Local-Government Responses to the 2008 U.S. Fiscal Crisis: Strategic, Merely Predictable, Or Lifted from the Garbage Can?

Abstract

Many U.S. local governments experienced fiscal challenges in the wake of the 2007–2009 Great Recession. This article examines the resulting retrenchment choices, focusing on two research questions. First, are local governments’ choices in any meaningful way rational strategies? Some previous research has concluded that retrenchment behavior is the idiosyncratic product of irrational “garbage-can” decision making. Exploratory factor analysis of data from the International City/County Management Association's 2009 State of the Profession Survey identified patterns of retrenchment actions that are classifiable as coherent strategies. Second, do the strategies correspond to sector-specific or “generic” models of organizational choice and adaptation to circumstances? the observed strategies fit better with a generic resource-dependency framework of strategic choice than with public sector-specific, stages-of-retrenchment models. Regression results suggest modest associations between retrenchment strategies and several characteristics of local governments and their contexts identified by previous research as relevant.