Identifying and Coping with Fiscal Emergencies in Ohio Local Governments

Abstract

This study examines the reasons fiscal emergencies occur in Ohio local governments and the strategies that local governments use to recover. In Ohio, fiscal emergencies have regularly occurred predominantly at the local level. This study aims to reveal the internal process that both bring on and ameliorates fiscal emergencies. Previous studies failed to differentiate between fiscal stress and fiscal emergencies and did not include the role of the Ohio Fiscal Emergency Law in assisting local governments in restoring long term fiscal health. This study finds fiscal emergencies in Ohio were caused by: (1) the increased costs associated with unfunded state-mandated programs and, (2) major economical downturns brought on by local plant closings. Local governments were found to have responded in the short run by strategies such as targeted expenditure cuts and in the long run by increased the use of economic development.     

Strengthening local political leadership through institutional design: how and why

ABSTRACT

Over recent decades, the institutions of political leadership have been criticised for being caught up in outdated designs that are not adapting to societal changes. In many western countries, this diagnosis has spurred design reforms aimed at strengthening political leadership at the local level. Based on a study of reforms in Norwegian and Danish municipalities, this article first develops a typology of reforms aimed at strengthening local political leadership. Leadership reforms are categorised into four types aimed at strengthening Executive, Collective, Collaborative, or Distributive political leadership. The typology is used to map the prevalence of the different types of reforms in the two countries. The results show that design reforms as such are more widespread in Danish than in Norwegian municipalities. In particular, reforms aimed at strengthening Distributive political leadership are used more extensively in Denmark than in Norway. The article discusses the contextual differences that may explain this variation.     

Public Enterprise Reforms and Financial Performance of Government Commercial Companies of Fiji

Public enterprise reform is no new phenomenon. Since the late 1970s, state intervention in the market has been increasingly challenged, acquiring a more ideological form with the rise of ultra-conservative governments in the UK and USA. Like other countries across the world, Fiji has also attempted to reform its public enterprises. This article compares the performance of corporatized public enterprises that sit at different levels of financial performance. Such enterprises have experienced reforms but with mixed financial outcomes. Overall, the major finding of this research is that there is no single factor that can lead to better or poor financial performance.     

Managing Local Intergovernmental Revenues: The Imperative of Diversification

Abstract

Municipal governments have employed a variety of strategies to address their ongoing revenue crises throughout the past several decades. One such strategy that has been employed with great consistency is the use of intergovernmental revenues (IGR). Given this trend, coupled with the fact that we know little about the dynamics of IGR, this paper presents one of the first multi‐year examinations of its use at the local level. Using data from 76 villages and cities in Cook County, IL (greater Chicago) for 1996–2000, we examine IGR use from the perspective of revenue diversification. The analysis indicates that during this period, local governments in Cook County (1) diversified their own‐source revenues and decreased dependence on the property tax; (2) maintained a consistent dependence on IGR; and (3) diversified and significantly altered their IGR structures. We also examine the demographic and organizational correlates of IGR diversification, and find it to be unrelated to characteristics such as population, property tax base, professional administration, and organizational capacity. As a result, we conclude that IGR diversification is a strategy that ought to be considered by all municipalities regardless of size or structure.     

Internal or External Production and Satisfaction with the Chosen Sourcing in Danish Municipalities: Different Theoretical Explanations

Abstract

There is a large literature on both why local governments and public organisations choose internal or external production of services and what explains the performance of internal and external production. A range of different theories have been used to answer these questions. However, these studies show mixed results. In this study we investigate four theories: transaction cost economics, neoclassical economics, the resource-based view of strategy and institutional theory. Can these theories explain whether local governments choose internal or external production and can they explain the satisfaction with the internal and external production? Do the same variables explain the choice and the satisfaction? Based on a survey of four different service areas in Danish municipalities, it is shown that different theoretical variables explain the choice and satisfaction with the sourcing mode. Internal expertise is strongly related to the choice of internal or external production, whereas most transaction cost variables are unrelated to this choice. However, other variables such as supplier expertise and technological uncertainty are related to satisfaction with service production. The results corroborate the view that different variables are needed for explaining the performance of suppliers and the choice between internal and external suppliers. Furthermore, the results suggest that the study of local governments' sourcing may benefit from integrating theories focusing on internal expertise and markets. Studies may also benefit from integrating economic theories, which assume rationality, with institutional theory emphasising more unreflective and socially determined behaviour.     

Local governance under the Conservatives: super-austerity,devolution and the ‘smarter state’

Through their ambitious devolution programme, the Conservatives show a new assertiveness in relation to restructuring the local state, in contrast to the laissez-faire approach of the previous Coalition government. Although the Coalition piloted devolution, its signature policies of ‘localism’ and the ‘Big Society’ focused on non-state actors, providing rights and opportunities for communities to challenge local government and establish their own services. The Conservatives are promoting devolution as a strategy to stimulate economic growth based on greater sub-regional autonomy and increased competitiveness across and between English localities. ‘Combined authorities’ have the opportunity to champion local identities and acquire new economic development powers from Whitehall. But devolution could be a strategy to decentralise austerity, shifting responsibility to the local level for deeper cuts (56% by 2020) and inevitable service reductions. Local government confronts ‘super-austerity’, where new cuts come on top of previous ones, compounding original impacts and creating dangerous (and unevenly spread) multiplier effects. The Conservatives’ ‘smarter state’ policies, aimed at delivering ‘more for less’, amount to little more than a recycling of new public management diktats. The emerging patchwork of ‘devolution deals’ challenges the redistributive assumptions of the grant regime and could leave disadvantaged areas at particular risk of failure. ‘Metro mayors’ are intended to provide visible and accountable leadership; but roles for locally elected councillors, and prospects for community and citizen engagement, remain unclear. The public has yet to be adequately engaged in what is in danger of becoming a technocratic transfer of power.