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Corrigendum to: Impasse or mutation? Austerity and (de)financialisation of local governments in Britain

Author

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  • Hulya Dagdeviren
  • Ewa Karwowski

Abstract

Post crisis, local governments’ (LGs) budgets have been drastically cut in Britain. Similar budgetary strains had serious consequences in the past, leading to major restructuring in LGs’ functions. This paper interrogates the spatial dynamics of short-term municipal finances by putting into dialogue the political economy perspectives on financialisation with the economic geography literature on urban governance. Using data for over 400 municipal authorities in Britain, we examine locational underpinnings of changing financial practices with respect to spending cuts. We find that austerity increased risk and uncertainty for LGs. To preserve key services in such an environment, they resorted to short-term borrowing in breach of regulatory guidance. Effectively, an internal market for inter-council lending and borrowing has been created based on market principles in which LGs with surplus cash and reserves have extended credit to those with liquidity problems. On the asset side, the austerity programme forced them to embrace financial logics through a spectacular shift from cash and deposit holdings to investment in money market funds and credit extension as they have strived to generate as much income as possible to fund services at risk.
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Suggested Citation

  • Hulya Dagdeviren & Ewa Karwowski, 2022. "Corrigendum to: Impasse or mutation? Austerity and (de)financialisation of local governments in Britain," Journal of Economic Geography, Oxford University Press, vol. 22(3), pages 709-709.
    • Handle: RePEc:oup:jecgeo:v:22:y:2022:i:3:p:709-709.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbab037
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    Cited by:

    1. Hannah Hasenberger, 2024. "What is local government financialisation? Four empirical channels to clarify the roles of local government," Urban Studies, Urban Studies Journal Limited, vol. 61(11), pages 2039-2059, August.
    2. Zhenfa Li & Fulong Wu & Fangzhu Zhang, 2023. "State de-financialisation through incorporating local government bonds in the budgetary process in China," Journal of Economic Geography, Oxford University Press, vol. 23(5), pages 1169-1190.
    3. Yi Feng & Fulong Wu & Fangzhu Zhang, 2024. "Building state centrality through state selective financialization: Reconfiguring the land reserve system in China," Environment and Planning A, , vol. 56(3), pages 766-783, May.

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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