This article draws on public administration theory in order examine the implementation challenges of, and potential avenues of non-compliance with, Texas’ Model Subdivision Rules (MSRs). Passed in 1989, the MSRs sought to prevent the spread of informal colonia settlements with inadequate or non-existent infrastructure throughout the Texas border region by making the distribution of state funding for infrastructure upgrading in economically depressed areas contingent upon the adoption of more stringent land use regulations by county and city governments. A landmark piece of legislation in Texas, the success (or failure) of the MSRs has received no comprehensive theoretical or empirical attention by scholars.

After a brief introduction to the existing literature on colonias, a Logic of Governance framework is used as a heuristic to highlight the actors involved in oversight and implementation of the MSRs. This analysis illustrates how implementation of the MSRs represents a classic Principal-Agent problem in which the principal (the state legislature) must oversee the actions of multiple agents across multiple tiers (three state-level agencies and dozens of local governments). A lack of verifiability and the presence of contradictory preferences illustrate how moral hazard might lead to non-compliance with the MSRs. Because implementation of the MSRs occurs via a set of “procedural” agencies, in which only government outputs (recorded plat (i.e. subdivision) maps) rather than outcomes (actual on-the-ground infrastructure conditions in subdivisions) are easily measured, formal institutions (rules) may not be sufficient to prevent non-compliance and thus informal institutions (norms and values) also merit consideration a potential policy lever. Drawing upon these insights, I highlight the policy implications of the model and suggest potential instances of non-compliance with the MSRs.