Copy Once or Twice? Isomorphic Pressures and Special District Fiscal Reserves

Abstract

Both general purpose local governments and special districts accumulate and drain fiscal reserves to prepare for and respond to financial uncertainty. Whether or not fiscal reserves behavior are subject to isomorphic pressures is an emerging question in the literature. While multiple papers have provided evidence of a single isomorphic pressure, no paper has separately tested for three distinct isomorphic pressures in the fiscal reserves literature. With a panel dataset of Kentucky school districts from 2004 to 2019, this article uses descriptive and inferential methods to provide evidence of coercive, normative, and mimetic isomorphic pressures. Collectively, these findings not only build the literature on special districts but call into question the role of normative pressures from the Government Finance Officers Association and coercive pressures from state-imposed fiscal reserve rules.