Sustainability Synergies or Silos? The Opportunity Costs of Local Government Organizational Capabilities

• Published date: 01 November 2020
• Author: Aaron Deslatte,Eric Stokan
• Date: 01 November 2020
• DOI: http://doi.org/10.1111/puar.13237

1024 Public Administration Review • No vember | D ecember 2 020

Public Administration Review,

Vol. 80, Iss. 6, pp. 1024–1034. © 2020 by

The American Society for Public Administration.

DOI: 10.1111/puar.13237.

Sustainability Synergies or Silos? The Opportunity Costs of

Local Government Organizational Capabilities

Abstract: Public managers serve many sovereigns, work within fiscal constraints, and face competing demands for

finite resources. This article applies a strategic management lens to local government sustainability capabilities to

examine the conditions under which local governments diversify into new areas of service delivery and when they do

not. Building on recent efforts to apply resource-based theories to the public sector, the authors distinguish between

more and less fungible capabilities and posit that local government officials make such commitments to enhance

the competitiveness of their communities. Two surveys of U.S. cities provide evidence that governments that rely on

tax incentive-based development approaches may struggle to make sustainable development gains. Such cities are

more likely to devote resources disproportionately to delivering benefits to firms at the risk of incurring increasing

opportunity costs over time. Prior commitments to traditional, firm-based economic development capabilities appear to

inhibit their ability to pursue broader sustainability policies. However, economic development strategic planning can

also positively influence some investments in greenhouse gas reduction efforts. Moreover, cities facing more competition

for development are more likely to integrate planning and performance measurement to assess their sustainability

commitments.

Evidence for Practice

• Local governments can make sustainability gains by identifying fungible organizational capabilities that can

be more easily reassigned to similar functions.

• Strategic planning that involves both economic development and sustainability efforts can identify more

avenues for leveraging existing capabilities.

• Cities located in more competitive markets for economic development should devote greater attention to

performance measurement and management to justify investing resources in sustainable development efforts.

• Overreliance on tax-incentive-based economic development strategies, which often drain communities of

resources, can impair broader commitments to sustainable development.

By delegation or default, local governments

have become a front line for many of today’s

most pressing societal challenges, from

infrastructure upkeep and community development

to climate change mitigation and adaptation (Bai

et al. 2018; Fiorino 2010; Yi et al. 2018). Local

government managers serve many sovereigns, work

within fiscal constraints, and face competing demands

for finite resources (Wildavsky 1997). Wittingly or

not, public managers forgo potentially beneficial

opportunities when they make resource allocation

decisions (Elston and Bevan 2019). This is the gist of

strategic management, a process that spotlights the

risky business of such resource allocations. A growing

literature on local governance has considered why

cities are becoming more engaged in sustainability-

related issues, linking these choices to prestige,

federal inaction, electoral and community co-benefits

(Bodini, Bondavalli, and Allesina 2012; Krause 2011;

Mazmanian and Kraft 2009; Svara, Watt, and

Jang 2013; Swann and Deslatte 2018). However, the

strategies for how governments reallocate resources to

carry out these policies is less understood (Deslatte

and Swann 2019; Hughes 2019).

This article applies a strategic management lens

to local government sustainability activities and

posits that policy makers and managers make such

risk calculations to distinguish their organizations

and enhance the appeal and competitiveness

of their communities to potential residents or

firms (Audretsch 2015; Besanko et al. 2009;

Schneider 1989). Normatively, sustainability

emphasizes balancing the ecological, economic,

and social equity impacts of policies and actions.

Practically, it can entail a sizable commitment of

time, energy, and financial resources (Deslatte and

Swann 2017). Sustainability has also taken on a more

Aaron Deslatte Eric Stokan

Indiana University University of Maryland

Eric Stokan is assistant professor of

political science at the University of

Maryland Baltimore County. His research

focuses on understanding local government

decision-making, policy processes, and

evaluating the impact of policy decisions.

Email: estokan@umbc.edu

Aaron Deslatte is assistant professor and

director of the Metropolitan Governance

and Management Transitions Lab at Indiana

University Bloomington. His research

focuses on the roles that public managers

play in enhancing economic, environmental,

and social sustainability at the local and

metropolitan scales.

Email: adeslatt@iu.edu

Research

Symposium:

Advancing

Government

Quality through

Capacity and

Competitiveness