Pay‐as‐You‐Go Financing and Capital Outlay Volatility: Evidence from the States over Two Recent Economic Cycles

Pay‐as‐you‐go (pay‐go or cash) and pay‐as‐you‐use (pay‐use or debt) are two mechanisms to finance capital projects. While pay‐go faces multiple constraints, pay‐use smoothes outlays, stabilizes tax rates, and improves inter‐generational equity. Thus, pay‐use has dominated infrastructure financing for decades. In recent years, there has been revived academic interest in pay‐go as an alternate financing mechanism; however, there is a large gap in the literature and inadequate evidence on the effects of pay‐go, especially its effects on capital outlay volatility. This paper fills in the niche. Examining state experience over the two recent economic cycles, this paper finds evidence that suggests that pay‐go is associated with lower volatility in capital spending in the long run, but may increase short‐run variability. We recommend that states couple pay‐go in boom years with pay‐use in lean years. In unison, the two mechanisms can reduce aggregate volatility and increase long‐run stability of capital expenditures.     

Capital Budgeting and Management Practices: Smoothing Out Rough Spots in Government Outlays

Public capital budgeting and management literature recommends long‐term capital and fiscal planning practices to prevent large fluctuations in outlays caused by fiscal stresses. This study extends the literature by examining the effects of long‐term capital planning and management practices such as the use of a capital budget, separate impact analyses, and the use of bond financing and dedicated revenue sources on capital spending volatility. The empirical results confirm that several of these practices smooth out state government capital outlays that vary because of socio‐economic and financial factors.     

On‐Bill Financing Programs to Support Low‐Carbon Energy Technologies: An Agent‐Oriented Assessment

On‐bill financing (OBF) schemes have been welcomed as innovative mechanisms for encouraging the adoption of low‐carbon energy technologies. Yet while the potential effects of these schemes have received growing attention, less is known about their actual performance. Departing from New Institutional Economics and insights from Behavioral Economics, this theory‐driven assessment examines the How$mart^® program in Kansas (United States) and the Green Deal in the United Kingdom. The study identifies the mechanisms designed to trigger behavioral change and technology adoption. We focus on market agents, and related market failures and behavioral anomalies that often prevent energy efficiency improvements. The paper adds to our theoretical and empirical understanding of public and utility‐driven OBF programs applied to the residential sector. Our findings suggest that simple, carefully designed on‐bill programs, where the financing of efficient technologies takes the form of a service rather than a loan, are more effective for the diffusion of low‐carbon energy technology and the reduction of transaction costs. At the same time, on bill‐financing schemes challenge the core business of utilities, and given the complexities and dynamics of energy efficiency markets and energy use, other policy interventions are needed.     

SUB‐NATIONAL GOVERNMENT CAPITAL SPENDING IN INDONESIA: LEVEL,STRUCTURE, AND FINANCING

Sub‐national government capital spending is important for both public service delivery and economic development. Currently, Indonesian sub‐national public capital spending appears barely sufficient to cover the annual depreciation of its fixed assets. A substantial proportion of local government investment spending goes to create relatively unproductive assets, such as administrative office buildings. Sub‐national governments finance their capital acquisitions out of gross operating budgets and have thus far not used, to any great extent, either borrowed funds or their significant cash reserves for such purposes. Indonesian sub‐nationals need to spend more on capital than they do now and also need to focus that spending on more useful types of infrastructure. The major constraints to increasing capital spending at the sub‐national level are not related to a dearth of finance, but regulatory rigidities in budget preparation and implementation and, most importantly, a lack of capacity to plan, design and implement investment projects. Copyright © 2010 John Wiley & Sons, Ltd.     

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.     

Post‐ministerial occupation in advanced industrial democracies: Ambition,individual resources and institutional opportunity structures

The post‐office occupation of former cabinet members remains basically unexplored in both single‐case and comparative studies. Is being a minister just a career tout court, or does serving in executive office facilitate movement to other positions? This article sheds new light on this question by advancing the theoretical development and empirical understanding of the various types of post‐ministerial occupation. The analysis takes into account ex‐ministers’ ambition, political capital resources and the institutional opportunity structures that might well affect both ambition and individual resources. Additionally, given that access to executive office is profoundly gendered, the article addresses the central question of whether post‐ministerial occupations similarly present differential patterns for women and men. The empirical results of a cross‐national comparison of 23 advanced industrial democracies show that, for most departing ministers, serving in executive office is indeed a stepping stone to other positions. Post‐office trajectories are not only shaped by ex‐ministers’ political capital resources such as seniority, party office, policy expertise and type of portfolio held while in cabinet, but also by different institutional factors that present country‐specific combinations. Specifically, systemic variables shape the relevance of political capital resources and affect how ambition is constructed and towards which goals. Strong gendered post‐office patterns are not found, although some intriguing gender differences are observed.     

Internal versus External Social Capital and the Success of Community Initiatives: A Case of Self‐Organizing Collaborative Governance in Nepal

Most research examining the relationship between social capital and outcomes focuses on either internal social capital or external social capital. This article examines the impact of both internal and external social capital on the success of self‐organizing community initiatives. A study of community water projects in a developing country, Nepal, shows that communities that enjoy less internal conflict and more external partnerships are more likely to be successful in securing agency funds for their projects. Also, communities face trade‐offs between internal and external social capital. These dimensions of social capital are not perfect substitutes, and communities that maintain a strategic balance between the two maximize gains from a trade‐off. Moreover, such an optimal choice is dependent on the level of internal and external social capital that these communities hold.     

Pay‐for‐Success Development in the United States: Feasible or Failing to Launch?

Social impact bonds, known as pay‐for‐success (PFS) initiatives in the United States, have attracted attention as a novel strategy for financing and providing preventive services to the most vulnerable populations. This article provides an exploratory qualitative analysis of the Preschool PFS Feasibility Pilot grant applications and projects initiated by the U.S. Department of Education to encourage state and local exploration of PFS for implementing high‐quality preschool programs. Drawing on the public administration evidence base that informs PFS design, the authors examine the feasibility pilots’ features and investigate why grant applicants saw PFS as a promising strategy for achieving their preschool program goals. The challenges encountered, lessons learned, and perceived viability of fully executed PFS preschool programs are also discussed. Findings show that few projects are advancing toward formal PFS arrangements, with many struggling to overcome constrained capacities, structural and political barriers, and inherent incentives to minimize risk and loss.     

Responsive regulation in public‐private partnerships: Between deterrence and persuasion

Design‐Build‐Finance‐Maintain‐Operate (DBFMO) contracts are a particular type of public‐private partnership whereby governments transfer the responsibility for the design, construction, financing, maintenance, and operation of a public infrastructure or utility service building to a multi‐headed private consortium through a long‐term performance contract. These arrangements present a typical principal‐agent problem because they incorporate a “carrot and stick” approach in which the agent (consortium) has to fulfill the expectations of the principal (procurer). This article deals with a neglected aspect in the literature related to the actual use of “the sticks or sanctions” in DBFMOs and assesses to what extent and under which conditions contract managers adopt a deterrence‐based enforcement approach or switch to a persuasion‐based approach, specifically when the contract clauses require the use of (automatic) deterrence. An empirical analysis of four DBFMOs in the Netherlands shows that the continuation of service delivery, the need to build trust, and the lack of agreement on output specifications play a role in the willingness of the procurer to apply a more responsive behavior that uses persuasion, even when deterrence should be automatically applied. © 2016 John Wiley & Sons Australia, Ltd     

Politicians,Media Moguls and PayTV: Pay‐TV Policy‐making in Australia 1977‐1995

This article explores the major influences on pay‐TV policy‐making in Australia from the late 1970s, when the issue was first discussed in the context of proposals to establish a domestic communications satellite, up until the introduction of pay‐TV in Australia in 1995, thereby placing current developments in the pay‐TV industry in context. The article argues that among larger broadcasting and telecommunications issues, pay‐TV has never been ‘the main game’. For both Coalition and Labor governments, the expansion of existing free‐to‐air television services in regional Australia and the introduction of competition in telecommunications have been much more important policy priorities than the introduction of pay‐TV. Furthermore, because pay‐TV policy‐making largely took place in this wider policy context, the structure of the broadcasting and telecommunications industries also shaped pay‐TV policy outcomes.     

WHAT ROLE FOR GOVERNMENT? THE PROMOTION OF CIVIL SOCIETY THROUGH FORESTRY‐RELATED CLIMATE CHANGE INTERVENTIONS IN POST‐CONFLICT NEPAL

This study examines rationales behind the choice of local interlocutors by forestry‐related climate change projects in post‐conflict Nepal. In their stated objectives, all projects claim to involve the government, and most project decision makers are in favor of government involvement, yet project resources overwhelmingly favor civil society institutions. Project decision makers' choices are shaped by a combination of donor conditionalities, contextual constraints, and beliefs about which institutional attributes matter and how to address historical marginalization. The projects' empowerment of civil society sidesteps opportunities to strengthen the local government, which is described as weak, disinterested, and lacking legitimacy owing to the absence of elections due to the unsettled post‐conflict situation. Through the choices made and their justifications, projects and donors further marginalize the local government materially and discursively and thereby entrench its perceived deficiencies. We argue that this privileging of civil society may have implications for government legitimacy and post‐conflict reconstruction and call for donors and the intervening institutions they fund to critically and collectively reassess the role of forestry‐related climate change projects in the larger process of post‐conflict reconstruction in Nepal. Copyright © 2014 John Wiley & Sons, Ltd.     

Foundations of Relating: Theory and Evidence on the Formation of Street‐Level Bureaucrats’ Workplace Networks

Despite the importance of peers in forming role expectations, fostering group identity, and facilitating job learning, limited theory and empirical evidence exist on the antecedents of street‐level peer relationships. To address this gap, the authors draw on social capital and social exchange theories to develop hypotheses about the micro‐social foundations of street‐level bureaucrats’ peer selection. The hypotheses are tested using a rich data set from an intraorganizational network of teachers in a large urban school implementing a reform that strongly promoted frontline innovation. Both structural and instrumental considerations, such as seeking peers possessing characteristics and resources valued by the reform, figure prominently in the work relations of street‐level bureaucrats. These results imply that the introduction of improvement initiatives requiring frontline participation, in addition to altering work practices, may also alter social networks within the frontline of an organization in a manner that favors some frontline workers over others.     

E‐participation Opportunities and the Ambiguous Role of Corruption: A Model of Municipal Responsiveness to Sociopolitical Factors

Municipalities ostensibly scale the ladder of e‐participation improvement to gain legitimacy. However, research has not yet addressed how e‐participation initiatives are affected by serious legitimacy concerns such as corruption. One municipal response to corruption is to use e‐participation offerings as a remedial effort to gain citizen trust, but window‐dressing strategies might also be used. In this article, the authors attempt to make sense of this ambiguity by hypothesizing that the effects of perceived corruption on e‐participation offerings depend on the type of e‐participation as well as the level of local social capital and local public accountability demand. Analysis of data from 104 municipal websites in South Africa between 2013 and 2017 reveals support for two moderation mechanisms: (1) a positive remedial response to corruption in the presence of strong social capital and (2) a negative avoidance response to corruption in the presence of high demand for accountability.     

Advancing Public Policy for High‐Growth,Female, and Social Entrepreneurs

Findings from a large and growing body of entrepreneurship research offer insights for public policy and public officials and managers. Entrepreneurship policy is defined as measures undertaken to stimulate entrepreneurship in a region or country. The authors discuss generalizations from empirical research on three types of entrepreneurship activity that are vital for inclusive, sustainable economic growth: high‐growth (stressing economic impact), female (inclusive impact), and social (sustainable impact) entrepreneurship. High‐growth firms make up a small share of all entrepreneurial activity but create the majority of economic growth. Compared to their male counterparts, female entrepreneurs are fewer in number (one‐third of all entrepreneurs) and tend to start ventures with lower financial capital and growth expectations. Social entrepreneurs generally have high levels of education and pursue social objectives, often remedying market failures with innovative solutions. For each entrepreneurship type, the authors provide a definition, empirical generalizations, and implications for public policy.     

Exploring Social Capital: as Concept and Practice in Australian Public Health Policies and Programs

Over the past twenty years interest has grown in the concept of social capital in international and Australian public policy. We explore how social capital is understood as a concept and used in practice for guiding policy development and program delivery in South Australian public health programs. The empirical research compared policy makers’ and practitioners’ understandings of social capital and how theories about social capital and health inequality were translated into practice in three case study projects. It found that there are shifting discourses between social capital and related concepts, including community capacity building, and social inclusion/exclusion. Policy makers reported less use of the concept of social capital in favour of social inclusion/exclusion reflecting changing political and policy environments where terms come into favour and then go out of fashion. In this transition period the two terms are often used interchangeably although there are some conceptual points of difference.     

Who is the new citizen? Towards a genealogy

The essay establishes a theoretical framework and outlines an empirical research toward a genealogy of the citizen. It argues that a genealogy would focus on the conditions of citizenship rather than its content (rights and obligations) and extent (eligibility criteria). It describes class, territory and capital as such conditions and outlines significant episodes in which these conditions created different ideal types of citizen: warrior‐citizen, peasant‐citizen, patrician‐citizen, plebeian‐citizen, artisan‐citizen, bourgeois‐citizen, and worker‐citizen. In each episode a genealogy would focus on the emergence of differential class powers resulting from the ownership of different forms of capital that condition the territorial as well as the legal and moral boundaries of citizenship. The essay defends genealogy as a history of the present by finally discussing how significant contemporary changes in class, territory and capital are creating a new type of citizen yet to be defined.     

THE OPERATIONAL DIMENSIONS OF RESULTS‐BASED FINANCING

As part of a growing focus on the effectiveness of development assistance from the World Bank and other agencies, new efforts are being made to relate development finance more closely to outcomes achieved rather than to inputs used, through the results‐based financing approach. We provide a framework for analyzing the operational dimensions of results‐based financing, including the conditions that suit this approach, and how best to define, measure, and report results. We review some of the early World Bank experience with this approach. Noting that this approach is as yet not fully tested, we suggest evaluative issues for future research while highlighting strengths and challenges in the range of techniques adopted so far. Copyright © 2014 John Wiley & Sons, Ltd.     

Government‐wide Financial Statements and Credit Risk

Now that state governments issue comprehensive annual financial reports in accordance with Statement No. 34 of the Governmental Accounting Standards Board, it is possible to generate a consistent and comprehensive set of government‐wide financial information. We use the information to develop financial ratios to benchmark government financial performance from information beyond the traditional general fund, and test the hypothesis that such information is incorporated into the assessment of credit risk. We provide an empirical analysis of the incorporation of government‐wide financial information into state government credit ratings, which provides a positive empirical test of the theory of certification and demonstrates how information from the government‐wide financial statements is infused into financial markets.     

Government survival in semi‐presidential regimes

As semi‐presidentialism has become increasingly common in European democracies, so have the debates about the consequences of several of its political and institutional features. In particular, in those regimes, cohabitation between presidents and cabinets of different parties and cabinet dismissal powers on the part of presidents are thought to be a source of inter‐branch conflict and government instability. However, so far, most empirical work on government survival has failed to confirm any of these expectations. This article addresses this disjuncture between theory and empirical results by making a twofold contribution. First, it takes into account the internal diversity within semi‐presidentialism, modeling the implications for government survival of different configurations between presidential powers’ of cabinet dismissal, parliament dissolution and cohabitation in European semi‐presidential systems. Second, it reconsiders traditional government survival using the competing risks framework by adding a distinction between two different types of non‐electoral replacement: those where replacements imply a change in the party of the prime minister and those where they do not. Once such an approach is adopted, that presidential powers of parliamentary dissolution and cabinet dismissal indeed emerge as highly relevant for explaining government survival in these regimes.