The Effect of Inter-Municipal Cooperation on Social Assistance Programs
Evidence from Housing Allowances in England
Principal Investigator: Thomas Elston
Associate Professor in Public Administration, Blavatnik School of Government, University of Oxford
Decentralized administration of nationally designed and/or funded social assistance programs requires significant organizational capacity among sub-national governments, especially when welfare entitlements are subject to frequent rule change, intricate means testing, or coordination across multiple schemes. In some circumstances, inter-municipal cooperation can enhance local policy implementation; but, to-date, impact evaluations have focused on public services that are more capital-intensive and less co-produced than social assistance (like utilities or refuse collection), and on the effect of cooperation on service costs rather than quality (attributes that may trade-off against one another). Whether inter-municipal cooperation is economically efficient, therefore, and whether it can enhance the performance of locally administered social assistance programs, remains uncertain. To investigate, we analyze panel data describing the cost and quality of housing allowance administration by 300 local authorities in England during 2009-19, a period in which 66 adopted inter-municipal arrangements. Using stacked difference-in-differences estimators, we find no evidence for short-term administrative savings after cooperation, and weak indication (p<0.1) of long-term reductions. Conversely, we find a sustained decline in service speed (p<0.01), but limited indication of reduced accuracy. Further, for councils already close to the best-in-class frontier, cooperation appears to have caused trade-offs among quality dimensions.
The Effect of Inter-Municipal Cooperation on Social Assistance Programs: Evidence from Housing Allowances in England | May 12, 2023