Association for Public Policy Analysis & Management

Organizational performance is of special importance in the public sector. Existing research identifies numerous internal and external factors that can influence how organizations perform. At the same time, organizational forms and approaches that are utilized in service provision are increasing in both scope and complexity. In particular, scholars note the proliferation of polycentric approaches to governance at the local government level. In the context of drinking water provision, functional fragmentation and the reduced scope of many special water districts may mean that these organizations lack the capacity to face service delivery pressures and therefore underperform. Performance quality of water utility districts can be classified into two broad classes--(1) health violations, which occur when the water supply contains contaminants in excess of regulatory limits or mandatory treatment techniques are not implemented; and (2) management violations, which occur when water systems neglect to follow monitoring and reporting requirements.

We use the case of water provision in the state of Texas, which exemplifies the jurisdictional fragmentation that increasingly characterizes local public service provision. The data we collected are from the Texas Water District Database, which contains administrative records on over 2,000 water districts in the state. These data include dates when each district was formed, the particular statute under which a district was incorporated and related institutional characteristics of the district (e.g., size, service population, ability to issue debt and levy taxes), and service delivery tasks in which the district is engaged. We matched water district data to Safe Drinking Water Act monitoring data obtained from the U.S. Environmental Protection from 2000 to 2015; these data contain records for every regulated drinking water provider in the state, allowing us to assess managerial and health performance standards. We estimate hierarchical Bayesian regression models to model how organizational capacity and institutional characteristics, conditional on environmental constraints, interact to influence organizational performance.

This study demonstrates the importance of organizational capacity for organizational performance (or failures to perform) in polycentric governance systems. Special districts are often touted as a means for more flexible, localized, and customer-oriented public service provision; however, the limited size and scope of special districts might also mean that they are constrained in their ability to perform at acceptable (safe) levels. By examining how organizational capacity in polycentric governance systems relates to objective organizational performance outcomes, this study speaks directly to how the increased role of special districts impacts service delivery quality at the local levels.