Premium
The Effects of Recessions on Contracting Moderated by Institutional Arrangements of Government: Evidence From California Cities, 1993–2009
Author(s) -
Kim Cheongsin
Publication year - 2015
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/pbaf.12064
Subject(s) - recession , charter , shock (circulatory) , government (linguistics) , business , demographic economics , finance , economics , political science , law , macroeconomics , medicine , linguistics , philosophy
This study aims to uncover the different effects of economic recessions on city contracting, which vary with institutional characteristics. Drawing on the literatures of public finance and management, it is hypothesized that recessions have a positive relationship with contracting and this relationship will be stronger in governments with the council–manager form or the charter status than in those with the mayor–council form or the general‐law status, respectively. The hypotheses are tested on all available California cities over 17 years, from 1993 to 2009. Interestingly, the results indicate that recessions actually decrease contracting in governments with both the mayor–council form and the general‐law status, but the extent of the decrease is moderated if they adopt either the council–manager form or the charter status. For cities with these two institutional characteristics, finally, it turns out that recessions increase contracting. These uneven effects of recessions imply that governments experience environmental shock very differently one from another because they differ in institutional characteristics.