Why Do Governments Delegate Authority to Quasi‐Autonomous Agencies? The Case of Independent Administrative Authorities in France

In recent years, there has been a considerable degree of delegation from governments to quasi‐autonomous agencies. Various reasons have been put forward to explain why governments decide to delegate authority in this way. Some reasons are based on a transaction‐cost approach, such as credible commitments. Other reasons are more contextual. For instance, governments may be responding to a process of cross‐national policy transfer. In the literature on delegation some hypotheses have already been tested. Specifically, evidence has been found suggesting that governments create agencies to commit credibly to particular policy choices. However, other hypotheses, particularly ones based on contextual explanations, have proved much more difficult to operationalize. This article aims to help fill this gap. It does so by focusing on the creation of Independent Administrative Authorities in France. Does the qualitative evidence in this particular case corroborate the quantitative studies that have been undertaken elsewhere?     

In-group solidarity or out-group hostility in response to terrorism in France? Evidence from a regression discontinuity design

Conventional wisdom holds that terrorism has a wide-ranging impact on a polity. At the same time, a complementary, yet less extensive body of research discusses the impact of terrorism on the crux of representative democracy, namely its citizens. In contribution to that literature, and to further explore how external shocks affect public opinions, we propose a two-dimensional analytical framework to examine the effects of the November 2015 terrorist events in Paris and Saint Denis. Drawing from extant scholarship, we argue that we can expect both in-group solidarity and out-group hostility to increase in direct response to these events. This study relies on a regression discontinuity design to analyse a representative survey (DREES) that was in the field at the time of the events. Findings are two-fold. First, and perhaps surprisingly, we find no conclusive evidence of increasing out-group hostilities as a direct consequence of the terrorist events. Second, we find a definite strengthening of in-group solidarity indicators following the events. This not only confirms that citizens adjust their opinions in response to environmental stimuli, but also highlights the democratic resilience of citizens, particularly when faced with a collective threat. Altogether, these findings add to our understanding of why and how individual behaviour changes in light of exogenous shocks.     

Now You See It, Now You Don't: The Mysterious Case of the Vanishing Split Bond Rating in States

Bond ratings on state-issued debt provide a signal to credit markets that help them charge an appropriate interest rate, based on the risk of payment default. Though actual default may occur only in extreme circumstances, observed differences in ratings and interest costs across states and time demonstrate that a sound economy, strong financials, and stable policies matter. When data on the factors that presumably affect ratings is public and easily accessible, making sense of differences of opinion between bond rating agencies is difficult. We suggest that such differences—observed as so-called split bond ratings—are often ephemeral. Utilizing a simulation method to uncover the latent credit risk presented by each state, we show that split ratings on state bonds are often due to the fact that presumed category overlap between rating agencies is absent when evaluated on a common latent scale. Most observed state bond rating splits from 1997 through 2006 can be explained by this category mismatch. Our approach has broad implications for pricing state debt, as well as pricing rated debt in other capital market sectors.     

Economic Conditions and State and Local Education Revenue

This article uses information on state and local education spending from 1989–1990 through 2005–2006 to examine the impact of economic conditions on the pattern of real revenue per student. We find that typical economic and other observable education demand determinants are significant in explaining the pattern of real revenue per student before and after the 2001 recession. We also find that there is no economically significant change in how governments responded to economic conditions after the 2001 recession. Finally, our results provide strong evidence that local governments attempted to offset state declines in revenues by increases in local revenues.     

Management Practices and State Bond Ratings

One of the central claims of public administration is that management matters for the performance of public entities. Quantifying the impact of organizational management is thus central to the empirical evaluation of this claim. Utilizing novel features of the Government Performance Project (GPP), we assess the impact of state‐level management practices on the credit quality of US states. The central challenge—that both the GPP data and bond ratings take the form of ordinal grades—suggests a common solution utilizing multiple indicators of a latent construct (management capacity and credit quality) with appropriate measurement models. After describing the characteristics of the measurement approach, we derive management capacity scores from the GPP data and credit quality scores using bond ratings from the three rating agencies. These derived scores then allow us to test linkages between credit quality of the US states and broad aspects of their relative management capacity. On the whole, we show that financial management capacity influences credit quality, while the evidence is less clear that other forms of management capacity matter.     

CHASING SHADOWS? PERFORMANCE MEASUREMENT OF POLICY ADVICE IN NEW ZEALAND GOVERNMENT DEPARTMENTS

Performance measurement is an integral part of the New Zealand model of public management, as it is for many other modern systems of governmental administration. This article examines data on performance indicators for the policy advice function in five government departments, for the years 1992 to 2005, to determine which types of indicators are used, and to gauge the extent to which they offer meaningful information about the quality of policy advice. As part of its managerialist drive in the early 1990s, the government developed conceptual material designed to improve policy advice and management in departments. In general, our findings indicate that these initiatives did not lead over time to the further development of genuinely meaningful measures of the quality of policy advice, and that the indicators that have been used meet narrow managerial rather than broader political needs.