Learning from the Joneses: The professional learning effect of regional councils of government on municipal fiscal slack in suburban Chicago

Abstract

Fiscal slack scholars have sought to identify the primary generators of unreserved fund balance (UFB) within local governments, including economic, organizational, demographic, institutional, and political factors. Guo and Wang extend this endeavor spatially; however, geography may mask the professional learning impact of subregional councils of governments (COGs). This study examines 265 Chicago suburban municipalities to reveal through a pairing approach that municipalities who belong to the same subregional COG generally have more similar UFB levels, independent of geographical proximity. Policymakers can therefore utilize COGs when making decisions regarding a municipality's most vital resource for strategic investments and fiscal stress.

Pressures to Local Governments for Unrequired Ethics Policy Adoption

“…Moreover, the findings reveal that Florida cities within a county where at least another city with an ethics policy exists are 10% more likely to adopt an ethics policy than the cities located in a county where no city government has an ethics policy. This finding supports Boehmke's (2009) idea of how powerfully influential peers within proximity can be on policy emulation, especially at the local government or regional level in a state (Mitchell, et al, 2020;Guo & Wang, 2017).…”

“…Further, the neighbor variable could be advanced in future research by measuring it differently. Spatial analysis and the impact of network theory could be tested to see if miles between cities that cross over county boundaries also predict the likelihood of ethics adoption (Mitchell et al, 2020). Future research can also examine the motive or event that served as the catalyst for ethics policy PAQ Vol 47, Issue 1 adoption, using surveys or interviews with city officials on why an ethics policy was adopted or even amended.…”

“…The influential power of "contiguity or regional proximity as a proxy for peer groups" (Boehmke, 2009(Boehmke, , p.1125) is an observed pressure that applies to every organization even in a digital age when information on peers expands beyond physical borders. Studies on policy emulation between countries (Brinks & Coppedge, 2006), between states (Boehmke, 2009), between regional governments in a state (Mitchell, Davis, & Hendrick, 2020), and between counties in a state (Guo & Wang, 2017) suggest the vital role and pressure that neighbors can have on organizations weighing policy changes to mimic peers. At the local level, this study anticipates neighbor emulation to be a driving force in the adoption of ethics policies, just as Brinks and Coppedge (2006) found "strong support for a pattern of diffusion in which countries tend to become more like their immediate geographic neighbors over time" in their study of democratic policies and regime change (p.464).…”

“…Fund balance is the difference between assets and liabilities (Marlowe, 2015), and a fiscal slack resource (Henrick, 2006) that is frequently studied in municipal financial health (Honadle & Lloyd-Jones, 1998;McDonald, 2017;Mitchell, et al 2020;Chung & Williams, 2021). Fund balance can also be considered the rainy-day fund or revenue source for a city to address unexpected events and expenses (Marlowe, 2012).…”

Accounting for the State Fixed Effect for Municipal Cash Reserves: The Role of Financial and Institutional Variables

“…This review is certainly not exhaustive, and there are several emerging research streams that are focused on other interesting categories (e.g., Wei 2020 or Mitchell, Davis, and Hendrick 2021), but a high-level understanding of the extant literature on municipal savings holds that financial outcomes and institutional differences are widely thought to be important. If these categories of variables are important for the savings behaviors of individual municipalities, then it is also reasonable to think that state-level differences in them could be important explanations for state fixed effects.…”