Violent Crime and Capital Market Punishment: How Violent Crime Affects the Supply of Debt to Municipal Mexico

Research shows that violent and organized crime reduces foreign direct investment and that armed conflict lowers sovereign credit ratings. Building on these insights, I argue that violent crime reduces financial institutions’ confidence in the capacity of governments to repay loans, raising the costs attached to loans, and reducing government debt through a “supply-side” logic. Yet, this logic is difficult to test. Governments can render lenders indifferent to violent crime by accepting higher borrowing costs, resulting in no observed relationship between them. It is for this reason that analysis of the effect of violent crime on government credit ratings alone cannot tell us much about its effect on actual government debt. In this study, I explain how analysis of subnational debt from welfare-minded public banks and profit-minded private lenders can distinguish the supply-side logic from the null hypothesis. Cross-sectional time-series analysis of homicide rates and municipal debt in Mexico demonstrates support for the supply-side logic. Evidence of the supply-side logic reveals that those governments most in need of cost-efficient financing are most likely to be charged higher prices for it or priced out of capital markets altogether, signaling the need for market intervention in these cases.     

Recovery Risk and Labor Costs in Public–Private Partnerships: Contractual Choice in the US Water Industry

We use an ordered logistic model to empirically examine the factors that explain varying degrees of private involvement in the US water sector through public–private partnerships. Our estimates suggest that a variety of factors help explain greater private participation in this sector. We find that the risk to private participants regarding cost recovery is an important driver of private participation. The relative cost of labour is also a key factor in determining the degree of private involvement in the contract choice. When public wages are high relative to private wages, private participation is viewed as a source of cost savings. We thus find two main drivers of greater private involvement: one encouraging private participation by reducing risk, and another encouraging government to seek out private participation in lowering costs.     

Adoption of comprehensive risk management in local government

In the aftermath of large company failures in the early 2000s, there emerged a new wave of efforts to enhance risk management (RM) and control in enterprises. The normative RM model has been promoted widely to all organisations, including public sector organisations. Using survey data, this article describes and explains the diffusion and adoption of RM innovation in local government in Finland. Our survey results support the argument that if comprehensive RM is not obligatory, it is not widely used in local government. Our analysis reveals that financial constraints explain to some extent the existence of comprehensive RM in municipalities, while structural factors such as the size of municipalities do not, even though RM is slightly more advanced in larger rather than smaller local governments. Slow adoption indicates that comprehensive RM as a managerial innovation lacks immediate benefit when assessed against the efforts and costs of its introduction and maintenance.     

Hardening Budget Constraints: A Cross-National Study of Fiscal Sustainability and Subnational Debt

This study explores the financial sustainability of subnational governments in four different countries. Scholars argue that subnational fiscal capacity helps local governments deliver better public services and provide public goods, which in turn helps to promote economic growth. While administrative control by the central governments contributes to reducing moral hazard from the soft budget constraints, bottom-up strategies to manage fiscal profligacy also need attention. The study first provides understanding about the characteristics of central-local governance and management of subnational government debt of each country. Then, we test our hypotheses regarding local fiscal capacity and administrative control, including political-economic factors that may affect debt spending by local governments. Our findings show that subnational fiscal sustainability improves when the central governments have clear rules to intergovernmental transfers in place and more (market) liberal policies, meanwhile when subnational governments have a more fiscal capacity and less intergovernmental transfers they are able to manage their debt more soundly.     

Local Government Public Servants Performance and Citizens Participation in Governance in Nigeria

Abstract

This paper examines the performance of public administrators at the local government level in Nigeria. It traces the development of local governments in Nigeria from 1945 to present times. It argues that the shift in the critical decision‐making powers and functions of local government requires its public administrators to be better‐trained professionals. However, without citizens' participation in governance, public servants' accountability will be low. The study addresses the following questions: How do public sector performance and development of actions by citizens affect accountability in the local governments? How much training do public administrators in Nigeria's local governments have in public management? What is the relationship between performance and citizenship participation in local governments' development process? The question of interests in this study is how public administration at the local government level can better serve Nigeria's communities and in so doing develop authentic relationship with citizen groups, and equitably enhance public trust, legitimacy, and performance of the public sector in the nation.     

Public Sector Risk Financing: Exploring the Potential Use of Weather Derivatives by Fire and Rescue Services

The floods of 2007, experienced across much of England, resulted in local authority organisations, including Fire and Rescue Services, mounting large-scale responses and incurring additional and unexpected expenditure. Although central government activated funding schemes, some local authorities fell below the thresholds set and had to absorb the additional costs. This raised a question of what alternative methods were available to allow these local authority organisations to finance such unexpected costs. Weather derivatives are widely used in certain sectors to manage the financial risk that arises from undesirable weather conditions and the objective of this research is to explore the reactions of an FRS towards the use of these financial instruments in managing additional costs, such as those arising from the 2007 floods. Our findings suggest that a combination of risk-aversion, lack of specific financial knowledge and comfort with the status quo seem set to stifle development of weather derivatives as an innovation in public sector risk financing. However, this exploratory study suggests that the method has some merit and is at least worthy of further examination.     

Managing the Public Sector in Hong Kong: Trends and Adjustments

Public sector management in Hong Kong was initially designed to rule the territory as a British colony. A number of changes took place in the last quarter century before Hong Kong's reintegration with China and the nature of public sector management has transformed over this period. An overview of administrative principles and practices and an analysis of changes reveal trends that were influenced by both local and international factors. The framework of traditional public administration in the territory adapted effectively to embrace the principles of new public management without much difficulty. The global economic crisis compelled the government to revise its strategies to expand public spending and adopt a further reduced role in the provision of public services. New social, economic and political challenges are driving Hong Kong to adjust to the changing circumstances and trends, and four noticeable shifts can be identified. They include shifts from an administrative to a political executive, from job cuts to job creation, from financial restraint to increased spending, and from public to private sector provision of public services. The trends are driven by local and international forces as well as the progress of democratization and political awareness in Hong Kong.     

Do Electoral Risks Moderate the Effect of Partisan and Electoral Cycles on Debt-Financed Local Spending?

Governments’ use of debt as a political instrument has been widely studied from the perspective of partisan and electoral cycles, mainly concerning central government. On the whole, previous studies have attempted to determine the effects of political ideology and the proximity of elections on the opportunistic use of public spending. The current study aims to broaden the scope of attention to the effect of partisan and electoral cycles on debt, by means of a broader consideration of the motives that lead politicians to take on a deficit and that are usually linked to the associated electoral risk. More particularly, we examine whether, during the electoral period, greater confidence in re-election can modify party behaviour concerning the use of public spending, and if so, whether the change is greater or smaller depending on the ruling party’s ideology. The results obtained show that local administrations need to incur debt, although politicians take on more liability than is appropriate to their demographic and economic characteristics, especially in an election year. It was also found that political stability favours a reduction in the public deficit, a pattern that is maintained in electoral periods. This effect was found to be independent of the partisan cycle.     

Industrial engineering in local government: An avenue to greater efficiency remains uncongested

Despite persistent concern about the efficiency of local government operations, very few municipalities or counties have chosen to hire industrial engineers to assist in prescribing and implementing technological or other operational improvements. During the early part of this century the emerging fields of industrial engineering and public administration briefly shared a common path of development, but Progressive Era zeal for systematic analysis of tasks and work environment proved to be more widespread and lasting in industry than in the public sector.

Nevertheless, some cities and counties today exhibit a rekindled interest in systematic analysis and a willingness to adapt analytic techniques derived from industrial engineering for helping solve local government operational problems. Those jurisdictions that do employ industrial engineers and apply various analytic techniques associated with that field often have reported impressive results.     

From Brigade to Service: An Examination of the Role of Fire and Rescue Services in Modern Local Government

Over the last ten years, local government modernisation and the growth of community safety agendas have called for change in the public sector at a local level. This has been typified by partnership work, improvement and inspection and community governance. The fire and rescue services, despite some initial cultural difficulties, haveworked hard to adapt themselves to modern local government, for example through community fire safety work, which is presented as a case study. However, the culmination of the modernisation project, Comprehensive Area Assessment, does not favour the fire and rescue service, and to an extent excludes them from its formula. In this light, it seems that there is little incentive for the Fire Service to continue its modernising trajectory.     

PUBLIC SECTOR PAY BARGAINING: COMPARABILITY, DECENTRALIZATION AND CONTROL

Public sector pay, as a key component of public expenditure, has been a major issue for government since the mid-1970s. This article analyses public services pay bargaining since 1979 and examines the continuing tension between the control of public sector pay levels on the one hand and the wish to make pay levels more responsive to external market forces on the other.
The article concentrates on the changes in pay bargaining in the public services. It does not purport to provide a detailed economic analysis of the outcomes of the various phases in public sector pay policy, but does attempt to explain the process implications of the political contingencies and rationale driving government policy on pay determination. In particular it notes the resilience of national pay-setting arrangements and pay comparability throughout most of the period under review, despite the political rhetoric, emphasizing the pragmatism of government policy. The latter section of the article reviews the current policy, with its emphasis on decentralized pay determination, and considers these new developments within the context of private sector collective bargaining theory.
The evidence from the private sector suggests that pay determination in the private sector is complex and that levels of bargaining relate to various factors. Decentralization is neither a panacea for poor performance nor necessarily problem free. Devolved pay determination can lead to problems of control over costs and, in the context of high levels of trade union organization, to pay'leapfrogging'. The article concludes that there is a continuing contradiction between the role of the government as an employer, keen to devolve pay decisions to local level, and that of economic regulator with responsibility for the wider economy. This continuing tension indicates that decentralized pay bargaining in the public sector will be limited in its scope by some form of central government control.     

TRADITIONS OF LOCAL GOVERNMENT

This article explores local government traditions in the UK. This task is an important one for scholars who wish to understand and appreciate the rich cultural complexity of local government organizations. In local government settings, traditions can be used in the study and evaluation of political and managerial practices. They provide lenses through which the routines, structures and processes of management and politics may be viewed. The delineation of multiple traditions heightens the sense that local government is not a unified homogeneous organizational entity, but rather a melange of voices, interests and assumptions about how to organize, prioritize and mobilize action. They can be used to engage practitioners with the idea that different traditions inform political and managerial practices and processes in local councils. The approach embraces the significance of participants' constitutive stories about local government rather than the search for essential truths about the politics and management of the public sector.     

Public Services, Quangos And Women: A Concern For Local Government

The past eighteen years have witnessed a shift in the locus of much public sector service provision from elected and heavily regulated local government to the more opaque, appointed sector of quasi-autonomous non-governmental organizations (QUANGOs). This shift has been the basis of much debate about the nature of democratic accountability and whether the users of public services are empowered by such decentralization. What has yet to be considered is how the displacement of local authority representation and service delivery may affect different groups of service users. This article is concerned with such issues in relation to women as consumers of public services who, from genuine political as well as expedient motivations, have been relatively well represented by local authorities. The concern here is that as decision making moves away from public view, the need to be seen to accommodate difference is lost, and representative diversity will suffer.     

State approaches to debt capacity assessment: a further evaluation

The simultaneous effects of an aging infrastructure, the retreat of the federal government from assisting state and local governments finance capital acquisitions, and an expansion of the public's perception of what constitutes legitimate public infrastructure and capital investments has created a need for different approaches to financing state and local government debt capital needs. This has led t o an increasing use of debt financing to meet growing capital and/or infrastructure needs. This paper reviews the concept of a debt capacity index measure for state governments. Results of a survey of state debt capacity methodologies are reported. The results of the survey are then incorporated into a statistical model for calculating the debt capacity of one state. The results of this analyses are reported and discussed for this one state issuer.     

Managing Middle Earth: The Evolving Role of Local Authority Chief Executive Officers in Auckland,New Zealand

New Zealand is often seen as a ‘test-bed’ for public sector management reform. Indeed, much has been written about the machinery and operation of central government, yet little attention has been paid to the actors and institutions of local government. This article, using evidence obtained through a series of semi-structured interviews with serving and former Chief Executive Officers (CEOs) in the Auckland region, examines the impact upon local authority chief executives of two major reforms within local government. Firstly, the impact of sweeping managerial reforms in 1989, and then secondly reforms to reinvigorate and reinvent the scope and scale of local authorities in the period since 2002. The article argues that whilst local government CEOs in New Zealand are managerially strong, these skills need to be refocused to ensure maximum benefit for local government can be gained from post-2002 reforms.     

An empirical survey of frontier efficiency measurement techniques in local government

Local government in advanced economies is undergoing a period of rapid reform aimed at enhancing its efficiency and effectiveness. Accordingly, the definition, measurement and improvement of organisational performance is crucial. Despite the importance of efficiency measurement in local government it is only relatively recently that econometric and mathematical frontier techniques have been applied to local public services. This paper attempts to provide a synoptic survey of the comparatively few empirical analyses of efficiency measurement in local government. We examine both the measurement of inefficiency in local public services and the determinants of local public sector efficiency. The implications of efficiency measurement for practitioners in local government are examined by way of conclusion.     

Decentralisation and government provision of public goods: The public health sector in Uganda

While many developing countries have devolved health care responsibilities to local governments in recent years, no study has examined whether decentralisation actually leads to greater health sector allocative efficiency. This paper approaches this question by modeling local government budgeting decisions under decentralisation. The model leads to conclusions not all favourable to decentralisation and produces several testable hypotheses concerning local government spending choices. For a brief empirical test of the model we look at data from Uganda. The data are of a type seldom available to researchers–actual local government budgets for the health sector in a developing country. The health budgets are disaggregated into specific types of activities based on a subjective characterisation of each activity's ‘publicness’. The empirical results provide preliminary evidence that local government health planners are allocating declining proportions of their budgets to public goods activities.     

ENTREPRENEURIAL LEADERSHIP IN THE ENGLISH PUBLIC SECTOR: PARADOX OR POSSIBILITY?

Our study explores the possibility for the enactment of entrepreneurial leadership in the English public sector under the Labour government’s modernization agenda. To substantiate our analysis, we draw upon data gathered from leaders in three public sector arenas – the National Health Service, secondary schools, and further education (FE) colleges. Our study proposes a definition of public sector entrepreneurship that extends beyond existing literature. In essence, we contend that public sector entrepreneurship is characterized by the combination of three distinct agencies: ‘stakeholder’, ‘entrepreneurial’ and ‘political’. The public sector entrepreneur identifies market opportunities within the political landscape, optimizes the performance‐enhancing potential of innovation for the public sector organization, and carries stakeholders in a way that both permits risk and recognizes the stewardship of public sector resources.     

Multiple Voices of Modernization: Some Methodological Implications

This paper systematically examines intra-organizational consensus of perceptions of managerial reform in local government in the UK. The paper questions the role of 'elite surveys' in public sector evaluation research by exploring the extent to which multiple informants agree on the expected impacts of Best Value. Results from a survey of 978 local government officers in 80 local authorities indicate modest levels of consensus. These findings suggest that single respondent surveys are likely to produce unreliable data and misrepresent the impact of public sector policy reforms. Rather than rely on the perceptions of one respondent it is argued that multiple respondent surveys should be employed if rigorous and reliable data are to be used in providing evidence-based policy recommendations for reform in public sector organizations.     

The Impact of the Housing Bubble on the Growth of Municipal Debt: Evidence from Spain

The aim of this paper is to analyse the impact of the recent Spanish housing boom and the subsequent burst on local public finances. Particularly, we investigate the effect of the rise and later fall in revenue from urban development on local government debt. Using a sample of the Spanish largest municipalities in the period 2003–2011, we find that debt was substituted by revenue from urban development during boom years and this substitution effect vanished after the burst of the boom. Our results also reveal that local public finances have worsened after the burst of the housing bubble since now they have larger current spending and smaller savings.