Government Type and the Spatial Diffusion of Local Government Policy

• In Event: Local Government Agencies

Abstract

Previous research has found that local governments are more likely to adopt policies when neighboring jurisdictions have adopted them as well (Shipan and Volden 2008; Gerber and Loh 2015; Pitt 2010; Hughes et al. 2018). In this paper we explore whether this spatial relationship between neighboring local governments is moderated by local government type, specifically exploring whether special districts are more likely to adopt policy when nearby special districts have done so than when neighboring general purpose governments (municipalities and counties) have adopted the same policy. Similarly, we explore whether general purpose governments are more likely to be influenced by general purpose governments than special districts.

Special districts are the most common form of local government in the United States, but despite a growth in understanding of how and why special districts form, there still remains much we don’t know about the influence of their proliferation on policy decisions. The policy diffusion literature has long shown that governments, including local governments, spread innovations to their neighbors. These innovations often bring benefits to local economic development, citizen welfare, and the protection of the environment. When services are provided by specialized local governments, however, do innovations spread in the same way? Different forms of local government may share different networks, recognize different regional competitors, and view nearby governments of the same type as more policy relevant examples to potentially follow. We argue that this will lead them to be more likely to adopt the policies of their neighbors when those neighbors are of the same government type.

We explore this possibility by looking at local government water rates. Water rates are an ideal policy area to explore this question for a number of reasons. First, while the vast majority of water utilities in the United States are public, there is a great deal of variation in type of local governments that own and operate them. Many utilities are owned and operated by special districts. Second, utility rates are a good area to explore the spread of policy. There is a great deal of variability in the types of rates set among utilities. Some utilities adopt rates that are conservation oriented and progressive, in that they charge higher prices for customers who use more water (Switzer 2020). Additionally, utilities have to tackle water affordability for their poorest customers, and there is also a significant amount of variation in the affordability of water rates (Teodoro and Saywitz 2020). The variation among governments and policy choices allows us to examine how the policy choices of neighbors is associated with the choice a special district or general purpose government makes.

We explore how neighboring rates among local governments influence each other in two ways. First, in order to establish that utilities are indeed making direct comparisons with each other, we perform an analysis of utility rate studies and reports. These local government documents often contain direct comparisons with rates of surrounding utilities. Our expectation is that rate studies/reports of special districts will more frequently mention other special districts when making these comparisons, while general purpose governments will mention general purpose governments. Second, using an original dataset containing water rates data for every public utility serving 40,000 or more residents, we will perform a spatial statistical analysis that looks at whether the rate structures, conservation orientation, and affordability of special districts in the United States are more influenced by other special districts than general purpose governments, and vice versa. The results will carry important implications for literatures on local government, policy diffusion, and water policy.

Authors

• David Switzer, University of Missouri

• Robin Rose Saywitz