The bidding game: Competitive funding regimes and the political targeting of urban programme schemes

British Journal of Political Science

Volumn 34, Issue 3, 2004, Pages 405-428

  John, Peter ^a   Ward, Hugh ^b   Dowding, Keith ^c  

^a UNIVERSITY OF LONDON   (United Kingdom)

^b UNIVERSITY OF ESSEX   (United Kingdom)

^c LONDON SCHOOL OF ECONOMICS   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 3042698341     PISSN: 00071234     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0007123404000110     Document Type: Article

References (83)

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33. C. Goss, 'Military Committee Membership and Defense Related Benefits in the House of Representatives', Western Political Quarterly, 25 (1972), 215-33; B. Ray, 'Congressional Losers in the U. S. Spending Process', Legislative Studies Quarterly, 3 (1980), 357-72; J. Gist and R. Hill, 'Political and Economic Influences on the Bureaucratic Allocation of Federal Funds: the Case of Urban Development Action Grants', Journal of Urban Economics, 16 (1984), 158-72; R. Stein and K. Bickers, Perpetuating the Pork Barrel (Cambridge: Cambridge University Press, 1995); S. Balla, E. Lawrence, F. Maltzman and L. Sigelman, 'Partisanship, Blame Avoidance, and the Distribution of Legislative Pork', American Journal of Political Science, 46 (2002), 515-25.
34. C. Goss, 'Military Committee Membership and Defense Related Benefits in the House of Representatives', Western Political Quarterly, 25 (1972), 215-33; B. Ray, 'Congressional Losers in the U. S. Spending Process', Legislative Studies Quarterly, 3 (1980), 357-72; J. Gist and R. Hill, 'Political and Economic Influences on the Bureaucratic Allocation of Federal Funds: the Case of Urban Development Action Grants', Journal of Urban Economics, 16 (1984), 158-72; R. Stein and K. Bickers, Perpetuating the Pork Barrel (Cambridge: Cambridge University Press, 1995); S. Balla, E. Lawrence, F. Maltzman and L. Sigelman, 'Partisanship, Blame Avoidance, and the Distribution of Legislative Pork', American Journal of Political Science, 46 (2002), 515-25.
35. C. Goss, 'Military Committee Membership and Defense Related Benefits in the House of Representatives', Western Political Quarterly, 25 (1972), 215-33; B. Ray, 'Congressional Losers in the U. S. Spending Process', Legislative Studies Quarterly, 3 (1980), 357-72; J. Gist and R. Hill, 'Political and Economic Influences on the Bureaucratic Allocation of Federal Funds: the Case of Urban Development Action Grants', Journal of Urban Economics, 16 (1984), 158-72; R. Stein and K. Bickers, Perpetuating the Pork Barrel (Cambridge: Cambridge University Press, 1995); S. Balla, E. Lawrence, F. Maltzman and L. Sigelman, 'Partisanship, Blame Avoidance, and the Distribution of Legislative Pork', American Journal of Political Science, 46 (2002), 515-25.
36. Stein and Bickers, Perpetuating the Pork Barrel.
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40. G. Wright 'The Economic Determinants of New Deal Spending', Review of Economic Statistics, 26 (1974), 30-8; Johnston, 'The Aggregation of Federal Money'; J. N. Reid, 'Politics, Program Administration, and the Distribution of Grants-in-Aid: A Theory and a Test', in B. Runquist, ed., Political Benefits (Lexington, Mass.: Lexington, 1980); H. Raimondo, 'The Political Economy of State Intergovernmental Grants', Growth and Change. 14 (1983), 17-23; A. Worthington and B. Dollery, 'The Political Determination of Intergovernmental Grants in Australia', Public Choice, 94 (1998), 299-315; Ward and John, 'Targeting Benefits'; Dahlberg and Johannson, 'On the Vote Purchasing Behavior of Incumbent Governments'.
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46. G. Wright 'The Economic Determinants of New Deal Spending', Review of Economic Statistics, 26 (1974), 30-8; Johnston, 'The Aggregation of Federal Money'; J. N. Reid, 'Politics, Program Administration, and the Distribution of Grants-in-Aid: A Theory and a Test', in B. Runquist, ed., Political Benefits (Lexington, Mass.: Lexington, 1980); H. Raimondo, 'The Political Economy of State Intergovernmental Grants', Growth and Change. 14 (1983), 17-23; A. Worthington and B. Dollery, 'The Political Determination of Intergovernmental Grants in Australia', Public Choice, 94 (1998), 299-315; Ward and John, 'Targeting Benefits'; Dahlberg and Johannson, 'On the Vote Purchasing Behavior of Incumbent Governments'.
47. A. Hoare, 'Dividing the Pork Barrel: Britain's Enterprise Zone Experience', Political Geography Quarterly, 4 (1985), 29-46; and I. Turok and N. Hopkins, 'Competition and Area Selection in Scotland's New Urban Policy', Urban Studies, 35 (1998), 2021-61; Dahlberg and Johannson, 'On Vote Purchasing Behavior'.
48. A. Hoare, 'Dividing the Pork Barrel: Britain's Enterprise Zone Experience', Political Geography Quarterly, 4 (1985), 29-46; and I. Turok and N. Hopkins, 'Competition and Area Selection in Scotland's New Urban Policy', Urban Studies, 35 (1998), 2021-61; Dahlberg and Johannson, 'On Vote Purchasing Behavior'.
49. A. Hoare, 'Dividing the Pork Barrel: Britain's Enterprise Zone Experience', Political Geography Quarterly, 4 (1985), 29-46; and I. Turok and N. Hopkins, 'Competition and Area Selection in Scotland's New Urban Policy', Urban Studies, 35 (1998), 2021-61; Dahlberg and Johannson, 'On Vote Purchasing Behavior'.
50. Ward and John, 'Targeting Benefits'.
51. P. Dunleavy, Democracy, Bureaucracy and Public Choice (Basingstoke, Hants.: Harvester Wheatsheaf, 1991), chaps 4 and 5; K. Dowding, The Civil Service (London: Routledge, 1995), chap. 5.
52. P. Dunleavy, Democracy, Bureaucracy and Public Choice (Basingstoke, Hants.: Harvester Wheatsheaf, 1991), chaps 4 and 5; K. Dowding, The Civil Service (London: Routledge, 1995), chap. 5.
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56. H. Heclo and A. Wildavsky, The Private Government of Public Money (London: Macmillan, 1974); R. Rose and P. Davies, Inheritance in Public Policy: Change Without Choice in Britain (New Haven, Conn.: Yale University Press, 1994).
57. J. Baumgartner and B. Jones, Agendas and Instability in American Politics (Chicago: Chicago University Press, 1993).
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60. C. J. Friedrich, Constitutional Government and Democracy (New York: W. W. Norton, 1941); K. Dowding, Rational Choice and Political Power (Aldershot, Surrey: Edward Elgar, 1991), chap. 4.
61. C. J. Friedrich, Constitutional Government and Democracy (New York: W. W. Norton, 1941); K. Dowding, Rational Choice and Political Power (Aldershot, Surrey: Edward Elgar, 1991), chap. 4.
62. For a full discussion of the methods and variables, see the Appendix to the website version of this article.
63. We followed K. Krippendorff, Content Analysis: An Introduction to Its Methodology (Beverly Hills, Calif.: Sage, 1980), when developing a coding frame and carrying the content analysis. We tested a coding frame to ascertain the details of the bid and some aspects of their contents. We did not follow Turok and Hopkins's method for ascertaining the quality of the bids, as this would have introduced many questions that would have given rise to intercoder unreliability ('Competition and Area Selection in Scotland'). Also the method was not feasible given the number of bids. Instead, we piloted our coding frame using two coders, testing for reliability and dropping questions where the coders could not, after several tries, agree. After five pilots, we reached an acceptable level of intercoder reliability for all of the questions.
64. The sub-indexes add groups of standardized variables. The presentation index adds Dtp, Monspent, Map and Orgdiagm; the participation index is based on Pvparts, Locauth, Tecpart, Volpart and Commune; the political index adds Tmarg92, Porkcab, Porkmin, Porkwhip and Loccon2; the strategic index sums the strategic objectives, SO1, SO2, SO3, SO4, SO5, SO6, SO7 and SO8; and the deprivation index uses Deprive, Meandep, Ethnic, Youth and Women.
65. L. Sigelman and L. Zeng, 'Analysing Censored and Sample-selected Data with Tobit and Heckit Models', Political Analysis 8 (1999), 167-82.
66. Two regional dummies turned out to be significant when we were constructing the 'first cut' model of Table 1. For completeness these variables are included in the reported model. However, dropping these variables makes no substantive difference to the model; and adding all bar one of the dummies only affects the 95 per cent confidence interval of one variable, Round 4, which does not appear in later models. We conclude that our starting point for the regional models is not dependent on the inclusion of regional dummies.
67. We considered going further, using the same basic method to estimate models for each region/round. However, it eventually became apparent that, as the number of bids dropped off round-by-round in some regions, achieving plausible models with stable coefficients would be difficult in many regions.
68. W. H. Greene, Econometric Analysis, 3rd edn (Upper Saddle River, N.J.: Prentice Hall, 1997).
69. W. H. Greene, LIMDEP Version 7.0 User's Manual (Plainview, N.Y.: Econometric Software Inc., 1998), pp. 674-5.
70. Greene, Econometric Analysis, p. 505.
71. StataCorp, Stata Statistical Software: Release 6.0 (College Station, Tex.: Stata Corporation, 1999).
72. The regional dummies Norwest and Soueast and a dummy for Round 4, Round4, were significant. Returning to the points we made about modelling choices above, it would not have been a satisfactory way of estimating a model with dummies and interactions for regional and round effects just to work on the basis of these variables, for this would have been to assume away the possibility of many such effects before actually testing for them. The method and specification of all the variables is set out in the Appendix to the website version of this article.
73. It makes no substantive difference to this model if Avindx is dropped, although Round4 ceases to be significant. We retained Avindx in Table 1 to make a substantive point about competition.
74. We use the form of words 'was willing to pay' advisedly. Where there is no market economists often use proxies to place monetary values. For instance, revealed willingness to pay for environmental quality can be estimated from how much difference this makes to house prices, other things being equal. Our regressions can be used in the same way to put a price on bid quality by considering the coefficients of quality variables. Because Tobit coefficients reflect both the contribution of a variable to success and how much a bid gets, conditional on success, care needs to be exercised. Using a methodology described in Ward and John, 'A Game-Theoretic Model of Competitive Bidding', we estimated that at mean values of other significant variables the funding agency was willing to pay £56,138 for each unit increase in Index, for bids that were successful. As we saw in Figure 1, bid quality increased from Round 1 to Round 4. Assuming that all of this increase was due to competition and that bids would have stayed at the same average quality level as Round 1 in its absence, using our estimate of the unit-value of Index we calculated that quality improvements over the four rounds were worth around £42.22m, which is roughly 1.21 per cent of the overall programme budget over four rounds. Relatively modest transaction costs of the order of £40,000 per bid would wipe out these gains, which is less than some estimates. For example, N. Oatley, 'Competitive Urban Policy and the Regeneration Game', Town Planning Review, 66, 1-14, p. 5, calculates £114,080 as the average cost for preparing each city challenge bid. While figures derived from contingent valuation exercises need to be viewed sceptically, we believe that the evidence points strongly towards the conclusion that the SRB process made at best a very modest contribution to social efficiency.
75. The temptation was to code any bid that made no explicit claims about training as zero on these variables, but it was often clear from the context of the bid document that employment and/or training was part of the bid. Hence we did not take this tack.
76. It is not the case that these variables appear significant because they are tiebreakers between variables: bidders placed different choices in front of the decision makers, and a significant variable indicates that its appearance in the document acted as a signal, though of course both successful and unsuccessful bids often adhered to a range of objectives. Thus successful bids had on average 4.4 strategic objectives, while the unsuccessful had 3.5.
77. Ward and John, 'Targeting Benefits for Electoral Gain'; P. John and H. Ward, 'Political Manipulation in a Unitary State: Central Government Targeting of Public Funds to English Subnational Governments, in Space and Across Time', British Journal of Politics and International Relations, 3 (2001), 308-39.
78. Ward and John, 'Targeting Benefits for Electoral Gain'; P. John and H. Ward, 'Political Manipulation in a Unitary State: Central Government Targeting of Public Funds to English Subnational Governments, in Space and Across Time', British Journal of Politics and International Relations, 3 (2001), 308-39.
79. Taking the total number of bidders together (n = 1,196), 1,104 contained objective 1, 832 objective 2, 620 objective 3, 457 objective 4, 436 objective 5, 609 objective 6, 720 objective 7 and 194 objective 8.
80. We coded many other variables not discussed here. For the full account, see the codebook for our dataset logged in the Essex University ESRC data archive: http://www.data-archive.ac.uk/.
81. This was the measure of A. Brennan, J. Rhodes and P. Tyler, The Distribution of Single Regeneration Budget Challenge Fund Expenditure in Relation to Local Area Needs in England (Cambridge: University of Cambridge, 1998); A. Brennan, J. Rhodes and P. Tyler, 'The Distribution of Single Regeneration Budget Challenge Fund Expenditure in Relation to Local Area Needs in England', Urban Studies, 36 (1999), 2069-84.
82. This was the measure of A. Brennan, J. Rhodes and P. Tyler, The Distribution of Single Regeneration Budget Challenge Fund Expenditure in Relation to Local Area Needs in England (Cambridge: University of Cambridge, 1998); A. Brennan, J. Rhodes and P. Tyler, 'The Distribution of Single Regeneration Budget Challenge Fund Expenditure in Relation to Local Area Needs in England', Urban Studies, 36 (1999), 2069-84.
83. Following the procedure described in Ward and John, 'Targeting Benefits', based on a constrained optimization model in which government allocates resources so as to maximize the number of constituencies it wins. An alternative approach assumes that governments seek to maximize the sum of the vote cast for them across areas - see A. Dixit and J. Londregan, 'Ideology, Tactics and Efficiency in Redistributive Politics', Quarterly Journal of Economics. 113 (1998), 497-529. This model is appropriate if votes from different areas are first summed and then this sum decides the national level result, as is approximately true in a US presidential election. It is not appropriate in the British context: allocating money away from marginals towards seats you are unlikely to win anyway might well increase your national vote share but decrease the number of seats you win.