ABSTRACT
Most government expenditure is geographically specific. This is manifest in the vast number of local institutions that arrange the financing, regulation and provision of public services, such as local governments, courts, schools and hospitals, and the natural preference of service users to secure access to public services locally. The major exceptions to this localism are a small number of national public goods, such as defence and international relations, and some (but not all) systems of welfare payments. Yet even these programmes can have important local dimensions, for example in the form of the choice of location for a military airport.
