Does Local Autonomy Breed Leviathans? An Empirical Examination of All Cities in the United States

AuthorMikhail Ivonchyk
Published date01 December 2022
Date01 December 2022
Subject MatterArticles
Political Research Quarterly
2022, Vol. 75(4) 10791095
© The Author(s) 2021
Article reuse guidelines:
DOI: 10.1177/10659129211049817
Does Local Autonomy Breed Leviathans?
An Empirical Examination of All Cities in
the United States
Mikhail Ivonchyk
US states grant theirlocal units different levelsof autonomy in several dimensionsincluding f‌iscal, functional,structural, and
legal discretion. This study uses a comprehensive, multidimensional measure of autonomy to test its association with the
f‌iscal behavior of over19,000 municipalities in the UnitedStates. Competing theoreticalpredictions range from signif‌icant
increases in government size (Leviathan model), to no effect (median-voter model), and even smaller governments
(institutional collective action model). Quantile regression analysis is implemented to test the association between au-
tonomy and f‌iscal behavior for different city sizes. The empirical f‌indings indicate that cities with more autonomy tend to
spend less and have lower taxes and debt. The strength of this relationship, however, varies by city size.
local autonomy, f‌iscal behavior, Leviathan model, quantile regression, municipal budget, municipal debt, municipal taxes
Introduction and Literature Review
This study uses a multidimensional concept of autonomy
to test its inf‌luence on the f‌iscal behavior of all munici-
palities in the Unites States. The American Constitution
does not mention local governments delegating authority-
giving powers to states (1, 5). For historical, political, and
cultural reasons, states have been granted different de-
grees of local autonomy.
The implications of this variation for city policymaking
have been studied since the late 1800s, but much of the
literature has been descriptive, classif‌icatory and often
historical(Krane, Rigos, and Hill 2001, 14)and has relied
on crude measures of autonomy, such as the Dillons rule
home rule dichotomy (Richardson, Gough, and Puentes
2003;Richardson 2011).
The concepts of Dillons rule and home rule do not
capture the amount of discretion available to local units
(Richardson 2011), and given the complexities involved in
the distribution of power between state and local units (Liner
1989), it is impossible to use several ordered categories to
accurately measure local autonomy in all states (Krane,
Rigos, and Hill 2001,1516). Instead, researchers argue
that local autonomy is a continuous, multidimensional
concept without bright-line boundaries (Richardson 2011).
They distinguish legal, functional, personnel, structural, and
f‌iscal dimensions (Chapman 2003;Krane, Rigos, and Hill
2001;Woo d 201 1;Zimmerman 1981,1995)aswellasthe
importance of local governments in the state economy and
the capacity to use their discretion (Wolman 2008,Wolm an
et al. 2010).
Much of the literature has been preoccupied with only
one of these dimensionsof autonomy, f‌iscal discretion,and
has generated many valuable insights (e.g., Dove 2016;
Joyce and Mullins 1991;Maher, Deller, and Amiel 2011;
Mullins and Cox 1995;Mullins and Joyce 1996;Mullins
2004;Mullins andWallin 2004;Mullins andPagano 2005;
Park, Maher, and Ebdon 2018;Park, Park, and Maher
2018;Rown2000;Shadbegi an 1998,1999;Stallmann et al.
2017). The main premise of this study, however, is that all
dimensionsmust be tested in concert to fully understandthe
role of autonomy in local policymaking. There have been
several attempts to systematically operationalize and
measure local autonomy in different contexts (e.g.,Ladner
et al. 2019;Ladnerand Keuffer 2021;Vetter 2007;Wolm an
Rockefeller College of Public Affairs and Policy, University at Albany,
State University of New York, Albany, NY, USA
Corresponding Author:
Mikhail Ivonchyk, Rockefeller College of Public Affairs and Policy,
University at Albany, State University of New York, Milne 308, 135
Western Avenue, Albany, NY 12203, USA.
et al. 2010), but little progress has been made in testing
empirically the inf‌luence of multiple dimensions of au-
tonomy simultaneously. Wood s work (2011) is one of the
exceptionshere, which used a four-dimensionalmeasure of
municipal autonomy in the United States and found that
municipalities withmore autonomy tend to raise less taxes
and receive less state aid, with the level of spending and
debt not affected. However, this study used city data ag-
gregated at the state level and omits municipalities with
fewer than 25,000 residents.
In the meantime, there is little empirical evidence to
facilitate the debates about the appropriate level of local
autonomy and its implications for local policymaking.
Higher levels of governments in recent decades have been
imposing additional mandates on municipal governments
expanding their responsibilities without corresponding
increasesin their capacity and authority(Krane, Ebdon, and
Bartle 2004). State constraints on local authority may be
deemed necessaryto avoid local corruption,patronage, and
oppression of opposing views (Brennan and Buchanan
1980;Martin 1990), but the opponents note that lack of
autonomy can makeit diff‌icult for local off‌icials to react to
political, social, environmental, and economic changes
(Chapman 2003), and that more autonomy is necessary t o
be able to fulf‌ill the mandates and adequately meet the
desires of local constituents (Bunch 2014). In the absence
of clear empirical evidence that would help sort out these
opposing claims and elucidate the impact of multiple di-
mensions of autonomy, local policymakers are caught
between evergrowing demands and inadequateauthority to
meet them.
Current study aims to provide several contributions.
First, it uses a composite index incorporating seven di-
mensions ofmunicipal autonomy in all 50 states.Second, it
uses an individual city as the unit of analysis and includes
over 19,000 cities in the United States. Third, given the
diversity of cities in the country and that the effect of state
limitations may vary by jurisdiction size (Mullins 2004;
Rown 2000), this study implements a quantile regression
(QR) analysis allowing a richer characterization of the
testable relationship at different levels of the outcome
variables (Cameron and Trivedi 2009).
Relevant theoretical frameworks offer several alterna-
tive predictions with respect to the association between
municipal autonomy and f‌iscal behavior. The Leviathan
model posits that local off‌icials seek to maximize gov-
ernment revenuesand expenditures to distribute rewards to
their political allies, and more autonomy will be associated
with inf‌lated spending and higher taxes. The Institutional
Collective Action (ICA) framework suggests that more
independence from state restraints may provide the f‌lexi-
bility needed to create mutually benef‌icial collaborations
and generate cost saving, which may be ref‌lected in lower
spending and taxation, holding all elseequal. According to
the median-vote r model, however, democraticall y ac-
countable local off‌icials make policy choices consistent
with voter preferencesand the autonomy inf‌luence on f‌iscal
behavior may be insignif‌icant after accounting for citizens
The f‌indings provide empirical support to the median-
voter and ICA models, and offer no support to the Leviathan
model. More specif‌ically, the results suggest that munici-
palities with more autonomy tend to have lower levels of
expenditures, taxation,and debt. These results, as predicted
by the literature, vary by the jurisdiction s ize, but no in-
dications of signif‌icant increases supportive of the Levia-
than model were found in any of the outcomes at any city
size. Consequently, this study supports the notion that,
assuming properly functioning democratic institutions an d
interjurisdictional competition, local off‌icials are unlikely to
runamokandinf‌late city spending in the absence of state-
imposed con straints.
The next section lays out the theoretical predictions
testedin this study.Section three describesthe data, variable
operationalization, and estimation methodology. Empirical
f‌indings are discussed in section four. The paper concludes
with a discussionof the results, relevantpolicy implications,
and opportunities for future studies.
Theory of Local Autonomy and Fiscal Behavior
How can autonomy inf‌luence city f‌iscal choices? Relevant
literature describes several models of local policymaking
providing alternative theoretical predictions about local
autonomy and f‌iscal behavior (Craw 2008;Krane, Ebdon,
and Bartle 2004;McCabe and Feiock 2005).
The Leviathan model ref‌lects the skepticism about
votersability to control the government (Brennan and
Buchanan 19 79,1980,1981,1984). This model predicts
that in the absenceof external constraints local off‌icials will
seek to maximize government revenues and use public
resources to reward their supporters and ensure reelection.
They will distribute favors to their political alli es and silence
their opponents (Martin 1990). Government in this model is
akin to an uncontrollable Leviathan with expansionary
tendencies that over time produce grossly inf‌lated budgets.
State-imposed tax and spending limitations (TELs) are the
externalconstraints necessary to preventthe Leviathan from
expanding beyond what the constituents prefer (Bren nan
and Buchanan1980). The f‌inding that TELsare effective in
reducing government size is interpreted as supportive of
the notion that the Leviathan model may be operative
(McCabe and Feiock 2005;McGuire 1999, 129). Thus, if
the Leviathan model is relevant, we should expect higher
taxes and expenditures with greater degrees of city au-
tonomy, holding all else equal.
The ICA frameworkpoints to another plausible scenario
(Andrew and Feiock 2010;Feiock 2007,2013;Feiock,
1080 Political Research Quarterly 75(4)

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