Abstract
Based on a unique measure of performance of English local governments in the provision of public services (Comprehensive Performance Assessment, CPA), this paper develops a simple analytical framework that fully encompasses the institutional features of the British system of local government finance in order to model the process of performance determination, and uses panel data (2002-2007) to identify the determinants of local government performance. Due to the nature of CPA ratings - measured on a five category (poor to excellent) scale - the empirical work relies on an ordered response approach allowing for cross-sectional heterogeneity. Maximum likelihood estimation of a random effects ordered probit model provides no evidence in support of the spend more, get more hypothesis, but rather suggests that spending in excess of centrally set standards has a detrimental effect on local public service performance.
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