Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England
AbstractThis paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a simple theoretical political agency model, we predict that CPA should increase service quality and local taxation, but have an ambiguous effect on the efficiency of service provision. We test these predictions using a difference in difference approach, using Welsh local authorities as a control group, exploiting the fact that local authorities in Wales were not subject to the same CPA regime. To do this, we construct original indices of service quality and efficiency, using Best Value Performance Indicators. We estimate that CPA increased the effective band D council tax rate in England relative to Wales by 4%, and increased our index of service quality output also by about 4%, but had no significant effect on our efficiency indices. There is evidence of heterogeneous effects of CPA on efficiency, with some evidence that CPA impacted more on less efficient councils, and the ‘harder test’ from 2005-8 having a much bigger effect.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3483.
Date of creation: 2011
Date of revision:
local government; incentives; efficiency; difference in difference; DEA;
Find related papers by JEL classification:
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gersbach, Hans & Liessem, Verena, 2008.
"Incentive contracts and elections for politicians with multi-task problems,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 68(2), pages 401-411, November.
- Gersbach, Hans & Liessem, Verena, 2003. "Incentive Contracts and Elections for Politicians with Multi-Task Problems," CEPR Discussion Papers 4075, C.E.P.R. Discussion Papers.
- Besley, Timothy & Coate, Stephen, 1997.
"An Economic Model of Representative Democracy,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(1), pages 85-114, February.
- Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
- Tim Besley & Stephen Coate, . ""An Economic Model of Representative Democracy''," CARESS Working Papres 95-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Alesina, Alberto & Tabellini, Guido, 2008.
"Bureaucrats or politicians? Part II: Multiple policy tasks,"
Journal of Public Economics,
Elsevier, vol. 92(3-4), pages 426-447, April.
- Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part II: Multiple Policy Tasks," Levine's Working Paper Archive 321307000000000875, David K. Levine.
- Eric Maskin & Jean Tirole, 2004.
"The Politician and the Judge: Accountability in Government,"
Economics Working Papers
0020, Institute for Advanced Study, School of Social Science.
- Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
- Eric Maskin, 2003. "The Politician and the Judge: Accountability in Government," Theory workshop papers 505798000000000076, UCLA Department of Economics.
- Propper, Carol & Sutton, Matt & Whitnall, Carolyn & Windmeijer, Frank, 2010.
"Incentives and targets in hospital care: Evidence from a natural experiment,"
Journal of Public Economics,
Elsevier, vol. 94(3-4), pages 318-335, April.
- Carol Propper & Matt Sutton & Carolyn Whitnall & Frank Windmeijer, 2008. "Incentives and Targets in Hospital Care: Evidence from a Natural Experiment," The Centre for Market and Public Organisation 08/205, Department of Economics, University of Bristol, UK.
- Leopold Simar & Paul Wilson, 2000.
"A general methodology for bootstrapping in non-parametric frontier models,"
Journal of Applied Statistics,
Taylor and Francis Journals, vol. 27(6), pages 779-802.
- Simar, L. & Wilson, P.W., 1998. "A General Methodology for Bootstrapping in Nonparametric Frontier Models," Papers 9811, Catholique de Louvain - Institut de statistique.
- Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
- Kneip, Alois & Park, Byeong U. & Simar, L opold, 1998. "A Note On The Convergence Of Nonparametric Dea Estimators For Production Efficiency Scores," Econometric Theory, Cambridge University Press, vol. 14(06), pages 783-793, December.
- Léopold Simar & Paul W. Wilson, 1998.
"Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models,"
INFORMS, vol. 44(1), pages 49-61, January.
- SIMAR, Léopold & WILSON, Paul, 1995. "Sensitivity Analysis to Efficiency Scores : How to Bootstrap in Nonparametric Frontier Models," CORE Discussion Papers 1995043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Simon Burgess & Deborah Wilson & Jack Worth, 2010. "A natural experiment in school accountability: the impact of school performance information on pupil progress and sorting," The Centre for Market and Public Organisation 10/246, Department of Economics, University of Bristol, UK.
- Revelli Federico, 2008.
"Spend more, get more? An inquiry into English local government performance,"
Department of Economics and Statistics Cognetti de Martiis. Working Papers
200804, University of Turin.
- Federico Revelli, 2010. "Spend more, get more? An inquiry into English local government performance," Oxford Economic Papers, Oxford University Press, vol. 62(1), pages 185-207, January.
- Stewart, Mark B., 2002.
"The Impact Of The Introduction Of The Uk Minimum Wage On The Employment Probabilities Of Low Wage Workers,"
The Warwick Economics Research Paper Series (TWERPS)
630, University of Warwick, Department of Economics.
- Mark B. Stewart, 2004. "The Impact of the Introduction of the U.K. Minimum Wage on the Employment Probabilities of Low-Wage Workers," Journal of the European Economic Association, MIT Press, vol. 2(1), pages 67-97, 03.
- Stewart, Mark B., 2002. "The Impact of the Introduction of the UK Minimum Wage on the Employment Probabilities of Low Wage Workers," Royal Economic Society Annual Conference 2002 169, Royal Economic Society.
- Dewatripont, Mathias & Jewitt, Ian & Tirole, Jean, 1999.
"The Economics of Career Concerns, Part I: Comparing Information Structures,"
Review of Economic Studies,
Wiley Blackwell, vol. 66(1), pages 183-98, January.
- Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999. "The economics of career concerns: part 1 :comparing information structures," ULB Institutional Repository 2013/9617, ULB -- Universite Libre de Bruxelles.
- Revelli, Federico, 2008.
"Performance competition in local media markets,"
Journal of Public Economics,
Elsevier, vol. 92(7), pages 1585-1594, July.
- Revelli Federico, 2008. "Performance Competition in Local Media Markets," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200801, University of Turin.
- Timothy Besley, 2004. "Joseph Schumpeter Lecture: Paying Politicians: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 193-215, 04/05.
- Roxana Guti�rrez-Romero & Dirk Haubrich & Iain McLean, 2008. "The limits of performance assessments of public bodies: external constraints in English local government," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 26(4), pages 767-787, August.
- Rogoff, Kenneth & Sibert, Anne, 1988.
"Elections and Macroeconomic Policy Cycles,"
Review of Economic Studies,
Wiley Blackwell, vol. 55(1), pages 1-16, January.
- Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," Oxford Review of Economic Policy, Oxford University Press, vol. 19(2), pages 285-300, Summer.
- Papke, Leslie E. & Wooldridge, Jeffrey M., 2008. "Panel data methods for fractional response variables with an application to test pass rates," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 121-133, July.
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Besley, Timothy J. & Bevan, Gwyn & Burchardi, Konrad B., 2009. "Naming & Shaming: The impacts of different regimes on hospital waiting times in England and Wales," CEPR Discussion Papers 7306, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.