Disparities in the Spending Needs of Highland Municipalities

A certain rough consensus holds that highland municipalities have higher spending needs than others, because of the particularly adverse conditions in which they provide essential public services. However, there is no empirical evidence to support this assertion. This study examines whether any relevant differences actually exist in the spending policies of highland and lowland municipalities. To this end, we make logarithmic estimations of per capita municipal spending in order to determine whether the indicators selected, which are based on local government powers, adequately reflect spending needs. Our results point to the special circumstances of highland districts as a key explanatory factor for higher municipal spending, along with demographic factors, locational population patterns, economic activity, subsidies, and local fiscal capacity.     

When Do Municipal Consolidations Reduce Government Expenditures? Evidence on the Role of Local Involvement

Higher levels of government motivate municipal consolidations as a tool to increase efficiency in the local government sector, yet research shows that consolidations typically fail to deliver the promised spending reductions. Since mergers often require significant changes to institutional structures, one explanation is that local decision makers can substantially influence the outcomes of the consolidation process. To explore this possibility, this article contrasts “encouraged but voluntary” mergers with those that were “forced” on local governments in the state of New South Wales, Australia. Results show that voluntary mergers resulted in a 10 percent decline in total per capita expenditures, but forced consolidations failed to reduce spending across the board. The policy conclusion is that decision makers considering structural reform should invest in obtaining the support and participation of local government decision makers.     

Explaining Interest Rates in Local Government Borrowing

ABSTRACT

This article analyzes the usefulness of municipal accounting information in the interest rates agreed on by financial institutions in the European context. Most of the literature has focused on municipal bonds, mainly in the United States. Our core contribution is to study which factors determine the interest rates on bank loans to municipalities. This framework is different, since there is neither a secondary bond market nor credit ratings, and therefore information asymmetry is higher. Specifically, we investigate if municipal financial indicators and financial reports’ quality have an influence on interest rates paid by Spanish municipalities in the period 2001–2008. Our empirical results indicate that, in general, the municipal financial situation exerts an influence on the credit policy of lenders, who charge a risk premium to those municipalities with less current surplus, which is an indicator of the municipality's saving ability. Furthermore, there is also some inertia in the municipal annual interest rate (year t ? 1 interest determines around 27% of year t interest). Other findings indicate that high levels of expenditures and debt per capita increase the interest cost of municipal borrowing. Finally, municipalities that disclose full detailed financial reports pay less interest because information asymmetry and transaction costs are lower.     

School Finance Reform's Impact on New Jersey's State Spending Priorities

The combination of school finance reform, voter opposition to higher taxes, and rising costs forced the state of New Jersey to reorient its spending priorities. This article presents an analysis of budgetary data for the period FY 1990 to FY 1996, which clearly indicates that: 1) state resources were shifted from direct state services to state aid; 2) even though the 1991 sales and income tax hikes were revoked, the state's tax structure was more progressive in 1996 than in 1990; 3) Governor Florio's attempts to level down per pupil expenditures by reducing payments to wealthy school districts were largely stymied; 4) the proportion of state resources allocated to public education was lower in FY 1996 than the year preceding school finance reform; 5) because of education's reduced budget share, efforts to level up per pupil expenditures were severely circumscribed; and 6) state aid was diverted from homestead rebates to municipal aid.     

Urban Armageddon or Politics as Usual? The Case of Municipal Civil Service Reform

For the better part of the twentieth century, the question of municipal reformism has drawn urban scholarship: Why do some cities change their governing arrangements while others do not? Focusing exclusively on merit systems, in this study I expose the political underpinnings of merit reform in American municipal history. A duration analysis of merit adoptions in a sample of 252 cities in the 1900–1940 period suggests that both state‐ (home rule status, state merit systems) and city‐specific (at‐large elections, term length, city size, percent foreign‐born, regional location) factors largely determined when and where reform occurred.     

An investigative research on the status of urban residents' psychological security

The objective of this study was to investigate the status of the psychological security of 224 urban residents by using a self‐made questionnaire. The results show that the overall psychological security of urban residents is in the medium–low level. There are significant differences among residents with education background or with household per capita monthly income (F = 4.192, F = 4.545, p < 0.05). People with high psychological security scores are highly educated or come from families with high per capita monthly income. In regards to the factors of common sense of security, the results show significant differences (F = 4.98, p < 0.01) among people with different educational background and people with bachelor's degrees or above scores higher than less‐educated people (from high school or community college). In regards to the factors of certainty feeling, there are significant variations among people with genders and economic background (F = 11.28, F = 7.75, p < 0.01), males higher than females, while people with per capita monthly income of more than 2000 RMB feel more certainty than those with less than 2000 RMB. On the sense of calmness, factors such as education and family per capita income significantly affected scores (F = 4.67, p < 0.05, F = 5.20, p < 0.01). People with high school degree feel less calm than those with college degree or above; individuals with per capita monthly income of 2000 RMB feel less calm than those with income higher than 2000 RMB of above. For another dimension, the sense of relaxation, there is a significant difference among different age groups (F = 8.92, p < 0.001, groups below 40 scoring higher than groups over 40). Copyright © 2014 John Wiley & Sons, Ltd.     

Reapportionment and partisan competition: When does reapportionment matter?

This research considers the effects of reapportionment on partisan competition. More precisely, this study develops a set of specifications under which we might expect varying effects of reapportionment on electoral patterns. By considering the history of political competition in the state, the geographic distribution of partisans, the history and methods of previous apportionments, and the political nature of the reapportionment, a set of specific hypotheses regarding the effects can be deduced. The theory is tested by application of it to the state of Oklahoma. Utilizing an interrupted time-series analysis of election results, we conclude that the 1964 reapportionment in Oklahoma had immediate electoral consequences. The 1971 reapportionment had virtually no effect. These findings are consistent with the expectations based on the theory developed in the paper.     

Schoolhouses,courthouses, and statehouses after Serrano

The constitutionality of public school finance systems has been challenged in 43 states in the 25 years since the landmark Serrano decision. Using data on revenues from more than 16,000 school districts over the 1972-1992 period, this article assesses the impact of court-mandated reform on the role of the states in school finance. We find that resources from the state increased while revenues from local districts were roughly unchanged after successful litigation. States also followed a more aggressive redistribution policy in the aftermath of court-mandated reform; after successful litigation, state aid to the poorest districts increased and aid to the wealthiest districts remained unchanged. Finally, we find that reforms that were initiated by the states without judicial prodding were typically ineffective.     

The economics of having children

When populations grow rapidly, per capita incomes rise less rapidly, because investment and technology cannot keep pace. Reduced fertility would reduce the ratio of dependent children to work age adults, increasing possible savings. Maximizing future incomes per capita means having completed families smaller than parents usually desire. In the United States if parents typically had 2.1 surviving children altogether, the net reproduction rate would fall to unity and a zero population growth might be achieved in a.d. 2060 at 345 millions. The political-social-economic problem is that each couple wants more children for itself than all couples collectively want other couples to have. The State may need to encourage fewer births per family through taxes and subsidies.     

Are Voters Equal under Proportional Representation?

We develop and apply a new conceptual framework and measure for evaluating electoral systems, focusing on (in)equality in parliamentary representation. Our main arena of interest is proportional representation with districts, an electoral system employed by more than half of democratic states, and we draw on an almost entirely overlooked fact: Electoral regimes vary substantially within countries, with some voters casting their ballot in semi‐majoritarian districts of few representatives and others in large and proportional ones. This within‐country institutional variation, we contend, affects representational (in)equality. Evaluating equality in parliamentary representation, we demonstrate that districted proportional representation often leads to overrepresentation of voters supporting right‐leaning parties. Utilizing district‐level data from 20 Western parliamentary democracies and complementing our within‐country approach with a cross‐country analysis, we further show that where parliaments are elected by large and small districts, representational inequality among voters is greater compared with countries in which parliament is elected by even‐magnitude districts.     

Does Family‐Friendly Policy Matter? Testing Its Impact on Turnover and Performance

This study investigates the relative effects of four types of family‐friendly policies—child care subsidies, paid leave for family care, telework, and alternative work schedules—on turnover rates and effectiveness in federal agencies. Contemporary social exchange theory predicts that an agency’s average level of satisfaction with a specific family‐friendly policy is negatively associated with turnover in the agency but positively associated with overall performance. This analysis differs from common expectations. Only child care subsidies show a positive, significant influence on reducing turnover. Child care subsidies and alternative work schedules reflect positive and significant influences on agency effectiveness. Ironically, an agency’s average satisfaction with telework arrangements proves to be a significant but negative effect on performance.     

Economic Effects of State‐Level Tax and Expenditure Limitations

As a result of devolution, state governments have taken on greater responsibility for financing and providing public services. Increasingly, states have adopted state‐level tax and expenditure limitations (TELs) to manage the growth and size of state budgets. The adoption of TELs is supported by claims that they have a positive effect on state economies, although such claims lack empirical evidence and have been contested by several scholars. Despite the ongoing debate about validating the actual economic effects of state‐level TELs, there is a lack of empirical assessments of their effects. The empirical results of this article indicate that the presence of state‐level TELs has a negative effect on the level of employment but no effect on the state's personal income per capita. The presence of state‐level TELs has no effect on either the growth of personal income per capita or the growth of employment.     

Insurance Subsidies,the Affordable Care Act,and Financial Stability

This paper measures the effects of subsidies in the Affordable Care Act on adverse financial outcomes using administrative tax data and credit data on financial outcomes. Using a difference-in-differences design with propensity score reweighting, I find that at $100 per capita, ACA premium tax credits and cost-sharing reduction subsidies reduced consumer bankruptcies and severe auto delinquency by 8 percent and 7 percent, respectively, and substantially reduced right-tail delinquent debt and third-party collections. The value of recipients’ risk protection against medical debt payments amounts to approximately 16 to 21 percent of the cash costs of the subsidies, while the subsidies provided substantial indirect transfers to external parties.     

Comments on Hasenfeld and Gidron: “Understanding multi-purpose hybrid voluntary organizations”

The article develops a theoretical framework to analyse the social construction of citizenship at the local level in Bolivia through the Ley de Participación Popular (LPP). It explains how decentralization at the municipal level and the introduction of participatory mechanisms affect the development of civil society in Bolivia. I argue that decentralization at the city level can provide new formal spaces for the development of civil society in relation with the state, which can in turn foster the social construction of a more inclusive citizenship regime. Many factors, however, determine if such potential is exploited. Drawing from the Bolivian experience, the article elaborates on the socio-political conditions necessary for local governance to have a positive impact on citizenship. It shows that the institutional shortcomings of the LPP, an elite-driven reform adopted in a country with a legacy of weak institutions and civil society, posed fundamental limits for social participation at the municipal level to lead to the social construction of an inclusive citizenship regime.     

Unnatural partners: coalescence in Israeli local government

ABSTRACT

A prominent finding in coalition formation literature is that the underlying political rationale at the subnational level largely follows that of the one revealed by the classic literature on national coalitions. The Israeli political system is extremely centralized, with a local government that is highly dependent on its national counterpart. One could expect such a setting to result in local party behaviour that closely resembles the national one. However, as we show, this is far from being the case. We analyze 34 municipal coalitions in the 17 largest Israeli cities. After establishing that Israeli municipal politics fly in the face of classical coalition formation theories, we turn to explain this discrepancy with a qualitative analysis of interviews with 5 formatuers and 8 councillors. We conclude that mayors face low costs of adding surplus coalition partners, while standing to gain from wider legitimacy, weaker opposition, and constrained future competition. At the same time, municipal lists have strong resource- and policy-related incentives to join the coalition while compromise is met with low political costs. The result is an overwhelming predominance of oversized coalitions and partnerships which would be highly improbable at the national arena.     

Much Ado about Nothing? The Size and Credit Quality Implications of Municipal Other Postemployment Benefit Liabilities

This paper presents estimates of the size and scope of other postemployment benefit (OPEB) liabilities among municipal governments. The findings indicate these liabilities vary substantially, ranging from less than a dollar per capita to more than $2,000 per capita. Those liabilities were then incorporated into separate models of credit ratings and borrowing costs. Results suggest OPEB liabilities do not directly affect credit quality, but the interaction between an issuer's fiscal capacity to address its liability does have a notable effect.     

Democratization and the size of government: evidence from the long 19th century

We study the consequences of franchise extension and ballot reform for the size of government in Western Europe between 1820 and 1913. We find that franchise extension exhibits a U-shaped association with revenue per capita and a positive association with spending per capita. Instrumental variables estimates, however, suggest that the U-shaped relationship may be non-causal and our fixed effects estimates point to substantial cross-country heterogeneity. Further, we find that the secret ballot did not matter for tax revenues per capita but might have expanded the size of government relative to GDP.     

Theory and evidence of municipal borrowing in Chile

Although Chilean municipalities are not permitted to borrow, they do so through arrears and leasing contracts. A formal model of municipal indebtedness is estimated, based on a sample of 345 municipalities with yearly data from 2004 to 2007. Variables that are positively and significantly related to borrowing through arrears are: mayors closely tied to the ruling central government coalition; politically diverse municipal councils; years close to elections; and deeper municipal involvement in education. While leasing contracts appear to be insensitive to political factors, they are positively and significantly related to municipal staff managerial skills and municipal revenues per capita.     

The Political Economy of Public Reform Adoption: Patterns in Twenty Indonesian Districts

ABSTRACT

New Public Management (NPM) reforms are often perceived as technical, with little attention to political and institutional factors. Comparing choices in 20 Indonesian districts, we explore which of four political economic factors influence uptake of NPM-based service delivery reforms. We find that democratic political competition laid the groundwork for political alliances, patterns of patronage, and party provision of benefits that condition reform choices. State-led policy entrepreneurship was evident from education agency technocrats. Public sector modernization may have increased orientation towards performance, with education reforms adopted by districts already achieving relatively good sectoral results. Health reforms were more common in districts providing greater opportunities for citizen participation. The complex interactions among the factors argue for working within these realities, rather than seeing them as impediments to be avoided in a drive for reforms. Education technocrats’ dominance, bolstered by central policy priorities, argues for more nuanced mechanisms for meeting national goals to avoid crowding out responsiveness to local citizens.     

Unfunded Mandates and Fiscal Structure: Empirical Evidence from a Synthetic Control Model

An unfunded expenditure mandate occurs when governments are required to provide a good or service by a higher level of government without an accompanying revenue source. There are no empirical studies providing causal evidence on the fiscal influence of intergovernmental mandates. This article examines Florida's 1990 constitutional Amendment 3, which sought to limit unfunded state mandates on municipal and county governments. The synthetic control method, an empirical technique for drawing causal inferences from case studies, estimates the effect of Amendment 3 on state expenditures and total transfers to local governments. The results indicate that state expenditures increased by an annual average of 9.5 percent, while state transfers to all local governments were unaffected. However, the municipalities protected by Amendment 3 saw intergovernmental revenue from the state decrease by 10 percent annually, which suggests that remaining mandates likely targeted special districts, encouraging the fragmentation of local public service delivery.