Explaining the Puzzles in Policy Change: Local Finance Reform in Britain

This paper compares four different theoretical accounts of the reform of British local government finance at the end of the 1980s: public choice, marxian political economy, bureaucratic process, and party politics. Five key questions are identified as the most essential and puzzling features of the change: why reform; the timing of reform and implementation; the national non-domestic rate; the choice of a poll tax; and why the ‘final solution’ of direct central control has been eschewed. The ability of each theoretical approach in answering these five key questions is then assessed in the light of what we know about the history and logic of local government finance in Britain. The conclusion is that the reform can be explained, but that no single theoretical approach can give a completely satisfactory account. Overall, a competitive party politics model, complemented by public choice ideology and bureaucratic process, gives the fullest explanation.