Local Government Structure and Performance: Lessons from America?

The debate in the UK on the reform of local government structure is poorly informed by empirical evidence. This article bridges part of the empirical gap by drawing upon analyses of structural effects in the USA. Two main dimensions of structure are outlined: fragmentation and concentration, both of which can vary vertically and horizontally. Fourteen structural hypotheses are identified and categorized as technical, competitive and political effects. The empirical evidence from the USA suggests that fragmentation is associated with lower spending and concentration is associated with higher spending. The implications of the evidence for structural reform in the UK are analysed. It is concluded that the creation of a single‐tier system may not lead to greater efficiency, and that the advantages of a two‐tier system have been underestimated.