Saturday, January 13, 2007

Decision Time

[Post expanded]

I've just discovered an interesting series of radio programmes called Decision Time, chaired by Nick Robinson, the BBC political editor. [Note 1] Each programme looks at a controversial political issue, aiming not to resolve the issue but to expose the process whereby such decisions are reached behind closed doors in Whitehall.

Tonight's programme (January 13th) was on local government finance, and revealed the complex interplay between different government departments and agencies with different agendas.

I was particularly intrigued by the relationship between local taxation and local accountability. In the UK, a significant portion of local government funding comes from national taxes. So does greater funding give central government greater control over local government? Or if central government requires local government to raise a greater proportion of its funds from local taxes, does this force local government to be more careful with its expenditure?

There is an interesting game that central government plays with local government, which goes something like this: "We want you to do X, but we want you to do it democratically - in other words with a mandate from your local voters - rather than simply because we tell you to do it." X may be anything from cutting or capping public expenditure to raising standards or tackling environmental issues. Central government therefore wants to set the parameters of local government finance such that local government is forced to do the right things of its own accord. [Note 2]

There is also an interesting relationship between local autonomy and innovation. As mayor of London, Ken Livingstone introduced congestion charges at a time when many national politicians felt the scheme was politically infeasible. London's congestion charge, while not universally popular, is now seen as sufficiently successful to encourage other local authorities to consider similar schemes.

When I did some consultancy for local government a couple of years ago, I was told that most local government innovation took place in those boroughs that were the most politically stable - those in which the same party (didn't matter which) had governed for decades - while the most politically volatile boroughs were generally the most risk-averse. (Livingstone apparently represents a counter-example to this general trend, but his ability to do this is perhaps partly based on his personal reputation, built up over several decades, of introducing local innovations against the wishes of central government.)

For obvious reasons, the BBC programme is based on UK examples, but I guess that there are similar forces in most countries. Perhaps readers from other countries would care to comment - how does your federal/national/central government interact with regional/state/city governments?

Plenty of POSIWID here. To be continued ...

Note 1: Decision Time website, Nick Robinson's blog. Like most BBC radio programmes, this series is available on the internet for a limited period.

Note 2: Being forced to do something is a "bind". Being forced to do something of your own accord is a "double bind". See Wikipedia.

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