Legitimacy in decision making: increasing voter approval of municipal bonds.

Author:Blount-Hill, Kwan-Lamar
 
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In the 2016 election, U.S. electorates not only chose a president and ushered in new state and local government administrations; they also approved dozens of bonds for new infrastructure projects. State and local administrators need to understand trends in voter approval of municipal bond measures because general tax revenues have increased slowly, if at all, and have declined in several jurisdictions. Declining revenues naturally reduce the "fiscal space" for governments to shift resources as necessary among agenda items (see Exhibit 1). (1) When other funding sources prove inadequate, the ability to fund necessary projects through debt financing becomes increasingly important.

OBSTACLES TO VOTER APPROVAL

The process of municipal bond approval is, at its core, political. As such, outcomes are largely determined by the mood of the general public and citizens' support for--or resistance to--the proposals of its government leaders. In the case of municipal bond approval, the natural difficulties of political decision making are complicated by the fact that citizens often see budgetary and financial matters as complex and hard to grasp. A natural reaction to confusion is to rely on heuristics, automated and habitual mental shortcuts based on previous experiences or perceptual biases. (2) Automatic responses can be fatal to a bond initiative if the citizen is relying on his or her default position against government spending or debt. Even voters who are more or less in favor of government spending for public works are likely to avoid making the decision altogether if it seems too complicated. (3) This means that bond measures can't just count on a turnout of supportive voters, either.

POTENTIAL SOLUTIONS

Governments can address this situation by better educating their citizens about the municipal bond process, allowing them to feel comfortable making sophisticated voting decisions. But even policymakers have trouble understanding the full implications of one financing option over another, so the more reliable course may be to work on building legitimacy.

Legitimacy is the perception that an authority is entitled to the power it has--the belief that one can rely on and support the decisions of an authority figure. When government leaders are seen as legitimate, citizens are generally inclined to trust their judgment on fiscal matters. While the ideal of democracy demands efforts to educate the public on civic matters, legitimacy-induced trust...

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