiency.
- Result: Local services are in general excessive when evaluated by capitalization in house prices.

### Determinants of local government spending (estimated)
- Significant determinants identified:
  - Local incomes
  - The tax price faced by the electorate
  - Local party control

### Policy implications and local government reforms
- Application of the estimated determinants and efficiency analysis to recently introduced local government reforms suggests:
  - Small effects on the overall level of spending.

### Subject areas and keywords
- Subject: Expenditure, Housing, Housing prices, Income, Labor, National accounts, Prices
- Keywords: authorities rise, benefit principle, government grant, Housing, Housing prices, Income, local authority expenditure, local government, property tax, spending authorities, tax price, thatcher government, United Kingdom government, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-determinants-and-efficiency-of-local-authority-spending-in-england-886_