Local Government Financialisation: a Mixed-Methods and Interdisciplinary Approach

Abstract

This thesis makes a series of conceptual and empirical contributions to our understanding of local government financialisation in Europe, focusing on its nature, drivers, and implications. Adopting an interdisciplinary and mixed-methods approach, it integrates insights from economic geography, political economy, and heterodox economics, using a range of qualitative and quantitative research methods. This approach aims to provide a novel perspective to the existing literature on local government financialisation by developing a comprehensive and critical understanding of the subject. The thesis comprises three self-contained chapters that present original research on three interrelated research questions. The first empirical chapter, based on a systematic literature review and the comparative analysis of official statistics, clarifies definitional issues by exploring what is meant by ‘local government financialisation’. The second empirical chapter examines financialisation as a response to the structural context in which local governments operate. It reveals that economic, financial, and institutional factors shape local government financialisation in a panel of 22 European countries from 2000 to 2019. The third empirical chapter combines a difference-in-differences analysis of data on over 2.2 million commercial properties, insights from 16 semi-structured interviews and email communications with key stakeholders, and freedom of information requests to 12 local and central government bodies. Although the policy has limited success in its own terms — namely, in raising commercial property values — I find that it reflects a broader shift towards market orientation in English local governance. Collectively, these empirical research chapters clarify the forms that local government financialisation takes across European countries and how structural conditions and developments at the national and global scale, largely beyond the control of individual local governments shape its extent and outcomes. The multi-scalar approach challenges the notion of financialisation as a beneficial tool for cash-strapped local governments. When examined in relation to the institutional and economic context in which it takes place, financial, distributional, and democratic concerns arise regarding how local government financialisation may reshape public provision. Ultimately, a deeper understanding of local government financialisation is crucial for preventing and mitigating its negative consequences. This thesis contributes to fostering such an understanding.