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This paper examines initiatives in participatory budgeting (PB) in a city in the UK, a country which is a slow adopter of PB. While there are UK initiatives on PB, these are developmental. Nevertheless, this study underlines the potential of participatory budgeting in an Anglo Saxon context. The finance of local government and cities is notoriously opaque. PB has the potential to enhance both democratic accountability and effective city management through transparency. This study reveals a city which is profitably engaged with democratising its budgetary activities and seeking to achieve greater transparency for its citizens and managers through the modernisation of established practice.

We analyse the determinants of local government efficiency taking into account the presence of spatial interactions among neighbouring municipalities. To do so, first we estimate an efficiency index using the robust order-m methodology in Valencian municipalities (Spain). Second, we examine the socio-economic, political and budgetary factors that might influence efficiency levels. Finally, we analyse the spatial interactions present in our data. The results of estimating a spatial autoregressive model show that government efficiency in neighbouring municipalities positively affects the local government's own efficiency. This highlights the importance of considering spatial dependence structures in studies on efficiency in the public sector.

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