Incentive schemes for local government: theory and evidence from comprensive performance assessment in England
Lockwood, Ben; Porcelli, Francesco
Date: 3 August 2013
Journal
American Economic Journal: Economic Policy
Publisher
American Economic Association
Publisher DOI
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Abstract
This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a 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 ...
This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a 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 Welsh local governments as a control group: CPA increased the property tax, and our index of service quality, but had no significant effect on efficiency overall. There is evidence of a heterogenous effect of CPA: it impacted more on councils where electoral competition was initially weak, in line with our theory.
Economics
Faculty of Environment, Science and Economy
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