Charity in the time of austerity: in search of the 'Big Society'

Stephen Gibbons and Christian Hilber

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: The years after the election of the UK's coalition government in 2010 saw a decline in central funding to local government and a fall in expenditure on a range of local services, including social services. These cuts were backed by a theory that individuals in the community would step in with voluntary action (the 'Big Society') to fill the void left by withdrawal of public support, a specific case of the argument that government activity crowds-out that of private individuals. This paper asks to what extent this vision materialised. Using a large panel survey of individuals linked to detailed local government income and spending data for the period from 2008/9 until 2016/7 we estimate the effect of local public services spending and central government funding on individual caring, voluntary and charitable behaviour. We find some evidence of an association between Local Authority (LA) expenditure cuts and increases in voluntary activity and charitable giving in the area. Using central government funding cuts as an exogenous source of variation in LA spending, we find no effects on any aspects of individual caring, voluntary or charitable action. Overall, we find little support for the proposition that (cutting) public sector spending crowds out (increases) individual philanthropic activities.

Keywords: public spending; social care; charitable giving; crowding out hypothesis; Big Society (search for similar items in EconPapers)
Date: 2022-10-10
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Working Paper: Charity in the time of austerity: in search of the 'Big Society' (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1874

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