Poster Paper: Regional Government Structure and the Distribution of Public Investment

Saturday, November 5, 2016
Columbia Ballroom (Washington Hilton)

*Names in bold indicate Presenter

Yeokwang An, University of Southern California and Raphael Bostic, Federal Reserve Bank of Atlanta

In the United States, regional governments are responsible metropolitan area policymaking along a wide variety of policy areas, including economic development, land use, resource management, transportation, and emergency preparedness.  There is a longstanding and on-going debate about about whether one should observe more efficient delivery of public goods where there is fragmented governance or centralized, more coordinated governance. On one hand, regional governments are supposed to prioritize and maximize the interests of the region as a whole for the use of collective funds from federal, state, and local. On the other hand, local members of the regional body have incentives to pursue their own interests. Noting the conflict of these interests, scholars supporting the framework of institutional collective action (ICA) argue that proper institutional arrangements can promote incentives for self-interests while lowering transaction costs for coordination so that regional governance works more effectively.

One dimension that has not been explored in the context of regional governance is the power of local actors within the regional governments. Scholars have noted that rational choice theory does not offer clear answers about how power fits into an institutional model of decision-making (Moe 2005) and the political process may give rise to institutions that benefit some actors but are coercive for others, depending on who has the power (Ostrom et al. 1988; Moe 2005). Even some researchers supporting the ICA framework claim that regional governance may be better understood by the uncovering power relationships, above and beyond considerations of competition and coordination mechanisms (Jones 2009).

This paper explores the link between power and the distribution of public investment in regional governance by studying the metropolitan planning organizations (MPOs) that plan and allocate region-wide public investment on transportation. Rules for which jurisdictions place members on MPO governing boards vary across MPOs, meaning that power relationships among board members and across jurisdictions do as well. We measure the degree of power held by each member of an MPO’s governing board using the Shapley-Shubik index (1954). Then, using detailed transportation expenditure data of MPOs in Texas that includes spatial information on projects and the roster of governing board membership of the MPOs during 2001-2010, we develop and test three hypotheses.

  • Local governments with more power on the governing board should see more resources flow to their jurisdiction.
  • As power becomes more evenly distributed, a more even distribution of resources should be observed because fewer members can exercise power.
  • Exercise of power should be positively associated with the ease of coalition-building among governing board members.

By examining how regional governments distribute public investment given power relationships and whether the objectives of the few with more power are prioritized over the objectives of the region as a whole, our results will have broader implications on regional policymaking and governing processes, which will inform discussions of reform of the structure of regional government to improve outcomes.