Bottom-Up or Top-Down Local Service Delivery? Assessing the Impacts of Special Districts as Community Governance Model

• Author: Brian Y. An
• Published date: 01 January 2021
• DOI: 10.1177/0275074020933968
• Date: 01 January 2021
• Subject Matter: Articles

https://doi.org/10.1177/0275074020933968

American Review of Public Administration

2021, Vol. 51(1) 40 –56

© The Author(s) 2020

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DOI: 10.1177/0275074020933968

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Article

Introduction

When special districts are discussed, the literature and media

often describe them as shadow governments that lack visibil-

ity and accountability to the public (Bollens & Gaus, 1957;

Burns, 1994; Foster, 1997; Smith, 2019).1 That is, they are

usually considered as either institutions of private interests

for infrastructure financing (Burns, 1994; Carter et al., 2019;

Fay, 2016) or entities created to circumvent state restrictions

on fiscal and administrative autonomy of local governments

(Carr, 2006; Carr & Farmer, 2011; Goodman & Leland,

2019; Greer et al., 2018; Shi, 2017). It has also been argued

that local governments create special districts to relieve their

growing tax burdens, especially in times of fiscal stress

(MacManus, 1981; Shi, 2017).

Despite our understanding of drivers of special district

formation, the attention to their performance has been rela-

tively scant in the literature (cf. Fay, 2016; Mullin, 2008).

This lack of interest is partly due to sparsely available data

for these local governing entities, compared with state and

general-purpose local governments. It is also partly due to

our limited understanding of their variation in institutional

type. Unlike cities and counties, specialized functions of the

districts vary significantly among themselves. Hence,

research on special districts needs to consider the context for

functional specialization and local conditions within which

these districts emerge and operate (Foster, 1997; Heikkila &

Ely, 2003).

Among various types of special districts, this article

focuses on community services districts (CSDs) in California

that residents create to achieve a bottom-up governance

structure in local service delivery, after opting out of a top-

down structure. An important characteristic of CSDs is that

community residents design the structure and organization of

their own local governing entities to meet their needs and

interests better than they were by a previous top-down gov-

erning arrangement. From a local governance standpoint,

this event is interesting and worth studying its impacts

933968ARPXXX10.1177/0275074020933968The American Review of Public AdministrationAn

research-article2020

1The University of Tennessee, Knoxville, USA

Corresponding Author:

Brian Y. An, Department of Political Science, The University of

Tennessee, Knoxville, 1001 McClung Tower, 1115 Volunteer Blvd.,

Knoxville, TN 37996-0410, USA.

Email: brianykan@gmail.com

Bottom-Up or Top-Down Local Service

Delivery? Assessing the Impacts of Special

Districts as Community Governance Model

Brian Y. An1

Abstract

This article assesses the impacts of bottom-up local governing institutions relative to top-down bureaucracies in local service

delivery. Community services districts (CSDs) in California, a class of special districts that provides various neighborhood-

level services, are examined to answer this question. An innovative characteristic of this institutional form is that it is

residents who create them through a grass-root collective action to achieve a bottom-up governance structure, after opting

out from a county service system. With changes in residential property values as performance metrics, the quantitative

analysis utilizes district formation events and features a hedonic difference-in-difference regression. The results show that

the creation of CSDs produces more significant impacts on property values than county authorities do. Yet, the effects

are heterogeneous across the communities when the analysis is further drilled down to each district. The exploratory

qualitative case study then uses interview data with district managers and document analysis to unveil what administrative

factors explain the success and failure trajectory of bottom-up institution management. The case study identifies such factors

as critical codeterminants, including managerial and board leadership, clarity of a problem statement, public support, and

intergovernmental coordination with county and state agencies.

Keywords

special district, collective action, bottom-up process, community governance, property values, managerial capacity

An 41

because these residents initially received services from a

county government, given their location in an unincorpo-

rated area. Hence, what the residents achieve by creating

CSDs is a change in governing structure and leadership from

county supervisors to community experts whom they directly

elect from their respective community boundaries.

Creating self-governing institutions like CSDs requires an

extensive collective action and administrative process.

Therefore, residents undertake this action when they usually

experience structural problems such as a fiscal common-pool

issue under the county service system. For example, commu-

nities under the county system do not have direct control over

their resources as those are pooled and managed altogether

under the county’s fiscal common pool. As a result, commu-

nities may receive fewer resources than what they need, pro-

hibiting them from investing in their own infrastructure.

Notwithstanding these uncertainties, they lack any power

mechanism to address such a challenge as they are unable to

replace their county governing board directly. In other words,

under a county system, the county board of supervisors is

elected by districts, and the district boundaries are much

larger than each community service boundary. By contrast, a

CSD structure allows the residents higher leverage over the

board election because their district boundaries become

identical with the public service jurisdictional boundaries.

Hence, communities can achieve a better local representation

by creating a CSD.

To do this, residents first must dissolve the existing county

service areas (CSAs) in their jurisdictions. They then can

create CSDs as new and sole governing authorities for public

service provision. Another interesting feature of CSDs is a

broad range of neighborhood-level service offerings, includ-

ing water, sewer, trash collection, fire protection, and road

maintenance. Currently, California’s state law allows CSDs

to activate up to 31 service powers (Senate Bill 135). Hence,

CSDs are regarded as junior city governments in the state

hierarchy, and they are markedly different from other special

districts in the United States, which typically offer a single

service. Perhaps, due to these innovative structures and ser-

vice flexibility, CSDs have been chosen by many unincorpo-

rated communities in California as a self-governance model.

As of 2018, there were at least 1985 active special districts in

the state, and 315 of them were CSDs.2

Examples of such grass-root special districts may be

found in other states. For instance, the Lake Lemon

Conservancy District that manages the 11th largest lake and

seventh largest public reservoir in the state of Indiana was

created in 1995 by lake residents and landowners’ grass-root

efforts. The lake used to be managed by the City of

Bloomington, but the increasing financial burden of unused

water supply made them look for a group interested in man-

aging the reservoir. Homeowners eventually formed the dis-

trict, and they have restored the lake quality so that they

could keep upholding local amenity values from fishing,

boating, and swimming.

Likewise, the case of CSDs illustrates that communities

can propose a similar bottom-up governance model through

special districts that can fit their local conditions better than

existing top-down arrangement does. Yet, a question arises

as to whether these efforts would translate into improved

services. Namely, do these grass-root actions generate more

significant impacts on their places? Scholars of citizen and

neighborhood governance have argued that establishing

new institutions per se does not guarantee positive policy

outcomes (Box, 1997; Cooper et al., 2006; Ho & Coates,

2004; Irvin & Stansbury, 2004; Musso et al., 2006). In other

words, research shows that creating a participatory neigh-

borhood institution is one thing, and managing their perfor-

mance is often another complex task (Bovaird, 2007; Hong,

2015; Li et al., 2019). Unveiling a black box under which

communities successfully achieve bottom-up governance

initiatives for improved outcomes is one of the goals this

article addresses.

Notably, the literature shows that exploring the impacts

of bottom-up self-governance has not been an empirical

focus in the U.S. context. Rather, such attention was mostly

given to developing countries that executed some forms of

governance reforms such as decentralization (e.g., Besley

& Burgess, 2002; X. Zhang et al., 2004). It is understand-

able, given that the nature of the organization of the U.S.

governments is constructed based on federalism in which

local governments have much greater administrative inde-

pendence and fiscal autonomy than their counterparts in

other countries.

Yet, recent scholarship calls attention to the governance

challenges confronting small local governments in the U.S.

villages (P. Zhang & Holzer, 2020). P. Zhang (2019), for

example, argues that municipal government dissolution,

which used to be a rare occurrence in American history, has

rapidly increased since the 1990s.3 The same study finds that

dissolution is more likely to be considered and approved in a

village where the economy struggles, the population declines,

political trust undermines, and fiscal health deteriorates.4

Research has also shown that small local governments strate-

gically allocate resources to professional management to

cope with such challenges and to provide quality services

(Folz & Abdelrazek, 2009; French & Folz, 2004). While the

geographic focus of this article is limited to California and a

specific class of special districts therein, CSDs provide a

unique opportunity to examine the impacts of bottom-up

self-governance in the U.S. context.

This study provides empirical findings that contribute to

the knowledge of both academics and practitioners. The first

half of this article assesses the consequences of CSDs, mea-

sured through their impacts on residential property values.

The analysis employs quasi-experimental research design—

differences-in-differences methods—with massive adminis-

trative records of housing transactions. The findings support

the notion that a more localized representation and bottom-

up governance structure can yield more significant impacts