Fiscal decentralisation and local government efficiency: Does relative deprivation matter?

Jose M Alonso and Rhys Andrews

Environment and Planning C, 2019, vol. 37, issue 2, 360-381

Abstract: Fiscal decentralisation arguably improves government efficiency because it enhances responsiveness to local policy issues and incentivises fiscal discipline. However, critics suggest that central control over local spending is necessary to equalise fiscal outcomes between prosperous and deprived areas. Using a two-stage analysis, we investigate the validity of these arguments by analysing the separate and combined effects of fiscal decentralisation and socio-economic deprivation on the productive efficiency of English local governments during 2002–2008. The results suggest that decentralisation is positively related to productive efficiency and that there is a negative relationship between socio-economic deprivation and efficiency. Further analysis reveals that deprivation weakens the positive decentralisation–efficiency relationship, calling into question simplistic proposals for fiscal decentralisation.

Keywords: Fiscal centralisation; deprivation; efficiency; local government; England (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/2399654418784947 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:37:y:2019:i:2:p:360-381

DOI: 10.1177/2399654418784947

Access Statistics for this article

More articles in Environment and Planning C
Bibliographic data for series maintained by SAGE Publications ().