The rise of specialized governance in American federalism: Testing links between local government autonomy and formation of special district governments

Abstract

In this article, I investigate whether the growth of special districts in the fifty states from 1972 to 2002 can be explained by choices made by local general-purpose governments in response to different degrees of government autonomy in the fiscal, institutional, and political system. Focusing on three dimensions of government autonomy-local government capacity, local government discretion, and local government importance-I find that the growth of certain types of special districts is in part a response to state laws constraining government autonomy of generalpurpose governments. The findings also suggest that reliance on special districts by local generalpurpose governments would decrease if they had stronger own-source revenue-raising capacities andmore diversified tax revenue bases. In contrast with prior studies, the analysis provides limited evidence to support the notion that special districts are formed by general-purpose governments to circumvent fiscal restrictions, such as debt limits and tax and expenditure limitations.