Competing Public Values Amidst Fiscal Crisis: The Case of State Takeover System in Michigan

• Author: Kyu-Nahm Jun,Alisa Moldavanova
• DOI: http://doi.org/10.1177/00953997211061110
• Published date: 01 September 2022
• Date: 01 September 2022
• Subject Matter: Articles

https://doi.org/10.1177/00953997211061110

Administration & Society

2022, Vol. 54(8) 1431 –1464

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DOI: 10.1177/00953997211061110

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Article

Competing Public Values

Amidst Fiscal Crisis: The

Case of State Takeover

System in Michigan

Kyu-Nahm Jun1 and Alisa Moldavanova1

Abstract

The article analyzes contested reasoning and public values conflict in the

state takeover of municipalities via emergency managers (EM) to address

fiscal crisis. We investigate the following questions: (1) which public values

are associated with the EM intervention strategies?; (2) is there a competition

among those values? A content analysis of nearly 500 official documents in

four Michigan municipalities reveals that EM interventions reflect a strive for

fiscal accountability and legality at the expense of democratic values. This

study contributes to the growing body of research on public values, and it

advances our understanding of decision-making processes under stress.

Keywords

public values, public values conflict, state receivership, local government,

fiscal crisis

Contested reasoning is the term used in logic to describe competing points of

view that produce a logical conclusion by considering the various contradic-

tions. Contested reasoning, however, is not uncommon in public sector orga-

nizations that often deal with conflicting demands, inconsistent information,

1Wayne State University, Detroit, MI, USA

Corresponding Author:

Kyu-Nahm Jun, Department of Political Science, Wayne State University, 656 West Kirby,

Detroit, MI 48202-3489, USA.

Email: kn.jun@wayne.edu

1061110AAS0010.1177/00953997211061110Administration & SocietyJun and Moldavanova

research-article2021

1432 Administration & Society 54(8)

vague and competing goals, and otherwise asymmetric realities that compli-

cate the decision-making process. Furthermore, external crises, such as finan-

cial recessions, political pressures, public health crisis, and public uprisings,

all create the kind of environment in which contested reasoning is often man-

ifested in public values conflict. The goal of this article is to revisit some of

the lessons brought on by the 2007 Great Recession for local governments

that experienced high levels of fiscal stress, in some cases leading to a state’s

preemptive takeover of local governments in crisis. In this article, we aim to

understand this contestation and its sources by qualitatively analyzing admin-

istrative documents and meeting procedures that describe the decision-mak-

ing process.

Restoring fiscal stability in U.S. municipalities is a complex task. One

strategy of addressing fiscal emergencies is the state takeover or receivership

of the local governments in question (Honadle, 2003; Nickels et al., 2020). In

2012, the State of Michigan adopted such an intervention in the form of the

emergency manager (EM) law. The term “emergency management” in

Michigan also relates to fiscal emergencies, which is different from the con-

ventional use of the emergency management in natural and human-made

disasters. Typically, the powers bestowed upon EMs by the state are greater

than those of democratically elected local officials. To date, 1 county, 13 cit-

ies, and 6 school districts in Michigan have undergone repeated state over-

sight. In 2014, EM came under fire due to the Flint water crisis and the

perennial failure of the Detroit public schools. While relying on the EM sys-

tem may be a viable solution to immediate fiscal challenges, there is also

potential for a competition among core public values involved in the restruc-

turing process.

The goal of this article is to examine the interplay of public values that

occurs in a local government context when dealing with extreme fiscal cri-

sis. We rely on the context of the EM system imposed on Michigan munici-

palities post Great Recession of 2007. Specifically, we investigate the

following research questions: (1) Which public values are associated with

the intervention strategies adopted by municipalities in the process of state

receivership?; (2) Is there a competition among such values? To answer

these questions, we conducted content analysis of a large number of admin-

istrative documents and meeting minutes (n = 492) associated with state

receivership in four Michigan municipalities—Allen Park, Detroit, Ecorse,

and Flint—that declared fiscal emergency and had state-appointed EMs

implement reform measures needed to bring cities back to financial

stability.

Our analysis reveals that the EM system in Michigan underscores neutral

competence and technical expertise of professional managers in addressing

Jun and Moldavanova 1433

the fiscal crisis at the expense of other public values, which echoes findings

from several previous studies of the emergency management system

(Fasenfest, 2018, 2019; Fasenfest & Pride, 2016; Hughes et al., 2021; Nickels,

2019; Seamster, 2018; Wang & Crosby, 2019). The EMs’ lack of democratic

accountability to residents and elected local officials reflects the pursuit of

the utmost degree of neutral competence, in an effort to resolve the financial

emergency that Michigan communities confronted. Although there are some

differences in the implementation of the EM interventions among the cities in

question, public values associated with financial accountability and legality

dominate in all four municipalities. Moreover, the four cities included in the

study have commonly faced pressures to centralize their decision-making

processes by granting increased responsibility to city administrators in the

mayor-council form of government, much like Progressive Era reformers did

a century ago. While it is clear that some of the reform efforts have had

immediate positive effect on financial stability, it is less clear how an inter-

vention that lacks proper balance among key public values will ensure long-

term financial sustainability.

The article analyses contested reasoning that occurred in the EM context

and suggests propositions that could be tested empirically in future studies.

Although our findings are descriptive, this research contributes to the grow-

ing body of empirical research on public values and value conflict, and it

advances our understanding of the public sector decision-making processes

under stress. The crisis situation at the local level in Michigan presented an

opportunity to discern the guiding values of our society and to understand

how such values enable or obstruct the pursuit of sustainable governance.

While the Great Recession occurred more than a decade ago, many local

governments are still dealing with its consequences while facing previously

unknown global threats, such as the COVID-19 pandemic as well as the pros-

pects of the worst financial recession since World War II (The Work Bank,

2020). Therefore, findings presented here allow learning from the past to be

able to map out possible future responses in light of the value conflict that is

likely to occur again.

The article proceeds as follows. First, we discuss the empirical context for

the study, including background information about the EM system in

Michigan. Second, we provide a review of the literature on competing public

values. Next, we discuss the research design and data sources. We further

report the findings from the four Michigan cities and suggest some proposi-

tions for future research. The article concludes with the discussion of the

study’s implications and future research directions.