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Charity in the time of austerity: in search of the 'Big Society'

Author

Listed:
  • Stephen Gibbons
  • Christian Hilber
Abstract
The years after the election of the UK's coalition government in 2010 saw a decline in central funding to local government and a fall in expenditure on a range of local services, including social services. These cuts were backed by a theory that individuals in the community would step in with voluntary action (the 'Big Society') to fill the void left by withdrawal of public support, a specific case of the argument that government activity crowds-out that of private individuals. This paper asks to what extent this vision materialised. Using a large panel survey of individuals linked to detailed local government income and spending data for the period from 2008/9 until 2016/7 we estimate the effect of local public services spending and central government funding on individual caring, voluntary and charitable behaviour. We find some evidence of an association between Local Authority (LA) expenditure cuts and increases in voluntary activity and charitable giving in the area. Using central government funding cuts as an exogenous source of variation in LA spending, we find no effects on any aspects of individual caring, voluntary or charitable action. Overall, we find little support for the proposition that (cutting) public sector spending crowds out (increases) individual philanthropic activities.

Suggested Citation

  • Stephen Gibbons & Christian Hilber, 2022. "Charity in the time of austerity: in search of the 'Big Society'," CEP Discussion Papers dp1874, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1874
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    References listed on IDEAS

    as
    1. Andreoni, James & Payne, A. Abigail, 2011. "Is crowding out due entirely to fundraising? Evidence from a panel of charities," Journal of Public Economics, Elsevier, vol. 95(5), pages 334-343.
    2. Nina Boberg‐Fazlić & Paul Sharp, 2017. "Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England Under the Poor Laws," Economic Journal, Royal Economic Society, vol. 127(599), pages 50-83, February.
    3. Kathleen M. Day & Rose Anne Devlin, 1996. "Volunteerism and Crowding Out: Canadian Econometric Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 37-53, February.
    4. Khanna, Jyoti & Sandler, Todd, 2000. "Partners in giving:: The crowding-in effects of UK government grants," European Economic Review, Elsevier, vol. 44(8), pages 1543-1556, August.
    5. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, vol. 93(3), pages 792-812, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    public spending; social care; charitable giving; crowding out hypothesis; Big Society;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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