Measuring Efficiency in Local Government: An Analysis of New South Wales Municipalities' Domestic Waste Management Function

Data envelopment analysis is used to measure the technical and scale efficiency of the domestic waste management function in 103 New South Wales local governments. After allowance is made for nondiscretionary environmental factors that may affect the provision of these local public services, such as congestion and the inability to operate machinery in densely populated urban areas, comparison of efficiency across geographic/demographic criteria is made. The results suggest that, on average, waste management inputs could be reduced to just over 65% of the current level based upon observable best-practice, while productivity losses due to scale effects account for slightly over 15% of total inputs. The results also indicate that inefficiency in urban developed councils is largely the result of congestion and other collection difficulties encountered in densely populated areas, while inefficiency in regional and rural councils stems from an inability to attain an optimal scale of operations.     

PUBLIC CAPITAL, REGIONAL OUTPUT, AND DEVELOPMENT: SOME EMPIRICAL EVIDENCE

ABSTRACT The goal of our paper is to provide direct estimates of the association between public capital and regional output. This is made possible by the construction of a data series which measures public capital at the state level.
The relation between public capital and other productive factors is tested using a translog production function. Our results show that labor and public capital are complementary inputs, and that public capital exhibited diminishing returns. We also consider restrictions on the translog formulation. Linear homogeneity is rejected in all cases, and the Cobb-Douglas specification is rejected for the manufacturing and all sectors categories.     

UNDOCUMENTED IMMIGRANTS AND THE WELFARE STATE: THE CASE OF REGIONAL MIGRATION AND U.S. AGRICULTURAL LABOR

A common perception is that immigrants, including illegal immigrants, use disproportionate public aid and select locations based on characteristics of services offered. This paper asks to what extent geographic clustering of undocumented immigrant agricultural laborers in the U.S. is correlated with take‐up of public aid broadly defined. Evidence from a nationally representative farmworker survey does not support welfare migration for undocumented immigrants, who have been previously unidentifiable in the literature. The paper, therefore, challenges existing notions of welfare migration by illegal immigrants that have inspired state‐level public policy initiatives.     

Foreclosure Risk and Community Health: Does Social Capital Have a Protective Effect?

This study draws upon the social determinants of health framework to model and test the extent to which a community’s social capital is health protective in the face of a substantial economic shock, namely the recent foreclosure crisis. U.S. county–level data are used to analyze potential moderating effects of social capital on health given a community’s foreclosure risk. We rely upon established social capital measures for U.S counties and merge them with county level foreclosure risk scores constructed by the U.S. Department of Housing and Urban Development (HUD). While theorists suggest that social capital’s effect on health and other outcomes may be durable over time there have been few empirical tests of this. We interact established social capital indicators measured at two points in time with foreclosure risk to predict overall self-reported health. Our results provide strong support suggesting that high levels of social capital are health protective. Communities with high levels of social capital that are facing high foreclosure risks report significantly better aggregate health outcomes than comparable communities facing the same level of foreclosure risk, but lower levels of social capital.     

THE IMPACTS OF TRANSPORTATION INFRASTRUCTURE ON PROPERTY VALUES: A HIGHER-ORDER SPATIAL ECONOMETRICS APPROACH

ABSTRACT.  We evaluate the impacts of enhanced transportation systems on property values for U.S. manufacturing firms, allowing for higher-order spatial error correlation. We use a state-level model of production cost and input demand that recognizes the productive contribution of public transportation infrastructure stocks. Our findings include significant impacts on property shadow values and input composition from both public highway and airport investment. We also find that these effects have a spatial dimension that depends on the proximity of the transport system; at least one and as many as three spatial error lags are significant in our estimating equations. Further, recognizing production growth from transportation system improvements augments the associated incentives for private capital investment.     

Special Interest Capture of Regulatory Agencies: A Ten‐Year Analysis of Voting Behavior on Regional Fishery Management Councils

This article tests capture theory by analyzing voting behavior on U.S. Regional Fishery Management Councils. Some seats on the councils are reserved for state and federal agency representatives; others, for political appointees. The political appointees primarily represent special interests (specifically, commercial and recreational fishing interests); a smaller number of appointees represent public interests. We use logistic regression to model the vote of state and federal agency representatives on the councils as a function of the votes of commercial interests, recreational interests, and public interests. We find evidence that some state agencies are captured by special interests from their states, but not systematic evidence across all states. We find that state agency representatives voted with commercial interests from their own state in five of the sixteen states in our sample; with recreational interests in three states; and with both special interests in two states. These ten states support the capture hypothesis; the other six states do not. We find no evidence that federal agencies were captured on the councils. We conclude that the gubernatorial‐driven appointment process leads to capture at the state level by promoting voting blocs among state agency representatives and special interests from those states. Federal agency representatives, by contrast, are better able to maintain their distance from state‐level politics on the councils, and thereby enhance their ability to vote independently on fishery management measures.     

THE DEBT/TAX CHOICE IN THE FINANCING OF STATE AND LOCAL CAPITAL EXPENDITURES*

ABSTRACT. State and local governments commonly finance investment in public capital by issuing bonds and by using current revenues. This paper presents a model of state and local governments' reliance on borrowing in which the optimal share of debt in the financing of capital investment depends on the relative costs of tax and debt finance. Equations are derived and estimated for spending on public capital and the share of debt in the financing of that spending. The results reveal that the level of private incomes plays an important role in both the capital investment and financial decisions of the jurisdiction. Even after controlling for Sunbelt-Snowbelt differences in incomes, grants, outstanding debt and certain demographic factors, the results indicate that state and local governments located in the Snowbelt rely more heavily on bond issues to finance capital investment. Finally, the estimated invariance of the level of state and local capital investment to the share of debt in the financing of the investment suggests that investment decisions are not greatly affected by factors influencing the willingness to issue bonds.     

Effects of U.S. States' Social Welfare Systems on Population Health

Social scientists have studied the welfare state extensively. Many studies seek to understand the determinants of the welfare state; however, a few have explored the social consequences of social welfare systems, especially on health outcomes of the population. Even though cross-national comparative studies support the thesis that the welfare state regime type, which represents different levels of commitment on social welfare, is closely linked to population health, there is little research to support this argument at a sub-national level. To fill the gap, this study explores the effects of the U.S. states' social welfare systems on health using age-adjusted mortality rates as a proxy for population health. By operationalizing social welfare systems as three dimensions—public expenditures, tax structures, and welfare program rules—we find that more generous education spending, progressive tax systems, and more lenient welfare program rules help to improve population health. The model corrects for first-order serial correlation using Prais-Winsten regression methods and is estimated with state and year-fixed effects.     

Gender and Patterns of Roll Call Voting in the U.S. Senate

Previous studies of gender and representation at the state legislative level and in the U.S. House of Representatives have shown that women tend to be more liberal than their male colleagues and are more likely to support women's issues. Because of the limited presence of women in the body over the years, there is scant empirical evidence to confirm whether this pattern is present in the U.S. Senate. Sound theoretical basis indicates that the institutional rules of the Senate, the Senate's individualistic culture, the Senate's six-year election timetable, and the national profile of U.S. senators may create conditions that allow gender differences in roll call voting to be more easily detected than is possible in more rigidly structured institutions such as the U.S. House. This study employs a longitudinal design that pools roll call voting data from the 103rd Congress through the 110th Congress to determine whether female senators compile substantively different policy records than their male colleagues. The results indicate that gender does systematically influence roll call voting patterns in the Senate. However, it is largely a function of female Republicans voting in a less conservative fashion than male Republicans on the basic left-right policy space and on a smaller set of issues of importance to women.     

Leviathan vs. Lilliputian: A Data Envelopment Analysis of Government Efficiency

In this paper we present a new approach to measuring government efficiency, based on the theory that communities that allocate resources efficiently in the local public sector maximize property values. We use Data Envelopment Analysis (DEA) to identify the counties in Minnesota that are characterized by property-value maximization and hence an efficient public sector. The results indicate that the dominant source of public sector inefficiency is an inappropriate scale of operations. It appears that some county jurisdictions are too large to service the population efficiently. The size and concentration of government power are also responsible in part for observed inefficiencies.     

DECENTRALIZED TAX COMPETITION FOR BUSINESS CAPITAL AND NATIONAL ECONOMIC EFFICIENCY*

ABSTRACT For a nation composed of independent regions, the effects of local tax competition for business investments are examined. It is first shown that atomistic regional authorities tax only local resources to finance the provision of public services to business. Thus, an efficient interregional equilibrium is induced. Various political/institutional constraints are shown to cause misallocation of the capital stock and an inefficient provision of public services. The characterization of the inefficiency is shown to vary widely, depending upon the constraint under consideration.     

Market Rules and Spatial Outcomes: Insights from the Corporate Restructuring of U.S. Food Retailing

In this paper a study of the corporate restructuring of the U.S. food retail industry, during and following the period of regulatory relaxation and high-leverage capital transformations of the 1980s, is used to interrogate the complex relationships between market regulation, investment regimes, corporate strategies, and spatial outcomes. It is shown that changes in the “rules” governing investment and competition in the United States in the 1980s triggered countervailing spatial processes in the food retail industry. Those processes took more than a decade to work themselves through, but by the late 1990s a radically altered corporate landscape was beginning to emerge. In particular, consolidation of the industry had finally gained momentum–creating an industry whose leading firms are likely by 2002 to have a market share double the level of the early 1990s. The paper concludes by considering the insights which a consideration of corporate restructuring and regulation in this U.S. industry offers for some important areas of conceptual debate in economic geography. In particular, it is argued that industries in which capital structure transformations of the firm must be confronted and treated as a central issue have an intrinsic, but until recently neglected, importance in theoretical debate in the discipline.     

Punctuated Equilibrium in Limbo: The Tobacco Lobby and U.S. State Policymaking from 1990 to 2003

Since the mid-1980s, U.S. tobacco policy has been an intense and acrimonious issue between antitobacco advocates and the tobacco industry. In the United States, the tobacco industry has responded to heightened state antitobacco litigation, adverse public opinion, and public health advocacy by aggressively mobilizing against tobacco taxes and regulations. This article examines whether these tobacco policy trends can be generalized to punctuated equilibrium theory ideas that policy monopolies are stable over long periods and usually change because of sharp and short-term exogenous shocks to the policy system. From 1990 to 2003, there was a sharp mobilization by health advocates in all states and a significant rise in new legislation to control tobacco use. The tobacco industry, nevertheless, was able to generally keep state tobacco taxes low and counter significant regulatory threats to tobacco sales. From this, I conclude that the policy monopoly favoring the tobacco industry did not significantly change, despite the symbolic appearance of punctuation in the policy system.     

Accounting for Air Pollution Emissions in Measures of State Manufacturing Productivity Growth

A Malmquist-Luenberger productivity index is employed to account for both marketed output and the output of pollution abatement activities of U.S. state manufacturing sectors for –1986. The index allows us to decompose the change in productivity into measures of change in efficiency and technical change. By accounting for the change in emissions, average annual productivity growth is 3.6 percent, whereas it is 1.7 percent when emissions are ignored. We also find adjusted productivity growth improved after 1977, and "Frost Belt" states with rapidly growing manufacturing sectors have significantly higher rates of productivity growth than "Sun Belt" states with slow growing manufacturing sectors.     

LOCAL INPUT AND PRODUCTIVITY GROWTH IN U.S. MANUFACTURING: 1972–2002*

ABSTRACT This research analyzes manufacturing growth and decline across metropolitan and nonmetropolitan regions during the 1972–2002 period. We decompose real value added growth across local labor market areas in the lower 48 U.S. states into contributions from labor, capital, and total factor productivity. We then estimate a model describing the long‐run growth of labor, capital, and productivity and find that increased productivity increases the growth of labor and capital, as well as a positive correlation between labor and capital stock growth. We also find evidence that human capital investment and agglomeration economies encourage productivity growth, while unionization discourages it.     

POPULATION DISPERSION VS. CONCENTRATION IN A TWO‐REGION MIGRATION MODEL WITH ENDOGENOUS NATURAL AMENITIES*

ABSTRACT Contrary to the predictions of the basic spatial equilibrium model, the long‐run distribution of population across rural U.S. counties with high‐valued natural amenities has become relatively more concentrated versus dispersed. We provide an explanation by developing a two‐region model with mobile labor, production externalities and endogenous natural amenities. We find that strong preferences for natural amenities generally foster population dispersion. However, such preferences can also lead to population concentration when ecological degradation is low and man‐made capital is a relatively scarce input into natural amenity production. Investments that enhance natural amenities are found to reduce the divergence between the steady state and optimal outcomes.     

PRODUCTIVITY AND THE DENSITY OF HUMAN CAPITAL*

ABSTRACT We estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area's stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan areas along with a measure of density that accounts for the spatial distribution of population, we find that a doubling of density increases productivity by 2–4 percent. Consistent with theories of learning and knowledge spillovers in cities, we demonstrate that the elasticity of average labor productivity with respect to density increases with human capital. Metropolitan areas with a human capital stock one standard deviation below the mean realize no productivity gain, while doubling density in metropolitan areas with a human capital stock one standard deviation above the mean yields productivity benefits that are about twice the average. These patterns are particularly pronounced in industries where the exchange of information and sharing of ideas are important parts of the production process.     

Book Reviews

Abstract

The coordinated behavior of members of a state delegation to the U.S. Senate can provide constituents in a state greater representation in Congress. Despite this potentially improved level of representation through coordination, popular and scholarly accounts of the U.S. Senate often feature senators from the same state at odds with one another on a variety of policy issues. In this research, we investigate competing expectations regarding the frequency (across topics) of collaborations between members of a state delegation to the Senate. We then test our expectations using patterns in bill cosponsorship in the 103rd–110th U.S. Senates. We find that senators from the same state work together often on the development of legislation, and that this coordinated activity is consistent across a variety of bill topics across many sessions of congressional activity. Notably, same-state status is an even stronger predictor of support via cosponsorship than is same-party status, raising possible avenues of breaking through partisan gridlock.     

Cold War,Public Opinion,and Foreign Policy Spending Decisions: Dynamic Representation by Congress and the President

Conventional wisdom before the Vietnam War held that public opinion exerted no influence on U.S. foreign policy decisions. Scholars working in Vietnam's aftermath found episodic influence of public opinion on foreign policy, but missing in our understanding were longitudinal examinations of public opinion's influence on foreign policy. A number of post-Vietnam scholars subsequently revealed a long-term relationship between public opinion and defense spending. This study extends that work by analyzing responsiveness to public opinion in different foreign policy arenas by different government institutions, and by accounting for a critical variable not relevant in most previous studies: the end of the cold war. We construct a model explaining the influences of public opinion and the cold war on spending proposals for defense and foreign economic aid by the presidency, the House of Representatives and the Senate. Both public opinion and the end of the cold war exert direct influence on defense spending proposals by the presidency, while the Senate and the House respond primarily to public opinion inputs and the partisan composition of the Senate. In the case of foreign economic aid, the cold war's end gives occasion for increasing spending proposals, contrary to the public's expectation that the end of the cold war minimized the need for the U.S. to provide foreign economic assistance.     

Cost Efficiency,Urban Patterns and Population Density When Providing Public Infrastructure: A Stochastic Frontier Approach

Relying on stochastic frontier analysis we propose a methodology to study the technological characteristics and cost efficiency levels related to the provision of public infrastructure for basic utilities. The methodology assumes a cost minimizing behaviour on the part of public officials when planning the construction of local infrastructure, which is represented by way of a flexible translog cost function. Introducing relevant definitions of scale economies, associated with larger numbers of inhabitants and dwellings, as well as economies of density, brought about by reductions in urban dispersion, we analytically determine the optimal population densities for which average cost is minimized. We illustrate our model with the water cycle sector, including water distribution, sewage collection and cleansing of wastewater, and considering data at the municipality level for the Spanish region of Castilla y León. The obtained results indicate potential cost savings in the form of decreasing average costs, as relevant scale and density economies are present, along with large inefficiency levels. Relevant policy guidelines favouring larger and denser urban sizes are drawn, as the observed cost excess is the result of a general suboptimal urban size in terms of population density, and the negative effects of dispersed settlement patterns.