The Non-Randomness of Municipal Government Reorganization: Evidence From Village Dissolution in New York

• Author: Pengju Zhang
• DOI: 10.1177/0275074019858066
• Published date: 01 November 2019
• Date: 01 November 2019
• Subject Matter: Articles

https://doi.org/10.1177/0275074019858066

American Review of Public Administration

2019, Vol. 49(8) 914 –930

© The Author(s) 2019

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DOI: 10.1177/0275074019858066

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Article

Introduction

Over the past several decades, two contrasting institutional

trends have jointly determined the local landscape of

American federalism: government formation and death.

These two trends have strongly shaped both special-purpose

and general-purpose governments. On the one hand, a dra-

matic decrease in the number of school districts has been

coupled with an astonishing increase in the use of special

districts (Berry, 2009; Duncombe & Yinger, 2007; Foster,

1997; Zhang, 2018). On the other hand, the general-purpose

municipal government system, though seeming stable on the

surface, has undergone great changes as well, especially

since the turn of the millennium. To be specific, more than

200 new cities have been formed after 2000 (Patrick &

Mothorpe, 2017), while at least 373 municipal governments

have dissolved between 1995 and 2012 (Anderson, 2012a).

Municipal government dissolution, as compared with

other government restructuring efforts such as the aforemen-

tioned special district creation, school district consolidation,

and city formation, has not been well understood, though dis-

solution activities have occurred in 39 states. A primary rea-

son for the lack of sound understanding may be that the

phenomenon has not occurred as frequently until very

recently. As suggested in Anderson (2012a), more municipal

governments dissolved in the past 20 years than did in the

100 years prior. In other words, more municipalities have

ceased to exist than in the past, and it seems that continued

dissolution efforts may come to challenge the common per-

ception that local general-purpose governments are generally

immortal or rarely die.

If municipal government formation signals prosperity

and growth in terms of population and the economy, munic-

ipal dissolution then indicates decline. However, it would

be naïve to treat dissolution simply as a symmetric reversal

of founding a new organization (Anderson, 2012b; Bauroth,

2010). Furthermore, dissolution may not randomly occur,

or put differently, not every village is a suitable candidate

for dissolution. The existing literature offers little insight

into what constitutes dissolution and when dissolution is

likely to take place, other than a handful of pioneering legal

analyses (Anderson, 2012a, 2012b, 2015). To fill this big

gap in public administration literature, this article studies

village government dissolution events in the state of New

York. New York is of particular interest as more than 50 vil-

lages, approximately 10% of all 554 villages, have unprec-

edentedly voted on dissolution, with 22 of them having

successfully passed such a referendum in the past 10 years.

858066ARPXXX10.1177/0275074019858066The American Review of Public AdministrationZhang

research-article2019

1Rutgers University, Newark, NJ, USA

Corresponding Author:

Pengju Zhang, Assistant Professor, School of Public Affairs and

Administration, Rutgers University, Newark, 111 Washington Street, CPS

322, Newark, NJ 07102, USA.

Email: pengju.zhang@rutgers.edu

The Non-Randomness of Municipal Government

Reorganization: Evidence From Village

Dissolution in New York

Pengju Zhang1

Abstract

Municipal government dissolution used to be a rare occurrence in American history and has thus far received little attention

in the literature. More than 300 of municipal governments, however, have dissolved since the mid-1990s. To understand this

emerging momentum in practice and to fill the gap in literature, this article focuses on the increasing trend of village dissolution

in New York, builds an analytical framework, and investigates the driving forces behind the possibility of dissolution, which

is measured either by the presence of any dissolution-related activity or by the passage of a dissolution referendum. Based

on a representative survey sample and a rich set of secondary data, this article consistently finds that dissolution does not

randomly occur. Rather, dissolution is more likely to be considered and approved in a village where the economy struggles,

the population declines, political trust undermines, and fiscal health deteriorates. In other words, the research suggests

dissolution may not be as appealing or take place in economically strong and politically dynamic areas.

Keywords

municipal reorganization, village government dissolution, fiscal sustainability, organizational vulnerability

Zhang 915

The state government has also been very active in advanc-

ing the elimination of village governments, offering both

legal and financial incentives to do so. This top-down sup-

port, coupled with bottom-up efforts, has driven New York

to be the pioneer in terms of restructuring villages, relative

to Michigan, New Jersey, Iowa, Illinois, and other states

where strong advocacy for reducing the number of local

governments can also be found. As a unique contribution to

the literature, the author builds a complete inventory of dis-

solution referendum cases in New York to the end of 2017,

which includes both successfully dissolved villages and

those that put the matter to a vote but were unsuccessful.

Detailed voting information is also collected and provided

in the inventory (see Tables 1 and 2).

This article synthesizes the literature, describes the legal

framework of municipal dissolution in New York, develops

an analytical framework, and seeks to identify whether there

exists any pattern or powerful driving forces behind the

emerging trend of village government dissolutions.

Specifically, it attempts to answer two empirical questions.

First, what kinds of villages are more willing to consider dis-

solution? Willingness to consider dissolution, in the context

of this study, refers to villages that seriously consider the

possibility of dissolution by undertaking specific steps such

as applying for a state government grant on dissolution,

establishing a study group to analyze the consequence of dis-

solution, holding a referendum on dissolution, or other dis-

solution related activities. Thus, the willingness to consider

dissolution includes, but is not limited to, holding a dissolu-

tion referendum. Without a single and comprehensive federal

or state list of all of such dissolution activities, the author

conducted a survey of all village mayors or financial manag-

ers in New York. The representative survey, with an approxi-

mate response rate of 42%, enables the author to

comprehensively examine the determinants of dissolution

possibility, regardless of the completion of a referendum pro-

cess or the ultimate outcome. The survey responses are then

combined with secondary demographic and government

finance data provided by the Census Bureau and the New

York State Comptroller’s Office, respectively, to identify

what kind of villages are likely to consider dissolution in a

cross-sectional setup.

Second, and perhaps more importantly, what kind of vil-

lages have eventually dissolved? Considering dissolution is

one thing, but successfully doing so via referendum is

another. In New York, village dissolution proposals must be

put on a ballot and officially approved through a referendum.

To answer this question, the author conducts a survival anal-

ysis based on a unique longitudinal village-level finance

dataset with information from 1996 to 2017. A series of

robustness checks are also conducted with different datasets

and estimation methods.

In addition to making a contribution to local govern-

ment restructuring studies, this article also adds fresh

knowledge to the cutback management literature. Public

administration studies on cutback management have exten-

sively studied cutback strategies adopted in public organi-

zations in the 1970s and 1980s (Levin, 1978). The relevant

public management literature, however, fails to consider

the life cycle organizational evolution of public organiza-

tions (Bozeman, 2010). An important reason for this may

be that most general-purpose governments are assumed to

be immortal. Thus, the recently unprecedented dissolution

practice in New York provides a natural laboratory to

examine the rise and fall of local governments from an

organizational behavior perspective, both in this research

and in future studies.

The article proceeds as follows. Section “Literature

Review on Local Government Restructuring Reforms”

reviews existing literature, which is followed by an introduc-

tion of institutional details of village dissolution in New York

in Section “Village and Village Dissolution in New York.”

Section “Village Dissolution: An Analytical Framework and

Theoretical Hypotheses” builds an analytical framework,

and Section “Empirical Methods and Data” discusses data,

empirical challenges, and strategies. Section “Empirical

Results” presents empirical results of both cross-sectional

data analysis and longitudinal survival analysis. It ends with

discussions and conclusions in Section “Discussion and

Conclusion.”

Literature Review on Local

Government Restructuring Reforms

To optimize the design of local government systems, institu-

tional designers are often confronted with a trade-off between

factors that favor larger size and others that support smaller

units. The most relevant factors discussed in the literature

include economies of scale, spillover effects, allocative effi-

ciency, administration cost, and accountability concerns

(Hindriks & Myles, 2013; Hooghe & Marks, 2009; Oates,

1972, 1993; Ostrom, Parks, & Whitaker, 1978; Treisman,

2007). The debate reflects a perennial dispute between

regionalists and localists (Foster, 1997; Jimenez & Hendrick,

2010). In reviewing the existing literature, Blom-Hansen

et al. (2014, 2016) argue that the aforementioned theoretical

debate fails to provide any clear and specific guidance over

the optimal size of local jurisdictions. First, each public ser-

vice has a unique production technology and characteristics,

leading to the possibility that there is not one optimal size but

many, one for each service that a municipality provides.

Second, what matters most is the scale effect at plant level

rather than those at firm level in local government. Thus, the

perennial debate inappropriately focuses primarily on munic-

ipality rather than the direct service providers under munici-

pal governments. Regardless of the debate between the two

schools, most scholars agree that the search for the optimal

size of political jurisdiction is not a random event, and the

focus of this paper is to explore the non-randomness feature

of government reorganization.