Local government failure

A substantial public choice literature exists on the generic phenomenon of government failure in advanced western representative democracies. However, much less attention has been focussed on this question in the specific context of local governance, with the important exceptions of Bailey (1999) and Boyne (1998). In this paper we advance the argument that not only is government failure an essential dimension of policy making at all levels of government, but that cogent reasons exist for believing that the problem of government failure may be much more acute in local government than at higher tiers of governance. This argument runs counter to conventional wisdom amongst commentators, including Bailey (1999) and Boyne (1998).UnpublishedAldrich, J. H. (1997), ‘When Is It Rational to Vote?’ in D. C. Mueller (ed.), Perspectives on Public Choice, Cambridge, Cambridge University Press, pp.373-390. Bailey, S. J. (1999), Local Government Economics, Basingstoke, Macmillan. Barr, J. L and Davis, O. A. (1996), ‘An Elementary Political and Economic Theory of the Expenditures of Local Governments’, Southern Economic Journal, Vol. 33(1), pp. 149-165. Barry, B. M. and Hardin, R. (1982), Rational Man and Irrational Society?, Sage Publications, London. Boyne, G. A. (1998), Public Choice Theory and Local Government, Macmillan, Basingstoke. Brennan, G. and Buchanan, J. M. (1984), ‘Voter Choice’, American Behavioural Scientist, Vol. 28(10), pp. 185-201. Breton, A. and Wintrobe, R. (1982), The Logic of Bureaucratic Conduct, Cambridge University Press, New York. Buchanan, J. M., Tollison R. D. and Tullock, G. (eds.), Toward a Theory of a Rent-Seeking Society, Texas University Press, College Station, pp.3-15. Dollery, B. E. and Singh, S. (1998), ‘A Note on the Empirical Analysis of Wagner’s Law’, Economic Analysis and Policy, Vol. 28(2), pp. 245-257. Dollery, B E. and Wallis, J. L. (1997), ‘Market Failure, Government Failure, Leadership and Public Policy’, Journal of Interdisciplinary Economics, Vol. 8(2), pp. 113-126. Dollery, B. E. and Worthington, A. C. (1996), ‘The Empirical Analysis of Fiscal Illusion’, Journal of Economic Surveys, Vol. 10(3), pp. 261-298. Faith, R. L. and Tollison, R. D. (1993), ‘Expressive versus Economic Voting’, in W. M. Crain and R. D. Tollison, Predicting Politics: Essays in Empirical Public Choice, University of Michigan Press, Ann Arbor, pp.231-244. Gramlich, E. M. (1977), ‘Intergovernmental Grants: A Review of the Empirical Literature’, in W. E. Oates (ed.), The Political Economy of Fiscal Federalism, Lexington Books, Lexington, pp.219-239. Grindle, M. (1996), Challenging the State: Crisis and Innovation in Latin America and Africa, Cambridge University Press, Cambridge. Hawley, W. (1973), Nonpartisan Elections and the Case for Party Politics, Wiley, New York. Hirschman, A. O. (1970), Exit, Voice and Loyalty, Cambridge University Press, Cambridge. Kerr, R. (1999), Toward More Efficient and Democratic Local Government, New Zealand Business Roundtable, Hamilton. Loughlin, M (1986), Local Government in the Modern State, Sweet and Maxwell, London. Magee, S. P., Brock, W. A. and Young, L. (1989), Black Hole Tariffs and Endogenous Policy Theory, Cambridge University Press, Cambridge. Moe, T. M. (1984), ‘The New Economics of Organisation’, American Journal of Political Science, Vol. 28(4), pp.739-777. Mueller, D. C. (1989), Public Choice II, Cambridge University Press, Cambridge. Niskanen, W. A. (1971), Bureaucracy and Representative Government, Aldine-Atherton, Chicago. Oates, W. E. (1972), Fiscal Federalism, Harcourt Brace, New York. O’Dowd, M. C. (1978), ‘The Problem of “Government Failure” in Mixed Economies’, South African Journal of Economics, Vol. 46(3), pp. 360-370. Olson, M. (1965), The Logic of Collective Action, Harvard University Press, Cambridge. Rodden, J. and Rose-Ackerman, S. (1997), ‘Does Federalism Preserve Markets?’, University of Virginia Law Review, Vol. 83(4), pp.1521-1572. Romer, T. and Rosenthal, H. (1978), ‘Political Resource Allocation, Controlled Agendas and the Status Quo’, Public Choice, Vol. 33(4), pp. 27-43. Rose-Ackerman, S. (1999), Corruption and Government, Cambridge University Press, Cambridge. Weisbrod, B. A. (1978), ‘Problems of Enhancing the Public Interest: Toward a Model of Governmental Failures’, in B. A. Weisbrod, J. F. Handler and N. K. Komesar (eds.), Public Interest Law, University of California Press, London, pp.30-41. Wintrobe, R. (1997), ‘Modern Bureaucratic Theory’, in D. C. Mueller (ed.), Perspectives on Public Choice, Cambridge University Press, Cambridge, pp. 429-454. Worthington, A. C. and Dollery, B. E. (1999), ‘Fiscal Illusion and the Australian Local Government Grants Process: How Sticky is the Flypaper Effect?’, Public Choice, Vol. 99(1-2), pp.1-13