This paper uses data on local authority garbage collection costs to measure
the spatial impact of the shift from local in-house monopoly provision to
Compulsory Competitive Tendering (CCT). The data shows that before CCT serv
ice costs were correlated across authorities after controlling for their ch
aracteristics. However, following CCT this spatial correlation disappears o
r is significantly attenuated. We associate this change with the way in whi
ch contracts were written before and after CCT. We also show that political
factors were an important factor in determining costs both before and afte
r CCT. (C) 2000 Elsevier Science B.V. All rights reserved.