Comments on R. Jackman and J. Papadachi

Abstract

The real virtue of this paper, in my opinion, is its careful modelling of the U.K. institutional structure, in particular as this relates to the local authority budget constraint. This has not been done before in U.K. studies to the best of my knowledge. I was particularly pleased to see the authors take explicit account of the fact that the central government itself uses regression analysis as a basis for allocating grants to local authorities. There is a real danger that the unwary economist, while claiming to have unearthed a behavioural relationship applying to decentralised decision makers, will in his regression simply be replicating the rule used by the central authorities in allocating funds to state or local authorities. Jackman and Papadachi have not fallen into this trap.