Abstract
The state and local governments throughout the United States interact within a complex system of multilevel governance to advance sustainability. However, we know little about what this hierarchical system of exchanges means for municipalities as they work to achieve energy efficient government operations. Drawing on a perspective of “contested federalism”, we examine how the transaction costs of state–local government relations affect the efforts of U.S. cities to lead by example and promote sustainability within their internal processes. We apply a Bayesian item response theory approach to assess the effects of state-level fiscal and policy interventions on municipal commitments to energy efficiency programs within their internal operations. Our findings suggest that increased fiscal support for state energy programs enhances municipal commitments to government focused energy efficiency. We also find a positive connection between state energy efficiency standards and municipal efforts to enhance energy efficiency within their internal operations. The alignment of state resources and policy efforts with municipal actions can reduce commitment and agency costs that obstruct policy outcomes. The findings speak to the importance of multilevel governance exchanges in municipal efforts to become leaders in sustainability.
Highlights
This article begins to fill this gap in understanding by asking: What are the effects of state intervention on municipal commitments to LBE? We address this question by drawing upon a theoretical lens of “contested federalism” that explains how political transaction costs can shape how state institutions facilitate or impede municipal sustainability
We propose that when states provide municipalities with more resources and authority, uncertainty will become lower, which will produce lower transaction costs for municipal sustainability commitments
Our findings suggest that state government resources can reduce local government transaction costs, enabling municipalities to strengthen their commitments to sustainability actions
Summary
U.S state and local governments often interact to promote environmental sustainability within a complex system based upon multilevel governance exchanges. This hierarchical state–local government relationship is one based upon regulation, cooperation, and transactions, where actors either coordinate or collide around policy issues [1]. Within this relationship, states through their laws and fiscal involvement have been shown to play a vital role in municipal government sustainability actions [2,3]
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