Abstract
This paper estimates the impact of central grants on local spending decisions in England in the 19%. The analysis is based on a more explicit conceptual framework and a more appropriate methodology than conventionally used to measure grant effects in ‘output’ studies' of local policy variation. A set of six hypotheses is derived from political and economic theories of grant impact. The relationship between grants and expenditure change is estimated through a TSLS (Two Stage Least Squares) regression model. The main empirical results are that grants are an important constraint on spending decisions and that different types of grants have different effects: lump sum grants are substitutive and matching grants are stimulative. The evidence also indicates that spending is influenced by party politics, service needs and the local tax base.
Original language | English |
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Pages (from-to) | 207-233 |
Number of pages | 27 |
Journal | Public Administration |
Volume | 68 |
Issue number | 2 |
DOIs | |
Publication status | Published - Jun 1990 |