Local Government Policy Evolution in New Zealand: Radical Reform and the Ex Post Emergence of Consensus or Rival Advocacy Coalitions

Between 1984 and 1993 New Zealand reformers followed a top-down strategy designed to minimize the opportunity for resistors to affect the reform process and preclude the ex post emergence of a stable alignment of rival advocacy coalitions. The evolution of the local government policy debate since the implementation of radical reform in 1989 suggests that these strategic goals may be more difficult to achieve than at first thought. The quest to make local government more efficient and democratic by making it more accountable has given way to a 'minimalist-activist' controversy over the comparative institutional advantage of local authorities and the role of trust in their relations with central government that has the potential to contribute to the eclipse of the post-reform consensus and the emergence of a 'advocacy coalition structure'.     

Community Council Cooperation: The Lake Macquarie City Council Co-Governance Delegation Model

In its Better, Stronger Local Government, the Independent Local Government Review Panel (2012a, 2012b) advanced several claims regarding the performance of New South Wales (NSW) local government, including the supposed need for additional “sub-council” governance structures. This article argues that there is no need to “reinvent the wheel” in NSW local government by introducing additional “sub-council” structures since existing regulation already enables local authorities to engage in local co-governance. Using the example of the Lake Macquarie City Council (“LakeMac”) “delegation model,” the article shows that LakeMac has been successful in its endeavors to engage widespread community participation in co-governance to manage council facilities.     

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.     

Optimal approaches to structural reform in regional and rural local governance: The Australian experience

Abstract

Australian local government finds itself at the vortex of various mounting pressures, including acute funding shortages, complex intergovernmental relationships, and forced structural reform programmes, that have made the status quo unsustainable. State government policy makers have placed heavy emphasis on council amalgamations as their chief means of resolving the problems facing municipal governance. This paper argues that such reliance on the blunt instrument of municipal consolidation has been misplaced, not only because it is based on the mistaken premise that ‘bigger is better’ in local governance, but also because it ignores many other promising alternatives to amalgamation involving various combinations of structural change and process change better suited to the extremely diverse character of regional and rural local government in Australia.     

Local Government Failure in Australia? An Empirical Analysis of New South Wales

The complexities of contemporary local governance in Australia and other advanced democracies provide social scientists with significant theoretical and empirical challenges. Drawing on recent developments, including public choice theory, economists have sought to develop taxonomic systems of government failure specifically tailored to local government circumstances. This paper seeks to extend the Dollery and Wallis (2001b) taxonomy of local government failure by invoking Olson's (1965) concept of political entrepreneurship. The paper then attempts to determine the empirical validity of the augmented taxonomy by examining it in the context of NSW local government.     

How High Should They Jump? An Empirical Method for Setting Municipal Financial Ratio Performance Benchmarks

Heightened concerns regarding the financial sustainability of local councils have resulted in an increasing reliance by municipal regulators on financial ratio performance benchmarking. However, these benchmarks are often assigned without explicit justification and despite a paucity of empirical evidence. Furthermore, regulators typically allocate a single performance benchmark across an entire local government system despite the fact that individual councils may face entirely different operating environments. Failure to take account of the environmental challenges facing councils can result in inappropriate or unattainable performance benchmarks that may give rise to unintended consequences, such as the well‐documented threshold effects. To address this problem, we develop an empirical method for allocating performance benchmarks with respect to the current level of performance and environmental constraints facing individual local authorities. We demonstrate this technique in a case study using data drawn from New South Wales local authority operating ratios.     

Less Haste,More Speed: The Fit for the Future Reform Program in New South Wales Local Government

In August 2011 the New South Wales (NSW) Government established the Independent Local Government Review Panel to examine the options for improving the sustainability of the NSW local government sector. In October 2014 the NSW Government set out its response in its Fit for the Future reform program. This paper provides a critical assessment of the Fit for the Future program. We show that it contains errors, relies on unreliable data, and neglects important factors, which may be ascribed to the haste with which it has been constructed. This could have serious consequences given the potential impact the Fit for the Future program will have on NSW local government. We thus conclude that it would be prudent to address these matters before proceeding further with the program.     

Good to share? The pecuniary implications of moving to shared service production for local government services

Shared services are often lauded as an efficacious means of reducing municipal expenditure and thereby improving waning financial sustainability. However, most of the extant theoretical and empirical work only considers costs and benefits at the level of the specific service in question and, hence, fails to capture many of the wider benefits and costs that might accrue to local governments. In this article we first build a schema to illustrate the benefits and costs of moving from separate to collaborative production at the level of individual local authorities. We then test two hypotheses drawn from the schema against a five‐year panel of expenditure data. We find evidence of increased expenditure in the order of 8 per cent that prima facie runs counter to the objectives of many municipal managers engaged with shared services. We conclude by considering the implications of our findings for cooperative ventures between local authorities.     

Is Bigger Really Better? A Comparative Analysis of Municipal Mergers in Australian and Japanese Local Government

While structural reform by means of municipal mergers has been employed in many different countries, council consolidation has been especially marked in Australian and Japanese local government. This suggests that much can be learned by examining amalgamation through the analytical prism of comparative analysis. In this article, we investigate structural reform through municipal amalgamation in Australian and Japanese local government by examining the aims of amalgamation, the methods employed by public policy makers and the outcomes which were achieved. From this comparative analysis, we attempt to draw some broader lessons for local government policy making aimed at local government reform.     

The Impact of Fiscal Illusion on Housing Values: An Australian Test of the Debt Illusion Hypothesis

The debt illusion hypothesis holds that taxpayers may underestimate the present discounted value of future tax liabilities under debt finance. The empirical question arises as to whether debt illusion at the local government level can affect housing values. This proposition is evaluated by investigating whether local fiscal variables are fully capitalized into housing values by means of a pooled time-series, cross-sectional analysis of twenty-seven metropolitan municipalities in Sydney, Australia, for the period 1989 to 1991. The results indicate that municipal debt is under-capitalized into housing values and, accordingly, suggests that local government expenditure may be systematically biased upwards.