Turnover, transaction costs, and time horizons : an examination of municipal debt financing
By: CLINGER, James C
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Contributor(s): FEIOCK, Richard C | MCCABE, Barbara Coyle | PARK, Hyung-Jun.
Material type: 
ArticlePublisher: Thousand Oaks, CA : Sage Publications, June 2008The American Review of Public Administration 38, 2, p. 167-179Abstract: This article explores the consequences that local government institutions and turnover among local government officials have for local borrowing. We outline how turnover affects choices in policy arenas involving public and private sector actors, long-term obligations, or future commitments. Turnover creates political uncertainty that alters the time horizons of local leaders as well as the transaction costs involved in the floating of bond issues. Empirical analysis of city borrowing patterns in the late 1980s provides evidence that turnover of council members and managers in councilmanager cities increases municipal debt burdens. However, turnover of chief administrative officers in mayorcouncil cities is associated with less city borrowing
This article explores the consequences that local government institutions and turnover among local government officials have for local borrowing. We outline how turnover affects choices in policy arenas involving public and private sector actors, long-term obligations, or future commitments. Turnover creates political uncertainty that alters the time horizons of local leaders as well as the transaction costs involved in the floating of bond issues. Empirical analysis of city borrowing patterns in the late 1980s provides evidence that turnover of council members and managers in councilmanager cities increases municipal debt burdens. However, turnover of chief administrative officers in mayorcouncil cities is associated with less city borrowing
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