Local variables are faster in python. They are accessed as offsets from a stack, rather than looked up in a hashmap.
Here is an example showing the use of local variables as a performance optimization.
http://wiki.python.org/moin/PythonSpeed/PerformanceTips#Local_Variables
Using the dis module, we can investigate this behavior. Note LOAD_FAST versus LOAD_DEREF.
>>> import dis
>>> def foo():
... a = 1
... def bar():
... return a
... return bar
...
>>> b = foo()
>>> dis.dis(b)
4 0 LOAD_DEREF 0 (a)
3 RETURN_VALUE
>>> def loc():
... a = 1
... return a
...
>>> dis.dis(loc)
2 0 LOAD_CONST 1 (1)
3 STORE_FAST 0 (a)
3 6 LOAD_FAST 0 (a)
9 RETURN_VALUE