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This paper investigated the fiscal interactions between Italian municipalities over the period 2001–11 and found a positive horizontal interdependence in spending decisions. The results are robust to different specifications of the spatial neighbours and are confirmed by a natural experiment (an earthquake in the Abruzzo region of Italy in 2009) that creates an exogenous variation in the neighbours' spending. Furthermore, there is no evidence of yardstick competition when one considers political effects, while a negative relationship is found between spatial interaction and the size of the municipality. Thus, it can be concluded that spillover effects drive the strategic interactions in spending decisions.

This paper draws on recent research conducted by the authors to examine the nature of board/executive relations in three different kinds of Local Public Spending Body (LPSB). Big variations are noted, between & within sectors, in the way in which boards organize themselves & the degree of power they have in relation to executives. In all organizations studied, the executive played a crucial role both in managing day-to-day operations & in setting the organization's strategic direction. Chief executives exercised considerable influence over the recruitment of board members & the maintenance of consensual relations between board & executive. The dilemma of the voluntary board member with limited time & a lack of inside knowledge of the organization he/she is accountable for is examined. It is argued that the most effective boards contain members with a strong sense of their own legitimacy & enjoy a membership with a diverse range of interests & experiences. It is suggested that such models might combine the merits of greater democratic responsiveness & enhanced organizational effectiveness. 44 References. Adapted from the source document.

Presents initial findings from research undertaken in 1996 for the Joseph Rowntree Foundation into the internal governance of further education corporations, housing associations and training and enterprise councils. Discusses the relationship between board members and senior officers in these organizations by focusing on the distinctions drawn between strategy, policy and operations. Argues that the language of policy has increasingly been replaced by the language of strategy and that this corresponds to the evacuation of policy questions from the local public sphere. Advances four hypotheses to explain this rolling back of the frontiers of politics: a reassertion of the power of chief executives/managers linked to a new generation of social entrepreneurs; the emergence of a new generation of élite volunteers who restrict their activities to vision and strategy; a response to a rapidly changing economy, society, politics and environment in which speed of decision is of the essence; and increasing centralization. Concludes that a combination of internal and external pressures has reinforced the move towards the new governance.

THIS ARTICLE CONTENDS THAT THE THREE KINDS OF LOCAL PUBLIC SPENDING BODIES IN THE UNITED KINGDOM--FURTHER EDUCATION COLLEGES, HOUSING ASSOCIATIONS, AND TRAINING AND ENTERPRISE COUNCILS--ARE NOT INTERCHANGEABLE AND THAT A VITAL DISTINCTION NEEDS TO BE MAINTAINED BETWEEN THEM. SPECIFICALLY, THE ARTICLE ARGUES THAT POLICY REFERS TO COLLECTIONS OF DECISIONS GROUNDED IN PUBLIC VALUES WHEREAS THE CONCEPT OF STRATEGY REFERS TO THE POSITIONING OF AN ORGANIZATION IN ITS STRUGGLE TO SURVIVE AND GROW. THE ARTICLE CONCLUDES THAT LOCAL PUBLIC SPENDING BODIES HAVE BEEN INVITED TO BEHAVE STRATEGICALLY WITHIN A FRAMEWORK OF INCREASINGLY CENTRALIZED POLICY OBJECTIVES AND RESOURCE ALLOCATIONS.

Local Public Spending Bodies (LPSBs) occupy an important position in the contemporary structures of governance in the UK. As exemplars of many of the diverse characteristics of the New Public Management, LPSBs inhabit the fuzzy space between the public and private spheres, both in terms of organizational structure and service delivery. One finding from recent research into the internal governance of three kinds of LPSBs – Further Education Colleges, Housing Associations and Training and Enterprise Councils – was that the language of strategy predominated over that of policy on the boards of such organizations. In this article we assess the significance of this finding. We contend that the two terms are not interchangeable and that a vital distinction needs to be maintained between them. Specifically we argue that policy refers to collections of decisions grounded in public values whereas the concept of strategy, particularly as currently understood in the context of the New Public Management, refers to the positioning of an organization in its struggle to survive and grow. We conclude that LPSBs have been invited to behave strategically within a framework of increasingly centralized policy objectives and resource allocations.

AbstractMunicipalities in Poland are important makers of local cultural life. Municipalities organise and fund public cultural entities: libraries, houses of culture and so on. They decide on 70% of public spending on culture. The local spending on culture was grown in the past years. But the level of this spending varies between municipalities. The aim of this study is to find determinants of these differences. Public spending on culture is important in less-developed or peripheral regions where citizens do not have access to private cultural institutions. That is why this study focuses on rural municipalities. In econometric panel model, 1,565 units and their operational spending on culture in the years 2002–2014 is analysed. Four groups of potential determinants of spending are analysed: characteristics of local society, the financial condition of local government, characteristics of local politicians and the factors that influence the costs of cultural services. Such an approach has roots in the median voter model and is widely used in the analysis of decentralised spending, but the studies related to cultural spending are rare. To my knowledge, there is no such analysis for Poland or other East European countries. This study proved that an expenditure demand model is good for the analysis of local spending. This kind of analysis can help to understand local spending's variation. It also helps to design the proper revenues equalisation system.

SUMMARYThis paper deals with the occurrence of fiscal illusion and its effect on public expenditures. Fiscal illusion is here taken to be a systematic misperception by individuals of both the public revenue burden borne by them and the amount of benefit they derive from public expenditures. Taking the revenue structure and public outlays of the 110 largest Swiss cities as an example, it is shown that there is in fact empirical evidence for the existence of fiscal illusion (presently defined for the most part in the literature as a systematic underestimation of fiscal burden) and, as a result, for higher public expenditures when it occurs than when it is absent. By dividing the Swiss cities according to the degree of citizen participation in the making of public decisions, we were able to formulate hypotheses predicting to what degree fiscal burden illusion (understood as systematic underestimation) will occur under each system. These hypotheses have been empirically confirmed. Further analysis of the results has indicated that in cities in which the citizens can only indirectly participate in public decision‐making, the government and public bureaucracy have more freedom to act independent of the wishes of the voters with respect to expenditures, though these are taken more and more into consideration as elections approach. This expenditure behavior and particularly the concrete manner in which expenditures are adjusted to approaching general elections leads us to the conclusion that illusion with respect to the benefit derived from public expenditures also exists.

This paper examines a model of demand for local government-provided goods, and applies this to municipal spending in Turkey. Two sets of variables are tested: the socioeconomic characteristics of the localities, and the political variables. The results are generally in line with the previous findings for a set of socio-economic variables, however none of the political variables seem to have explanatory power, probably because of the high dependence of local governments on the central government and hence the lack of local accountability. We argue that the present system motivates local politicians to prefer relying on the central government rather than the local revenue sources as a way of avoiding the tax-related political risks. Thus, a serious local tax reform could be a crossroad to create local-political accountability. ; Publisher's Version

The purpose of this paper is to assess the effects of intermunicipal fiscal cooperation on municipal public spending, based on the French experience. A model of municipal spending choice is estimated using panel data and spatial econometrics for municipalities over the period 1994–2003. Two main results are provided. First, intermunicipal cooperation has no significant impact on the level of municipal public spending, which suggests that cooperation does not achieve its goal of reducing municipal spending by the sharing of local responsibilities. Second, there are no spending interactions between municipalities belonging to the same intermunicipal community. This is in line with the goal assigned to cooperation in terms of internalisation of spatial externalities. However, the results show that benefit spillovers remain highly significant outside intermunicipal communities.