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This is the second set of lecture notes from courses in public finance published in an archival volume in this series. Volume 19-C (2001) was entirely devoted to notes from lectures by E. R. A. Seligman at Columbia University. Two differences mark Seligman’s lectures and the lectures by Henry C. Simons at Chicago, as reported below. Seligman seems to have been lecturing primarily to students in tax administration, hence he presented very little economic theory; whereas Simons was lecturing to graduate students in economics, and presented relatively more theory. Seligman did not refrain from some passing of judgment but his lectures were largely descriptive and non-judgmental; whereas Simons has no hesitation in presenting his own normative approach on various issues. These issues tended strongly to focus on inequality, tax justice, and progressivity.

In the aftermath of the financial crisis, English local government faced a period of significant budget reduction and uncertainty. Austerity measures were effectively rolled out over several budget iterations, resulting in a 37% real-term reduction in core central government funding, equivalent to a 25% reduction in income/spending power (including council tax) between 2010 and 2011 and 2015 and 2016. At the same time, changes in government policy in a range of areas between 2011 and 2012 and 2015 and 2016 created 164 new burdens on local government, with an estimated value of £11.5 billion, many of which were unfunded. All of this during a period when local government was being encouraged to freeze council tax and when natural pressure on locally collected taxation and services was increasing due to the economic recession.

This chapter reviews the responses of four English local governments to the austerity period triggered by the onset of the global financial crisis in 2007. For the English councils the results develop into two main themes. Firstly, there appeared to be a common set of anticipatory and coping capacities employed both in the lead up to the funding cuts from 2010 onwards and in the way councils subsequently dealt with aspects of the crisis. Secondly, despite this commonality, the specific and local contexts experienced by each council, both internally and externally, determined their overall path to dealing with austerity. These two paths were self-regulation and constrained adaption.

To lay the ground for a future diversification of academic finance in line with on-going sustainability issues.

We situate academic finance within the broader spectrum of social sciences and highlight its ontological, epistemological and methodological assumptions. This brings out the limitations of paradigmatic unity in finance and the ideological aspects of academic finance, and allows us to characterise diversification in finance with reference to the nested epistemological structure of scientific discourse.

We define the diversification of academic finance as a process by which (i) finance research is extended to other existing paradigms in social sciences; (ii) new research metaphors are developed within the current paradigm and (iii) puzzle-solving robustness is achieved. We develop a new research agenda which are divided down into themes, paradigmatic hypotheses, and research questions.

We do not test any particular implications of our research agenda.

This chapter will be a useful reference for any researcher or practitioner seeking to contribute to the diversification of academic finance, and make finance work for society.

This chapter looks at academic finance from an interdisciplinary angle in order to bring out its limitations and carve out an innovative research agenda.