Principal investigator: Bruno Benevit
Original title: The Impact of Court-Ordered District Elections on City Finances
Author Richard T. Boylan
Location of the Intervention: United States
Sample Size: 1.724 municipalities
Sector: Public Sector Economics
Primary Variable of Interest: Allocation of public spending
Type of Intervention: District election
Methodology: DID
Summary
Institutional arrangements influence how public management is executed. In this sense, electoral rules are crucial both for the representation of the population and for how public resources are allocated. To assess how transitions from general to district elections affect public management, this study examined reforms to municipal council elections implemented by courts of justice in the United States since the 1970s. Although these reforms were implemented with the aim of improving minority representation, the results revealed that such reforms induced the occurrence of a common bottom line problem, namely, cities that adopted district elections increased their spending in areas outside of infrastructure. The article also suggests that this change may be lasting, highlighting the potential conflict between the objectives of equal representation and efficient governance.
- Policy Problem
The institutional arrangement plays a central role in public management, defining the rules and mechanisms by which political decisions are made and how resources are allocated. The form of election directly influences both the representativeness of voters and the efficiency in the allocation of public resources, and can occur, among other forms, in a general format (at-large) or district-based. In general elections, all city voters vote to choose all council members. In this modality, there is a tendency for representatives to focus on policies of broader interest. In district elections, representatives are elected by specific districts and therefore tend to focus more on the demands of their regions, which can increase local representation but also lead to distributive conflicts within the city (BOYLAN, 2019).
Among these conflicts, the common underlying problem represents one of the potential conflicts fostered by the district election format. According to the author, when municipal council members are elected by districts, they tend to value the benefits of public spending in their areas more than the total costs to the city (BOYLAN, 2019). This occurs because each representative internalizes only a fraction of the total spending costs, but receives the full benefits for their district. Representatives have an incentive to promote more spending in their regions, which can lead to an increase in public spending, especially in areas outside of infrastructure, such as various public services.
Thus, the adoption of district elections can have lasting effects on public administration. These effects may differ when such a format is imposed by judicial decisions to correct electoral inequalities, since the reasons for imposing these decisions may be associated with distinct institutional aspects of localities that have voluntarily adopted district elections. This reflects both a possible conflict between the objectives of greater political representation of minorities and efficiency in public administration, as well as the role of electoral institutions in defining these dynamics. Therefore, it is important to balance the pursuit of equitable representation with the need to avoid excessive spending resulting from the common underlying problem.
- Policy Implementation Context
The institutional chronology of elections in the United States was heavily influenced by the struggle for civil rights, seeking to broaden the participation of minorities in the electoral process. In 1964, only 38% of the Black population of voting age in the Southern states was registered. This low turnout was due to local and state policies that prevented voting, such as literacy tests. The Voting Rights Act of 1965 prohibited many of these practices, resulting in a significant increase in the number of Black voters. In response, some cities altered their electoral rules to maintain political control, transforming district elections into general elections. From 1975 onwards, this movement began to be challenged in court, with courts beginning to declare general elections unconstitutional in municipalities with a history of discrimination against minorities.
In this context, the adoption of district elections in American municipalities could occur in two ways: voluntarily or by court order. In the case of cities where district elections were judicially mandated, the objective was to correct discriminatory practices that, through general elections, prevented minorities from having proportional representation on municipal councils. Conversely, there were cases where cities adopted district elections voluntarily, as a way to anticipate demographic changes or reform local administration, often motivated by the fear of future judicial interventions. Although the mechanisms were distinct, both cases resulted in the implementation of district electoral systems, directly affecting the composition of councils and the distribution of power.
In the study, cities were categorized according to their demographic, economic, and regional characteristics. Cities that maintained general elections tended to show greater growth in median income and were located primarily outside the southern United States, where there was less judicial pressure. Conversely, cities that adopted district elections by court order generally had larger Black populations, were located in southern states, and experienced lower economic growth. This regional and socioeconomic differentiation highlights the heterogeneity of these municipalities, indicating distinct effects of electoral reforms on the level of public spending and the distribution of resources among different types of cities.
- Evaluation Details
This study was based on a database of 1.809 cities that at some point elected members of their municipal councils through general elections between 1965 and 1974. In this sample, the first adoption of district elections occurred only in 1973. Additionally, it was verified whether these cities adopted district elections until 2002 and whether this adoption was imposed by court order or adopted voluntarily. For the analyses, the main variable of interest considered whether the majority of council members came to be elected by districts.
The process of enforcement via court order refers to interventions by court order, settlement agreements, or actions of the U.S. Department of Justice in cities covered by Section 4 of the law. Voting Rights ActVoluntary adoptions of district elections were also taken into account, although they often occurred under the implicit threat of legal action or in the face of the threat of future loss of representation by the white population (TREBBI; AGHION; ALESINA, 2008).
The metrics used by the author to assess the impact of district elections focus on the variation in municipal spending between 1977 and 2002, using fiscal data from... US Census of State and Local FinancesThus, expenses related to infrastructure, non-infrastructure, police, fire departments, highways, health and social assistance, utilities, and others were observed. Cities that had public services, such as hospitals and electricity utilities, often presented very volatile expenses, which made direct comparison with other cities difficult. To reduce the volatility in the expenditure data, the author adjusted the numbers by subtracting expenses for electricity and hospitals, given that these expenses represented a significant portion (more than 80%) of the current expenditures of some cities. State-level expenditure data were also considered as a robustness test, in addition to other demographic measures of the cities according to census data from 1970 to 2010.
- Method
To analyze the impact of district elections on municipal spending, a model was developed using a dependent variable that captured the variation in per capita spending between 1977 and 2002 in logarithmic terms. As an explanatory variable, an indicator was considered for cities that had adopted district elections by 2002. In addition, control variables included changes in population, median income, and the proportion of the black population during the period.
In addition to the baseline model, a percentile-based model was used, comparing cities with similar spending levels over the period, aiming to capture differences in spending behavior. Furthermore, an analysis was also conducted considering the timing of the adoption of district elections, differentiating between cities that had implemented the system before and after 1986, the year in which legal changes altered the conditions of discrimination faced by minorities in electoral contexts.
The study also presents a series of robustness tests to investigate possible omitted variables that could influence the results. First, the hypothesis that progressive policies already in place in the cities studied could have anticipated changes in electoral rules was evaluated. To this end, the variation in per capita spending between 1967 and 1977 was analyzed. Additionally, it examined whether judicially imposed district elections, less influenced by progressive agendas, impacted spending. Another analysis considered the hypothesis that advances in civil rights for minorities explained the increase in spending, using proxies The study examined factors such as school desegregation plans, changes in electoral participation, and residential segregation. The author also tested whether the demand for increased non-infrastructure spending, common among cities within the same state, could be correlated with district elections. Thus, state spending was analyzed as an external variable.
Finally, the analysis used the semiparametric difference-in-differences (DID) estimator, weighting control cities based on the probability of adopting district elections as a function of their characteristics. The model considered as selection variables the proportion of the Black population in 1977, whether the city was under the jurisdiction of Section 4, and population growth, income growth, and growth of the Black population. The impacts of district elections and court-ordered elections on non-infrastructure spending were examined, comparing allocations between categories such as fire protection and roads.
- Main results
The results of the main analyses indicated that district elections increased non-infrastructure municipal spending by 9,1%. According to the author, this spending indicated an adjustment in cities that initially had lower expenditures. In 1977, cities with court orders spent 10% less than cities with general elections, although they reached similar levels in 2002, even with a drop in median income. Furthermore, when evaluating spending in percentiles, it was observed that district elections raised the percentile position of cities by 6 points, confirming that such elections boosted non-infrastructure spending.
Regarding robustness tests, the results showed that district elections increased municipal spending unrelated to infrastructure. The model using percentiles indicated that these elections raised the position of municipal spending by 6 percentage points. When comparing cities that adopted district elections before and after 1986, an 11% increase in spending was observed for those adopting the system before and 6,8% for those adopting it after, although without a statistically significant difference.
Regarding robustness tests related to the potential impacts of pre-existing social issues and progressive agendas, the results indicated that the impact of district elections on spending is related to how council members are elected, aligning with the common background problem or the representation of minorities on the council.
Regarding the DID model estimates, the evidence indicated that district elections increased non-infrastructure-related municipal spending. Furthermore, the results showed that court-ordered and non-court-ordered district elections had similar impacts on overall spending, but allocated resources differently, with greater emphasis on fire protection and less on highways. Spending on health and social assistance was less affected, possibly due to the smaller sample size and the administration of these programs at the state level.
- Lessons in Public Policy
In this article, the author analyzed the effects of district elections on municipal spending, using various empirical approaches to assess how the change in the electoral system impacts the allocation of public resources. The results indicated that district elections increased non-infrastructure spending and altered its composition, prioritizing categories such as fire protection over investments in highways. Additionally, the observed effects were consistent in both cities that adopted the system by judicial imposition and those that made the transition voluntarily.
The evidence from this study provides important insights for the formulation of public policies, highlighting the role of the electoral system in the management of public spending. Considering the relevance of budgetary decisions to the well-being of the population, policies that promote more efficient resource allocation planning can be developed based on the identified impacts of district elections.
References
BOYLAN, RT The Impact of Court-Ordered District Elections on City Finances. The Journal of Law and Economics, v. 62, no. 4, p. 633–661, nov. 2019.
TREBBI, F.; AGHION, P.; ALESINA, A. Electoral Rules and Minority Representation in US Cities *. Quarterly Journal of Economics, v. 123, n. 1, p. 325–357, Feb. 2008.
