Search for: All records

Whether cities can provide critical public services and infrastructure depends on their fiscal health or the ability to pay for different service responsibilities and meet other financial obligations. In this study, we explore a long-simmering controversy in the study of local politics and public finance: does mayoral partisanship matter for city fiscal health? To answer this question, we use audited financial data from 2004 to 2016 for U.S. municipalities with a population of 50,000 or more to measure a critical dimension of fiscal health, which is budgetary solvency. Employing difference-in-differences regression with staggered treatment adoption, our findings reveal that cities switching from a Democratic to a Republican mayor experience improvements in budgetary solvency. However, the effect does not last and dissipates as the next election approaches, indicating the existence of a city fiscal health cycle. The effects of mayoral partisanship are more evident when elections are not competitive. We also find that Republican mayors in mayor-council cities exhibit better budget outcomes than Republican mayors in council-manager cities. 

The study examines how two major strategy formulation approaches – rational planning and logical incrementalism – influence the decision of city governments to collaborate with for-profit, non-profit, and other public organizations. Collaboration with governmental and non-governmental actors gives rise to varying levels of risks, and the choice of which type of organization to collaborate with is influenced by how distinct strategy formulation processes can help governments address those risks. Using data from a national survey of cities, we find that the strategy-making process can spur or hinder collaborative undertakings. The results of the regression analysis indicate that rational planning catalyzes cross-sectoral collaboration but is not associated with government-to-government collaboration. Logical incrementalism, in contrast, has a consistently negative relationship with collaboration regardless of sector. The findings indicate that collaboration can be limited by city governments’ capacity to undertake rational planning and their propensity to engage in incrementalist decision-making. 

One‐shot revenue shocks influence government budget decisions and service provision. However, how governments respond to transitory income remains a theoretical and empirical puzzle. The permanent income hypothesis posits that governments save windfalls to smooth expenditures, while other models predict spending increases. Empirical findings are inconclusive as the focus has been on revenues that are not truly transitory. The case of special and extraordinary gains allows us to investigate the effects of transitory resources. Taking advantage of the Governmental Accounting Standards Board's requirement that governments report such gains in their financial statements, this study examines the effects of gains on expenses for a sample of cities across 10 years. Using a staggered adoption event study design, we find that gains stimulate spending and that the size of gains matters before one observes the stimulatory effects. These results have substantial implications for budgetary transparency and fiscal sustainability in municipal governments.