In the Grip of Whitehall? The Effects of Party Control on Local Fiscal Policy in the UK

Benjamin Lockwood, Francesco Porcelli and James Rockey
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Benjamin Lockwood: University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper uses an instrumental variable approach based on close elections to evaluate the effect of political parties on local fiscal policy in England and Wales over the period 1998-2016. Our main finding is that political control of the council (by Labour, Conservative or Liberal Democrat parties) has no effect on total expenditure, the composition of expenditure, the property tax rate (council tax per band D property) or total council tax revenue. Thus, our results confirm the widely expressed belief that centrally imposed constraints on local government fiscal policy (rate-capping, and more recently, compulsory referenda) hold local government fiscal policy in a tight grip. JEL classification: H70 ; H71 ; D72

Keywords: Party Control; Grants; Government Spending; Taxation (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-mac, nep-pol and nep-ure
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https://warwick.ac.uk/fac/soc/economics/research/w ... _1406_-_lockwood.pdf

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Working Paper: In the Grip of Whitehall? The Effects of Party Control on Local Fiscal Policy in the UK (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1406

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