Privatization and intermunicipal cooperation in US local government services: balancing fiscal stress, need and political interests

Abstract

The 2007–2008 Global Financial Crisis renewed interest in New Public Management tools. Privatization and intermunicipal cooperation are the two most common forms of service delivery reforms among US local governments. Which is more responsive to fiscal stress, service needs and political interests? Our national survey of 2,109 US local governments in 2017 finds cooperation is more responsive to fiscal stress and community need, while privatization is more common in communities with higher home values. Unionization is associated with more privatization and less cooperation. US local governments balance fiscal stress and community need. Cooperation is the preferred service delivery alternative.