Credible Commitment and Council‐Manager Government: Implications for Policy Instrument Choices

Abstract

The credible constraint of morally hazardous or opportunistic behavior can enhance efficiency. This idea is applied to an examination of local government institutions to identify how councilmanager government constrains opportunism in economic development by substituting low-power bureaucratic incentives for high-power electoral incentives. A panel design isolates changes in the use of development strategies or instruments in 516 cities.The central argument presented here is that the Progressive ideology of the separation of politics and administration, institutionalized in the council-manager plan, allows administrators and elected officers to more easily resist opportunistic behavior. Economic and political forces have significant effects that are different for mayor-council communities than for council-manager communities. The influence of strategic planning is evident in council-manager cities, but not in mayor-council communities. Under council-manager government, development is carried out in a discriminating manner, leading to lower levels of financial incentives but more loan and business-attraction programs. In conclusion, the authors discuss how the career patterns of city managers are shaped by the incentive structures created by the council-manager plan.Questions about whether and how different forms of municipal government influence policy choices have occupied scholars of urban politics and administration for several decades (Lineberry and Fowler 1967;Ostrom, Bish, and Ostrom 1988;Ruhil et al. 1999). Much of the theoretical underpinning of this inquiry derives from the study of structural reforms introduced by the municipal reform movement. This article revisits the history of municipal reform and examines how different forms of governments influence the incentives of local actors and the problems of moral hazard and credible commitment.As in other organizations, governance structures in cities create incentives for specific behaviors. Some highpower incentives produce benefits that can be realized directly by decision makers. In markets, high-power incentives lead to innovation and enhanced productivity as entrepreneurial leaders respond to profit motives (Williamson 1988). Nevertheless, high-power incentives Richard C. Feiock is a professor and director of the doctoral program at the Askew School of Public Administration and Policy, and he directs the local governance program at the DeVoe L. Moore Center at Florida State University. He is coauthor of Institutional Constraints and Policy Choice (SUNY Press) and has published widely on issues of local government and governance.

Structural and Institutional Determinants of Influence Reputation: A Comparison of Collaborative and Adversarial Policy Networks in Decision Making and Implementation

“…Recent studies emphasize the potentially complementary impact of the two modes of power (see also Feiock et al 2003) : Choi and Robertson (2013) distinguish between formal, "processual," and "structural" modes of power that might be able to mitigate power imbalances among actors, and thus impact upon decision outcomes in a group of stakeholders. Park and Rethemeyer (2012) analyze the explanatory value of actors' resource dependence for the structure of policy networks.…”

Bureaucratic Structure, Regulatory Quality, and Entrepreneurship in a Comparative Perspective: Cross-Sectional and Panel Data Evidence

“…2 The empirical literature on organizational design of bureaucracy considers two types of dependent variables. The first one is related to immediate bureaucratic outputs such as specific agency performance indicators (Chong et al 2012, Krause et al 2006, Lewis 2007, Shleifer et al 2012, policy choices (Feiock et al 2003) or corruption (Dahlstrom et al 2011, Rauch and Evans 2000, Rubin and Whitford 2008. The second type is concerned with wider societal outcomes such as growth, poverty reduction, population health, child mortality, tuberculosis prevalence (Cingolani et al 2013, Evans and Rauch 1999, Henderson et al 2007.…”

“…The overwhelming majority of the studies focus either on outputs or outcomes. For example Feiock et al (2003) analyze the impact of bureaucratic structure on the choice of economic The rest of the paper is organized as follows. First, we present the theoretical argument and derive a set of testable propositions.…”

“…In the spirit of this argument, recently several scholars have advanced the thesis that political insulation of the core of the state bureaucratic apparatus can also alleviate the credible commitment problem (Dahlstrom et al 2012;Feiock et al 2003;Knott 2012, Knott and Miller 2006Miller 2000). Similar to the case with CBI, the goal is to create an agent (bureaucracy) with preferences visibly different to those of the principal (politicians), which would make the agent non-responsive to narrow, short-time or the openly rent-seeking interests of individual principals, yet sufficiently disciplined to follow democratically agreed public policies.…”

The Economic Development Strategy Preferences of Community Leaders in Texas

“…Land use planning is a primary tool through which city leaders can institutionalize a perspective to engage in managed growth (Feiock, Jeong, & Kim, 2003), and suburban concern with managed growth leads us to anticipate an emphasis on planning. A comprehensive city plan (aka a general or master plan) normally covers a 20-year time span and establishes among other policy goals the community's fiscal and land use outcomes (Levy, 1997).…”