Form of Government and Collective Bargaining Outcomes

Abstract

The purpose of this study is to determine which form of government, city manager or elected mayor, is more successful in minimizing labor costs. The two competing theories are the city manager efficiency theory, which argues that city managers are more successful than mayors in restraining labor costs, and the equal incentive theory, which argues that both forms of government are equally adept at restraining labor costs. Differing from earlier studies, these theories are examined here explicitly within a collective bargaining framework, where labor costs are frequently determined in the local public sector. To empirically test which theory is valid, national cross-sectional samples of cities with bargaining units for police and firefighters were collected. Contrary to previous studies, it is found for the police sample that mayors are actually more efficient than city managers. For the firefighter sample the results support the equal incentive theory. The general conclusion from both samples is that city managers are not more efficient than mayors and may actually be less efficient.