Pragmatic Municipalism: U.S. Local Government Responses to Fiscal Stress

• Published date: 01 May 2021
• Author: Mildred E. Warner,Austin M. Aldag,Yunji Kim
• Date: 01 May 2021
• DOI: http://doi.org/10.1111/puar.13196

Research Article

Local Government Responses to Fiscal Stress 389

Abstract: This article updates cutback management theory and challenges austerity urbanism theory by showing that

local governments practice pragmatic municipalism—protecting services with a balanced response to fiscal stress. Using

a 2017 national survey of 2,341 U.S. municipalities and counties, the authors identify four responses—no specific

action, cuts, revenue supplements, and deferrals. Structural equation models show that cuts are higher in places with

older infrastructure and more unemployment but not in places with more poverty. Supplemental responses are higher

in places with professional management and higher education. Deferrals are higher in places with more debt but lower

in places with older infrastructure. Localities with less fiscal stress take no specific action. Most governments combine

cuts, supplements, and deferrals; this balanced response is associated with more fiscal stress, more citizen engagement,

and higher levels of unionization. These results show that local governments practice pragmatic municipalism, not

austerity urbanism, when responding to fiscal stress.

Evidence for Practice

• Local government managers practice “pragmatic municipalism” by employing balanced responses to fiscal

stress—cuts, deferrals, and revenue supplements.

• Local governments that engage both citizens and unions are more likely to practice balanced responses to

fiscal stress.

• Council-manager governments focus on cuts and revenue supplements but not maintenance deferrals.

• Cuts are not greater where poverty is higher, as austerity urbanism claims.

• Responses to fiscal stress follow a continuum: no action from governments with no stress; a balanced,

pragmatic municipalism approach from the majority; and predatory action only in extreme cases.

How do local governments respond to fiscal

stress? Changes in economy, demography,

and state policy have created new challenges

for local governments (Aldag, Kim, and Warner 2019;

Kim and Warner 2018a; Martin, Levey, and Cawley

2012; Nalbandian et al. 2013; Pagano and Hoene

2010; Rubin 2015; Wolf and Amirkhanyan 2010)

and highlight the need to renew studies of cutback

management (Bozeman 2010; Pandey 2010; Rubin

2015). Cutback management theory recognized the

importance of strategic management (Jick and Murray

1982; Levine 1978) and environmental constraints

(Downs and Rocke 1984), but it stopped short of

developing a robust theory about the environmental

constraints on public organizations (Pandey 2010)

and their potential for public engaging responses

(Denhardt and Denhardt 2000; Nalbandian et al.

2013).

Since the Great Recession, some geographers have

proposed an austerity urbanism theory that argues

that public managers are vulnerable to political

pressures from for-profit businesses and state-level

actors favoring austerity (Donald et al. 2014; Lafer

2017; Peck 2014). Older public administration

theories described managers as implementing

incremental change or “muddling through” (Lindblom

1959) to solve problems, but recent scholars see a

dramatic shift in local government behavior toward

austerity by cutting services and personnel and/or

increasing user fees (Martin, Levey, and Cawley 2012;

Scorsone and Plerhoples 2010). Others see a more

complex and pragmatic response of expenditure and

revenue strategies that varies across places (Aldag,

Kim, and Warner 2019; Davidson 2019; Jimenez

2013; Kim and Warner 2016, 2020; Lobao and Adua

2011; Nelson and Balu 2014; Xu and Warner 2016).

For example, Warner and Clifton (2014) identified a

range of responses from “hollowing out” to “pushing

back.” What explains these different responses?

Empirically, research on local government responses

to the Great Recession has focused on large urban

cities (e.g., Detroit) with narrow measures of

Mildred E. Warner

Austin M. Aldag

Cornell University

Pragmatic Municipalism: U.S. Local Government Responses

to Fiscal Stress

Seoul National University

Yunji Kim

Yunji Kim is assistant professor in the

Graduate School of Public Administration,

Seoul National University (Korea). Her

research focuses on how local governments

collect revenues and deliver services within

the constraints of demography, economy, and

state policy, and how thosechoices shape

community well-being. More information can

be found at www.yunjikim.com.

Email: yunjik@snu.ac.kr

Austin M. Aldag is a doctoral student

in the Department of City and Regional

Planning at Cornell University. His research

focuses on local governance, service

delivery, federalism, and intergovernmental

relations. His research has appeared in the

Journal of Public Administration Research &

Theory

,

Publius: The Journal of Federalism

,

and

Local Government Studies

.

Email: ama296@cornell.edu

Mildred E. Warner is professor in the

Department of City and Regional Planning

at Cornell University. Her research focuses

on local government finance and service

delivery and local economic development,

environmental, and social policy. Her

current research looks at state policy,

responses to fiscal stress, privatization and

remunicipalization, and the links between

planning and public health. Her website is

www.mildredwarner.org.

Email: mwarner@cornell.edu

Public Administration Review,

Vol. 81, Iss. 3, pp. 389–398. © 2020 by

The American Society for Public Administration.

DOI: 10.1111/puar.13196.