Does local democracy help or hinder the solution of collective action problems? We study this question in the context of public spending on health-related urban amenities in a panel of 75 municipal boroughs in England and Wales in 1868, 1871 and 1886. We .nd evidence of a U-shaped relationship between spending on urban amenities and the extension of the local voting franchise. We argue that this retrenchment e¤ect arose because middle class taxpayers were unwilling to pay the cost of poor sanitation and the urban elites, elected on a narrow franchise, were instrumental for sanitary improvements. Our model of taxpayer democracy suggests that the retrenchment e¤ect is related to forced enfranchisement of the middle class through nation-wide reforms.
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Find related papers by JEL classification: D62 - Microeconomics - - Welfare Economics - - - Externalities D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913
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