Local Government Behavior Research Articles

Strategic States: The Congressional Roots of Federal Grant Applications

Abstract While a large body of research explores the federal-level influences over distributive politics decisions, very little attention has been given to the active role state and local governments play in the geographic distribution of federal funds. Before presidents, legislators, and agency leaders can influence the selection of federal grants, state and local governments must expend time and resources to submit grant proposals. We focus on grant applications as our unit of analysis and advance a theory that congressional representation influences the grant application behavior of state and local governments. We analyze US Department of Transportation grant applications and awards from 2009 to 2022 and find evidence that congressional representation meaningfully influences state-level grant application behavior. States apply more aggressively for federal transportation grants when represented by senators in the Senate majority party, and states apply more efficiently for grants when represented by a senator holding an advantageous committee leadership post.

Does funding sources’ regulation affect Chinese local governments’ financing behavior?

In China, where urban investment and development companies (UIDCs) established by local governments have issued an excess of urban investment bonds (UIBs), the central government has sought to reduce risk in the UIB market. In empirical testing, we specifically examined how restrictions on UIDCs’ use of land revenues have affected the financing behaviors of local governments. Our results revealed that, following the restriction, the issuance of UIBs dropped, whereas the issuance of local bonds rose, which indicates that the regulation indeed improved local governments’ financing behaviors.

Spatiotemporal evolution and development path of healthcare services supply in China

ObjectPromoting the accessibility and equity of healthcare services, as well as enhancing service capacity, are crucial for building a sound healthcare system. Particularly in the past two years of the normalized COVID-19 situation, this issue has garnered widespread attention in the academic community. This study aims to investigate and analyze the characteristics and trends of the spatial-temporal evolution of healthcare service supply levels in China. It also seeks to explore the influencing factors and pathways for development, with the goal of optimizing the allocation of healthcare resources.MethodsThis article uses the entropy weight TOPSIS method combined with Dagum Gini coefficient and Kernel density to evaluate the supply level of healthcare services in 31 provinces and cities in China from 2012 to 2020, and explores its development and spatial pattern characteristics. Then, through Moran index, panel regression model and spatial econometric testing, the spatial correlation problem and its influencing factors are further analyzed, and targeted policy recommendations are proposed based on it, laying the foundation for further promoting the balanced development of healthcare service supply capacity.Results(1) Healthcare services supply levels in various provinces and cities in China have significantly increased, with a shift in spatial distribution from ‘higher in the east and lower in the west’ to ‘convergence between east and west, with lower levels in the central regions.’ (2) Relative differences among regions are narrowing annually, primarily due to interactions between the four regions rather than within each region, with expanding impact of overlapping regions. (3) Absolute differences among regions are also decreasing, moving towards uniformity with a contraction of extension and a restraint on the trend towards multipolarization. (4) Spatial correlation between adjacent regions is weakening, eventually becoming non-significant, with fading spatial effects. (5) The correlation between local economic development, population factors, institutional arrangements, and the current state of supply is significant, and the research design and conclusions remain robust even after thorough consideration of spatial effects. The study explores the development pathways based on the objective existence of regional development and the controllable government actions.ConclusionThe overall level of healthcare service supply in China has improved, but regional differences still exist. The objective level of regional development and the subjective behavior of local governments have a significant impact on the supply of healthcare services. Therefore, it is recommended that each region adapt to local conditions, identify its own strengths and weaknesses, coordinate resource supply and demand, consider the impact of key factors, and optimize the allocation of healthcare development resources.

Financing urban land development in underdeveloped small cities in western China: The role of earmarked funds

Previous studies suggest that market forces and the strategic behavior of local governments regarding land development jointly contribute to rapid urban expansion in China. In underdeveloped small cities in Western China, the market is weak, and local governments lack the conditions required to promote land-centered urbanization. Surprisingly, these cities have experienced an expansion of urban space faster than the national average. This study presents a significant funding model of urban land development within the framework of the project system. Within this model, central and provincial governments are key providers of land development funds. Local governments design, apply for, package, and implement land development projects. Private developers cooperate with local governments rather than functioning as real initiators of and investors in land development projects. The findings provide new and supplementary evidence about how rapid urban expansion occurs in China, particularly in underdeveloped areas.

Local government debt and firm’s outward foreign direct investment

PurposeThe purpose of this study is to provide evidence that government financing behavior has an impact on the outward foreign direct investment (OFDI) of enterprises.Design/methodology/approachThis paper uses debt data from local government financing vehicles to measure the local government debt in China. Based on the data of listed manufacturing firms in China from 2010 to 2018, this paper uses the Tobit model to verify the impact of local government debt and firms' OFDI.FindingsThe results indicate that local government debt impedes firms' OFDI, with a more pronounced impact on state-owned enterprises (SOEs) and those with higher political connections. Furthermore, our study suggests that the dampening effect of local governments on firms' OFDI is mitigated in regions following the implementation of the Local Government Debt Management Act.Originality/valueThis study verifies the negative impact of local government debt activity on firms' overseas investments. This is not due to debt crowding out, but rather to the fact that local governments prefer to keep resources locally to stimulate the economy. This paper offers novel insights into the theoretical mechanisms by which local government behavior influences firms' investment activities in emerging markets.

Local government land monopoly in China: the influence of residential land price on supply

ABSTRACT China’s current land system allows local governments to monopolize land supply, and such monopolist power induces local governments to distort the residential land supply in line with their own interests. This paper uses an overlapping generation model to depict the profit maximization behavior of local governments. The theoretical model suggests that local governments in cities with strong economic conditions would face a lower magnitude of price elasticity of demand and would choose a higher residential land price corresponding to a lower residential land supply to achieve profit maximization. To empirically evaluate the theoretical model, the paper adopts Instrument Variable (IV) estimates and investigates data collected from 142 prefecture-level cities between 2010 and 2020. It suggests there is a negative causal relationship between residential land prices and per capita residential land, thus validating the theoretical model that local governments prioritize profit maximization over meeting the local population’s housing demands.

How Public Service Investment Affects Public Incomes: Evidence from Shanghai, China

The fiscal incentive of public investment has a profound impact on the behavior of local governments. This paper uses Shanghai, China, as a case study to explore the fiscal incentive mechanism of public service investment through heterogeneity analysis and mechanism analysis, utilizing district data from 2005 to 2016. The results reveal three key findings. First, the incentive mechanism of public investment is different between budgetary revenue (BR) and land transferring fee (LTF). The incentive effect on BR is driven by the amount of public investment rather than the quality of public service delivery, failing to effectively motivate local governments to consistently improve public service quality. Second, while the fiscal incentive effects of public investment in central districts rely more on BR, suburban districts are more dependent on land finance. The high dependence on land finance makes local governments tend to pay more attention to the needs of the companies rather than citizens. Third, the proportion of the migrant population and fiscal stress weaken the association between public investment, BR, and LTF but strengthen the link between the quality of public service delivery and LTF. Conversely, the existing stock of public service resources has the opposite effect.

One region's gain is another's loss: The impact of market segmentation on renewable energy development in China

Current research has focused on the effects of policy and economic factors on renewable energy (RE) development but has ignored the effects of market segmentation. We developed a two-stage Cournot equilibrium model to explore the relationship between the market segmentation behaviors of local governments and their effects on RE development. We empirically tested the spatial effects of market segmentation by using a spatial Durbin model based on panel data of Chinese provinces from 2006 to 2020. The results are as follows. (1) There are positive spatial dependences among the RE development in the provinces. Most provinces show a “high-high” or “low-low” spatial agglomeration pattern. (2) Market segmentation caused by local protection can promote local RE development but significantly inhibits the development of RE in neighboring regions, i.e., one region's gain is another's loss. The inhibition is much greater than the local development, thus hindering overall RE development. (3) Regions with more stringent environmental regulations have greater incentives to adopt the market segmentation strategy in order to promote local RE development. (4) Market segmentation can increase the degree of local capital and labor mismatch, thereby promoting local RE development and hindering RE development in neighboring regions.

Local government behavior in rural construction land marketization in China: An archetype analysis

There are various rural construction land marketization (RCLM) patterns in China. Explorations on the factors influencing the differences between patterns can provide policy inspirations for establishing a unified land market in China. Archetype analysis enables us to reveal the structural relationships between various factors and elucidate reappearing patterns in the cases. Based on 29 cases, this study analyzes the effects of different factor combinations on the behavioral choices of local governments using the archetype analysis approach. Six archetypes are extracted, and the main findings from the archetype analysis are as follows: 1) The combination of active rural land markets and the effective operation of village autonomy or informal dialogue mechanisms led by rural elites promote the emergence of self-organization models for RCLM. Local governments mainly play guiding, supervisory, and service roles. 2) When the self-organization model is challenging to sustain, local governments participate in the process of RCLM with different mechanisms due to social benefits orientation. 3) In certain well-developed rural areas with a high level of industrialization and limited land resources, extensive government intervention has emerged as a new governance model to achieve regional coordinated development goals. Our work reveals the mechanisms through which local governments play a role in the reform and innovation of RCLM, and it contributes to a better understanding of local government positioning in the future RCLM reform process.

How Does Low-Carbon Financial Policy Affect Corporate Green Innovation?—Re-Examination of Institutional Characteristics, Influence Mechanisms, and Local Government Behavior

This paper employs a propensity score matching approach to construct a control group and estimate the impact of the CETS pilot policy, a low-carbon financial policy, on corporate green innovation and its impact mechanism in a difference-in-difference manner. The results show that the CETS pilot policy has a significantly positive effect on corporate green innovation. The higher the penalty degree and the carbon price, the more obvious the promotion of the green innovation of pilot enterprises. The mechanism test shows that the improvement of corporate green innovation is mainly due to the incentive effect rather than the anti-driving effect of the CETS pilot policy, that is, the policy promotes corporate green innovation by providing innovation resources and enhancing the willingness to innovate. Further analysis shows that only in regions where local governments have less competitive pressure can the CETS pilot policy effectively promote enterprise innovation resources and that a close and clean government–business relationship can help strengthen the promotion effect of the CETS pilot policy on the willingness of enterprises to innovate. Furthermore, this paper introduces its theoretical framework as a strategic tripod to explore the friction in the process of the CETS pilot policy affecting corporate green innovation from the perspective of the industry environment and corporate resources. This research shows that a lack of industry green technology and corporate human capital may hinder the positive impact of the CETS pilot policy on corporate green innovation. Finally, this study found that the CETS pilot policy has no significant impact on the quality of corporate green innovation, and the lack of industry green technology and corporate human capital may hinder the CETS pilot policy from improving the quality of corporate green innovation.

Urban bias in political tournaments in China: Implications for urban land markets

This paper studies the applicability and implications of the political tournament model in Chinese cities by arguing that there is urban bias in political tournaments, especially in prefecture-level cities. Urban district leaders have to cooperate more and compete less than their counterparts in counties. The implication is that the percentage of urban districts is positively associated with monopolistic behavior of local government. Based on land leasing data of 290 prefecture-level cities from 2004 to 2014 (except 2012), it is found that the percentage of districts is positively associated with the speed of land price decline in leases through tender, auction and listing (TAL). This result supports the urban bias hypothesis in the context of the Coase Conjecture. It is also found that the total number of districts or population size is negatively associated with the speed of land price decline.

Research on the Integration of Educational Resources in Higher Education Administration

In order to improve the integration of higher education resources, local governments should strengthen the administrative management of higher education and propose measures to promote social governance. Therefore, from the perspective of local autonomy, this paper puts forward the following hypotheses about local government behavior and public policy adjustment: whether local autonomy affects the adjustment of higher education policy, whether the role of local intervention policy and legal improvement overlaps, whether the impact on resource integration is perfect, whether the public supervision mechanism is perfect, whether the public plays a role in promoting the integration of educational resources, and whether local laws and regulations have an impact on the integration of educational resources, the educational environment, and the level of local governance. The results show that the policy intervention of local governments and the improvement of laws and regulations have a great impact on the integration of educational resources, which can optimize the educational structure and form a good educational environment, which is the direct factor of the integration of educational resources. Therefore, local governments should strengthen the introduction of intervention policies, improve laws and regulations, and guide the public to participate in the integration of education.

The expenditure composition and trade-offs in local government budgets

The fiscal behavior of local governments has gained additional attention from academia and policymakers due to decentralization reforms transferring power from central to lower levels of government. As local governments assume more responsibilities for public goods and services, understanding their expenditure composition and trade-offs becomes crucial. While existing literature has examined the factors influencing the size of local government budgets, less attention has been given to the decision-making mechanisms and trade-offs within budget allocations. This study investigates the expenditure composition of 300 Flemish municipalities, using an unsupervised clustering algorithm and a binary logistic regression framework. Our results are indicative of how local governments tend to prioritize specific policy areas in the design of their budgets, when they operate under strict institutional and fiscal constraints such as a balanced budget rule.

On Local Governments Ombudsman in Turkey: A Comparative Analysis with the Local Governments Ombudsman in Uk and Italy

Objective: The Ombudsman is essentially an independent, national-level institution that operates in response to complaints from citizens in order to steer public administrations away from bad administrative practices and behavior. However, it is impossible for an ombudsman with such a broad mandate at the national level to deal with all administrative complaints within the state. Therefore, in order to get more efficiency from the national Ombudsman, it has been divided into different sub-types. Theoretical Framework: One of these is the Ombudsman for local governmentrs, which deals only with complaints from local administrations. Although there is a national ombudsman in Turkey, there is no ombudsman specialized in local governments. Method: This study aims to make some suggestions for the Ombudsman for local governments envisaged to be established in Turkey in the future by analyzing the local governments ombudsman offices in the UK and Italy in terms of their structural-institutional and functional aspects. In this context, the study, with a comparative approach, provides suggestions for the basic aspects, qualities and characteristics of the Turkish local government ombudsman and, thus, for its structural-institutional and functional aspects. The method of the research is literature review. Results and Discussion: According to the results of this research; Establishing an ombudsman for local governments in Turkey by law, cooperating with other ombudsmen in the vicinity, examining and correcting the mismanagement and bad behavior of local governments upon public demand, ensuring easy and cheap access, fulfilling their duties, and quickly and systematically addressing the faults of local governments. Warning, making suggestions, preparing reports and then reporting the situation to local decision-making boards and the public will be effective in providing public services more effectively and efficiently and strengthening local democracy. Originality/value: In the study, original suggestions are made for local government ombudsman in Turkey, based on the examples of UK and Italy.

Stock markets, local governments leverage, and regional economic development: Evidence from China

In this paper, we examine the relationship between stock market development, the regional economic development gap, and local government behavior using two-way fixed-effects and threshold-effects models based on provincial panel data from China between 2011 and 2021. The results reveal a significant negative correlation between stock market development and the regional economic development gap, suggesting that the former promotes the coordinated development of the regional economy. And this effect is higher when the local government facing a high leverage. Considering the threshold effect of local government economic participation and the regional disparities, we find the level of local government economic participation is low, the development of the stock market widens the gap in terms of regional economic development, vice versa. Therefore, the promotion role of the stock market in the coordinated development of the regional economy requires appropriate assistance from local governments. Additionally, the threshold value in the south is significantly lower than in the north, indicating that local governments in the north should provide more guidance and assistance to the market, to foster coordinated regional economic development through the development of the stock market. Based on these findings, we recommend that China accelerates and improves the construction of multi-level stock markets to leverage the positive role of these markets in achieving coordinated regional economic development.

The Impact of Intergovernmental Transfers on Fiscal Behaviour of Local Government in Ethiopia

This paper examines the effect of intergovernmental fiscal transfers on the fiscal behaviour of local governments in Ethiopia for the period 2004-2018. The empirical findings suggest that central government grants bolster state-level employment and expenditure. However, grants from the central government to states do not crowd out state-level revenue collection. Hence, this paper argues that fiscal decentralisation in Ethiopia has mostly, at least in theory, taken the form of devolution of the power to tax and spend public money. However, on average state-level revenue can only finance up to 26 percent of their annual expenditure. As a result, fiscal federalism in Ethiopia appears to be a delegation of spending responsibilities. It must be considered in a decentralized tax system, but with a transfer scheme and political hierarchy. The results are robust to alternative econometric estimation techniques.

What drives the green development behavior of local governments? A perspective of grounded theory

Although the elements that lead local governments to adopt sustainable development behaviors have been examined, the underlying processes that local governments adopt to accomplish green development behavior (GDB) lack systematic theoretical analysis. This study aims to investigate the determinants influencing local governments’ implementation of GDB from the organizational internal and external perspectives. This study employed grounded theory to analyze the data and develop an influencing factor model of local government green development behavior (GDB-LG) after interviewing 53 Chinese local officials. Additionally, through integrating process organization research with new institutional theory, the mechanism that explains how these elements influence GDB was investigated. The results of the study demonstrate that the influencing factors model could give municipal governments clear guidance when creating sensible green development policies, further enhancing the efficacy of GDB.

An analysis of the tripartite evolutionary game for building the ecological security barrier in the Bohai Sea under the threshold of land-sea integration

The construction of marine ecological security barriers (MESBs) is fundamental for the sustainable development of the marine ecological environment and of the marine economy, and is an important component of the strategy of land-sea integration. It is difficult to build an effective MESB simply by relying on the power of the government; therefore, to this respect, it is urgent to encourage the multiple participating subjects to work together. This study takes the Bohai Sea as the research object, and uses evolutionary game theory to construct a game model of decision-making behavior among marine enterprises, local governments, and the public in the process of construction of the MESB in the Bohai Sea, so as to explore the strategic stability equilibrium point through the analysis of the interests of the three decision makers, and lay the foundation for promoting this process. The results are as follows: (1) Local government regulation is key to promote the transformation of the Bohai Sea MESB from policy documents to behavior and from goal to practice; moreover, it directly influences whether the main sources of land-based pollution, i.e., marine enterprises, will abandon the traditional approach to production and development and actively promote the construction of the Bohai Sea MESB. (2) The supervision and reporting of the public can be used as a synergistic, auxiliary supervision means. Thanks to the government’s publicity and education, the public will develop social awareness of marine ecological security, which in turn will ensure a better public supervision of the behavior of local governments and, thus, promote the active participation of marine enterprises in the MESB in the Bohai Sea. (3) Participation costs, ecological benefits, corporate social image, fines, and other factors are the main factors considered in the strategic choice of marine enterprises, with different factors having different marginal effects at different stages. Finally, this study proposes effective measures to further clarify the roles and functions of the stakeholders in the construction of the MESB in the Bohai Sea, balance the interests of the game subjects, and provide an effective implementation path for the realization of the “Ocean Power”.

An evolutionary game study on the collaborative governance of environmental pollution: from the perspective of regulatory capture.

Local governments have been captured by enterprises and, thus, have relaxed environmental regulations. This phenomenon has occurred repeatedly and has resulted in serious environmental pollution, posing an enormous threat to public health. To solve this problem, this study introduces central environmental protection inspection and media supervision and considers the economic preferences and environmental preferences of local governments. A four-party evolutionary game model composed of enterprises, local governments, the central government and the media is constructed, and the equilibrium solution of four-party replicator dynamics equations is obtained. The influence of relevant parameters on the choice of strategies of the four main bodies is simulated by using MATLAB software to explore the paths and measures for overcoming regulatory capture and to further improve the modern environmental governance system. The results show the following: First, local governments are easily captured by large enterprises. Second, the central government can improve the environmental behavior of local governments by reducing their economic preferences and strengthening punishment. Third, compared to the penalties imposed by the central government, those imposed by local governments have a more significant impact on the environmental behaviors of enterprises. Fourth, compared to the use of an environmental protection tax policy or a tax relief policy alone, the combination of the two has a more significant impact on the environmental behaviors of enterprises. Fifth, central environmental protection inspection and media supervision can improve the environmental behaviors of both local governments and enterprises, and the effect of media supervision is better than that of central environmental protection inspection. This study recommends improving the performance evaluation system for local governments to coordinate economic development and environmental protection, ensuring that local governments assume the main responsibility, using a combination of incentive and constraint policies for enterprises, and increasing the environmental protection inspection and media supervision of local governments and enterprises to resolve the dilemma of regulatory capture in environmental pollution through the simultaneous enhancement of the environmental behavior of local governments and enterprises.

Manpower, financial, material resources, and participation level in national fitness: a fuzzy-set QCA approach.

In the era of economic globalization, major public health events-such as the Ebola epidemic, the avian influenza epidemic, the "SARS" epidemic, and the COVID-19 pandemic-occur more frequently, severely endangering human life safety and health and making global public health governance a major survival issue of universal concern. Therefore, governments have included the improvement of national health in their sustainable development goals, and its important position in global and national health policies has become increasingly prominent. However, the most common non-medical intervention taken by the government is to encourage people to actively participate in physical fitness activities to prevent disease and improve health. Therefore, how to improve the level of participation in national fitness is not only a hot topic in the academic community, but also a work content that governments around the world attach great importance to. To reveal the complex interaction of the factors affecting the participation level in national fitness and obtain the linkage and adaptation mode of multiple conditions. Starting from the three elements of manpower, financial, material resources, combined with the characteristics of the organizational behavior of local governments in China, this study puts forward an integrated analysis framework to understand the difference of the participation level in national fitness in various provinces and regions. Fuzzy-set Qualitative Comparative Analysis (fsQCA) is used to carry out configuration analysis on the participation level in national fitness in 31 provinces and regions in China. First, no single necessary condition can explain the results, whether for high-or low-level national fitness participation. Second, the construction of social sports instructors, public financial support for mass sports, and the supply of sports venues are the core conditions for improving the participation level in national fitness. Third, high-level participation of national fitness is carried out in five ways in China's provinces. These findings enrich the literature on improving the participation level in national fitness, and provide useful practical enlightenment for the local governments to increase the participation level in national fitness.