Local Government Type and Municipal Bond Ratings: What's the Relationship?

29 Pages Posted: 11 Apr 2016 Last revised: 4 Oct 2016

See all articles by John A. Dove

John A. Dove

Troy University - Manuel H. Johnson Center for Political Economy

Date Written: October 1, 2016

Abstract

There is an extensive literature analyzing the executive branch within local U.S. government jurisdictions. This has largely revolved around the differences between elected mayors and appointed city managers. Much of the academic work has considered the potential efficiency gains that may be associated with either form of government and comparative analyses between the two. However, the empirical literature has been divided regarding the relative efficiency of either form. This paper attempts to add to that literature by considering how bond markets may perceive potential efficiencies that emerge from one executive type over the other by evaluating bond ratings for a sample of large municipal governments in the U.S. Overall, the results suggest that municipalities headed by a city manager are associated with increased bond ratings (and thus lower borrowing costs), which may lend support that this form of administration is, on some margin, relatively more efficient than others. These results are robust to a number of specifications.

Keywords: City managers, city mayors, bond ratings, public administration, local government

JEL Classification: D73, D78, H73

Suggested Citation

Dove, John A., Local Government Type and Municipal Bond Ratings: What's the Relationship? (October 1, 2016). Applied Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2761051 or http://dx.doi.org/10.2139/ssrn.2761051

John A. Dove (Contact Author)

Troy University - Manuel H. Johnson Center for Political Economy ( email )

Bibb Graves Hall
Troy, AL 36082
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
62
Abstract Views
362
rank
348,709
PlumX Metrics