Thesis (Ph.D.)--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic & Business Sciences, 2017. / The present thesis considers the state as a public organization, namely a complex structure that individuals use to accomplish collectively their individual interests mainly through exchange. By placing greater emphasis on exchange, the thesis is able to suggest novel insights about the organization of the public sector. [Abbreviated abstract. Open document to view full version] / GR2018

A thesis presented for the degree of Doctor of Philosophy in the School of Economic and Business Sciences, University of the Witwatersrand / This thesis investigates the problem of the economic organisation of the public sector. It begins by establishing context by considering the two related issues central to it: the boundary of the state and the internal organisation of government (Chapter 1). There is a growing literature that explores the boundary of the state in political economy terms. Moreover, the boundary of the state can be viewed in a similar light to the boundary of the firm. The Second Generation Theory of Fiscal Federalism explores the internal organisation of government through the lens of the theory of the firm. Second Generation Theory assumes that governments are subject to the same problems that firms face: for example, just like firms require institutions to align the incentives of managers and shareholders (e.g., better defined contracts), governments require institutions to align the incentives of politicians and citizens (e.g., better defined constitutions). In order to improve our understanding of economic performance over time, the state should be considered as a complex organisation held together by a series of public choice compromises. Chapter 2 considers one aspect of the state as an organisation: when a boundary change of an existing state generates a new state. It tries to economically capture the birth of a new state through boundary change by taking a cue from the theory of internal exit: the secession of a group of people from an existing state who will then go on to form a new state. Internal exit predicts an internal exit-proof tax rate, i.e., a state will set the tax rate so that internal exit will not occur (e.g., Quebec in Canada). However, in precolonial southern Africa (ca. 1600-1910), internal exit occurred. A well-known example of this is that of Mzilikazi who in the 19th century left the Zulu with his followers and formed his own, new state: the Ndebele. Why is it that in Africa internal exit as a threat failed and internal exit still took place? With the aid of a simple, historically informed model, this chapter offers a political economy explanation of why internal exit took place in precolonial southern Africa. The model shows how internal exit results from the payoff calculation of an elite member’s (e.g., Mzilikazi) desire to maximise his share of public revenue surplus. Chapter 3 considers the internal organisation of government through the role of intergovernmental grants in the context of laboratory federalism. The Public Economics literature on intergovernmental grants is extensive. In this extensive literature, grants are usually analysed according to consumer behaviour theory where income and substitution effects determine community spending (and ultimately community welfare). However, these effects shed little light on how local governments can use grants to experiment with policy (laboratory federalism) in order to develop new, successful policies. In fact, even casual empiricism shows that local governments routinely experiment with policy and achieve varying degrees of success. One recent example is Mayor Bloomberg’s range of anti-poverty experiments in New York City. Very little theory has been produced that ties policy experimentation with the role of grants, however. Chapter 3 takes an organisational view of grants, namely it likens them to incomplete contracts to show how certain grants can be policy instruments for the creation and discovery of new knowledge in the public sector. More precisely, the chapter develops an evolutionary learning model that captures the knowledge gains that different types of grants (e.g., lump-sum grants compared to matching grants) can engender. It shows that a lump-sum grant can bring about greater learning at the local government level than a closed matching grant. Chapter 4 concludes by summarizing and suggesting areas for future research. / MT2017

A Constituição Federal de 1988 instaurou um novo pacto federativo no Brasil, redefinindo competências e declarando também os municípios como membros efetivos da Federação. A Carta e normatizações posteriores redesenharam políticas públicas de forma que sua implementação passasse a ser realizada de modo descentralizado. Esta tese objetiva contribuir para o debate sobre a importância relativa de estados e municípios para a descentralização da política de trânsito, a partir da promulgação do Código de Trânsito Brasileiro, em 1997. Os resultados indicam que, dada a prevalência do que denominamos de paradigma fiscalizatório e na ausência de políticas federais de indução à descentralização, os municípios adotaram diferentes estratégias para responder à diretiva da integração municipal ao Sistema Nacional de Trânsito. O tamanho da frota veicular local e as políticas dos governos estaduais orientadas a estimular a municipalização são fatores decisivos no cálculo dos governos municipais para integrar-se ao Sistema Nacional de Trânsito. Dada a ausência do governo federal e o controle sobre recursos-chave para o exercício da fiscalização, cabe aos estados papel preponderante na implementação da municipalização da política de trânsito no Brasil. / The Federal Constitution of 1988 established a new confederated pact in Brazil, redefining public competences and declaring also municipalities as full members of the Federation. The Constitution and the later specific legislation redesigned public policies, which caused the implementation happened to be performed in a decentralized way.This thesis aims to contribute to the debate about the relative importance of states and municipalities in Brazil for thepolicy of traffic decentralization, from the promulgation of the Brazilian Traffic Code, in 1997. The results indicate that, given the prevalence of what we call surveillance paradigm and the absence of federal policies towards decentralization, municipalities have adopted different strategies to respond to the policy of local integrating to the National Traffic System. The size of their local vehicle fleet and the state public policies aimed at stimulating the decentralization at the municipality level are decisive factors in the calculation of local public administration efforts to integrate the National Traffic System. Given the absence of the federal government and control over key resources for the purposes of surveillance, it lasts to the state the leading role of implementing the municipalization of traffic policy in Brazil.

Como uma nova perspectiva da teoria federalista, o federalismo cooperativo opõe-se à clássica abordagem dualista, balanceando a tensão entre a autonomia dos entes federados e o mútuo auxílio. Nesse quadro, os consórcios públicos podem ser considerados o estágio final do processo de cooperação, fornecendo os instrumentos para possibilitar a gestão e a prestação conjunta de serviços públicos. O trabalho busca analisar o desenvolvimento de tais ajustes no direito brasileiro, especialmente após as recentes mudanças operadas no texto constitucional e levadas adiante pela Lei n.º 11.107/05 (Lei de Consórcios Públicos), que resultaram no advento de um novo modelo contratual, concretizado numa pessoa jurídica intergovernamental. Os métodos de estudo envolvem as tarefas de indentificação das raízes históricas das formas de cooperação, investigação das atuais possibilidades dos consórcios e seus limites e, finalmente, detalhamento do funcionamento da gestão associada, incluindo a estrutura da pessoa interfederativa, seus poderes e regime jurídico. As conclusões apontam para a importância da utilização planejada dos consórcios públicos de modo a que se alcancem consideráveis ganhos econômicos e sociais, permitindo aos governos locais enfrentar problemas comuns que de outra maneira não seriam resolvidos, em matérias como saúde pública, educação e outros serviços públicos e apenas serviços públicos, já que a legislação restringe as possíveis metas consorciais a esse específico conceito. / As a new perspective of the federalist theory, cooperative federalism opposes to the classic dualistic approach, balancing the conflict between states autonomy and mutual aid. Under this arrangement, intergovernmental agreements may be considered the final level of the cooperation process, providing the means to allow the joint management and deliver of public services. The paper aims to analyze these agreements development on brazilian law, especially after the recent changes enacted in the constitutional text and carried on by Law 11.107/05, which resulted in a new contractual model, materialized in an intergovernmental corporation. The study methods involve the tasks of identifying historical sources of cooperation forms, inquiring the agreements current possibilities and its limits and, finally, detailing the joint management functioning, including the corporation structure, powers and legal regime. The conclusions points to the importance of planned use of the cooperative agreements in order to reaching considerable economical and social gains, by allowing local governments to face common issues that otherwise would never be solved, in matters such as public health, education and other public services and only public services, since the legislation restricts the agreements possible goals to this specific concept.

A tese examina o municipalismo brasileiro após a Constituição de 1988, verificando como os municípios se saem no provimento dos serviços locais de saúde face à descentralização desta política com a criação do SUS. Argumenta-se que o processo de descentralização da saúde desenvolveu-se, ao longo dos anos 90, em duas fases distintas: a fase da descentralização autonomista, entre 1990 e 1998, quando os municípios tinham total liberdade nas escolhas da política local de saúde, e a fase da descentralização dirigida, após a introdução do Piso de Assistência Básica - PAB, quando os municípios começaram a receber recursos \"carimbados\", destinados exclusivamente a determinados programas de saúde, determinados pelo Ministério da Saúde. Todavia, conforme demonstramos, ambas as fases não foram capazes de minorar as desigualdades regionais existentes, em termos de oferta, acesso e financiamento aos serviços municipais de saúde. Enfim, demonstramos que as desigualdades em saúde produzidas pelo nosso federalismo não foram equacionadas pelo desenho adotado pela política de municipalização da saúde. Somado a isso, demonstramos que os argumentos normalmente utilizados pela literatura sobre federalismo e municipalismo no Brasil, críticos à \"onda municipalista\" e à existência de milhares municípios pequenos e altamente dependentes dos repasses do Fundo de Participação dos Municípios, não são suficientes para explicar a produção local de políticas sociais, dado que não são estes os municípios que apresentam os piores resultados na política de saúde no que tange à oferta, acesso e financiamento da saúde pelos gestores municipais. Por fim, demonstramos que o consorciamento pode ser um mecanismo eficiente na superação de um dos principais problemas enfrentados pelos pequenos e carentes municípios na provisão de serviços de saúde: o acesso a serviços de maior complexidade, inexistente em diversas pequenas municipalidades, sem que isso acarrete um \"efeito carona negativo\", ou seja, ao encaminhamento de pacientes para outras municipalidades sem a correspondente contrapartida financeira. / This thesis examines the Brazilian municipalism after the Constitution of 1988. It verifies the municipalities performance in the provision of local health services vis-à-vis the decentralization of this policy due to the creation of the SUS (Unified Health System). It argues that the process of health services decentralization developed during the 90\'s presented two different steps: the step of autonomist decentralization, between 1990 and 1998, when the municipalities were totally free to choose their own local health policies; and the step of the driven decentralization, after the creation of the Basic Assistance Floor - PAB, when the municipalities started receiving targeted incomes, which could be used exclusively for specific health programs, determined by the Health Department. However, as we demonstrate, the both steps were incapable to decrease the extant regional inequalities in what regards the supply, the access and the financing of municipal health services. To summarize, we demonstrate that the inequalities in health produced by our federalism were not balanced through the outline of policies that municipalized the health services. In addition we demonstrate that the arguments usually raised by the literature on federalism and municipalism in Brazil, which are critical to the \"municipalist wave\" and to the existence of thousands of small municipalities - which are very dependent to the transfers from the Municipalities Participation Fund (FPM) - are not sufficient to explain the production of local social policies, since such municipalities are not the ones which present the worst outcomes in the supply, access and financing of health services by the municipal managers. Finally, we demonstrate that the consortiums can be an efficient mechanism to overcome one of the main problems which are faced by the small and poor municipalities to provide health services: the access to services of higher complexity - which do not exist in many small municipalities - without causing the \"negative free-riding\", i.e., the transferring of clients to other municipalities without the correspondent financial retribution.

Fundação Carlos Chagas Filho de Amparo a Pesquisa do Estado do Rio de Janeiro / O trabalho investiga como as diversas estruturas federais resolvem os problemas de ação coletiva inerentes aos processos de negociação para a produção de políticas públicas intertemporais. Com tal propósito, tomam-se as relações intergovernamentais como objeto de análise. As hipóteses centrais da tese defendem que os níveis de conflitividade latente na Pólis estão relacionados com: 1) os graus de insulamento burocrático no processo de construção da Pólis Nacional; 2) as características de seu federalismo fiscal e; 3) a estrutura de seu sistema partidário. A racionalização do sistema federativo será maior quando o sistema partidário, horizontalmente, for capaz de solucionar os problemas de ação coletiva que surgem ao longo do tempo. As hipóteses são comprovadas através do estudo de caso do Brasil e da Argentina. Especificamente, apoia-se na narrativa histórica dos processos de formação de ambos os federalismos e na análise de dados empíricos dos processos de discussão e implementação da Lei de Responsabilidade Fiscal no ano 2000, no Brasil, e dos Pactos Fiscais nos anos de 1992 e 1993, na Argentina / The work investigates how several federal structures solve collective action problems inherent in negotiation processes for the production of public policies that can deal with historically different periods. With this purpose, intergovernmental relations are taken as the object of analysis. The central hypotheses of the thesis claim that latent levels of conflict in Polis are related to: 1) degrees of bureaucratic isolation in the National Polis building process; 2) the characteristics of its fiscal federalism and; 3) the structure of its party system. The rationalization of the federative system will be higher when the party system, horizontally, is able to solve the collective action problems that have arisen over time. The hypotheses are proven through the case study of Brazil and Argentina. Specifically, it relies on the historical narrative of the processes of formation of both federalisms and on the analysis of empirical data from the processes of discussion and enforcement of the Law of Fiscal Responsibility in 2000, in Brazil, and Fiscal Pacts in 1992 and 1993, in Argentina

The research problem for this dissertation was to determine the affects of President Nixon's New Federalism in four Pacific Northwest cities. More specifically, the dissertation sought to determine and explain the effects of the State and Local Fiscal Assistance Act of 1972, a basic component of the New Federalism, in Seattle, Tacoma, Portland and Eugene. The central goal of revenue sharing and the New Federalism is to decentralize government in the American federal system. The central fear of those who oppose the effects of such decentralization is that the poor and minority groups of America may be discriminated against by local special interest groups. The purpose of the dissertation was to see the extent to which the goals of the proponents and the fears of the opponents have so far been realized in the revenue sharing experience of four cities. A comparative case study approach was used whereby the General Revenue Sharing experience of each city was described and analyzed in terms of the goals of the New Federalism and the fears of its opponents. The data used for this investigation was obtained from taped interviews with city officials in each of the four cities. A questionnaire was prepared for the interviews which included questions pertaining to federalstate- city relations in terms of grants-in-aid, the fiscal condition of the city, the decision-making process used in the city for allocating revenue sharing funds, who participated in the decision-making process, who benefitted from revenue sharing in the city and the overall satisfaction or dissatisfaction with the concept of the New Federalism and revenue sharing. In addition to the data collected from city officials who were directly involved in the city revenue sharing process, additional data was obtained from those interviewed showing how the revenue sharing money was dealt with. It should be noted that these city officials were administrative personnel as well as elected officials. The results of the dissertation showed that the decentralization of American government sought by the Nixon Administration has so far not been obtained through General Revenue Sharing insofar as these four cities are concerned. The money from General Revenue Sharing was not adequate for these cities to meaningfully gain increased power and independence from either their states or the federal government. The fiscal requirements of these cities due to inflation, labor costs, demands to compensate for cutback categorical grants of the federal government and inadequate urban tax bases made the infusion of General Revenue Sharing money too small to allow the cities to undertake dramatic "new" departures because of these funds. Seattle and Eugene did undertake housing programs and Portland saw revenue sharing funds as "freeing up" other monies so the city could undertake a new neighborhood participation program, but as a rule these cities found the demands from traditional city services plus the increased burden of having to fund cutback federal categorical grant programs as using up all their funds including revenue sharing. The dissertation laid particular emphasis on the question of whether local poor people and minorities were deliberately included in the decision-making processes over revenue sharing and in the programs funded with revenue sharing funds. It was found that Tacoma especially sought to develop a decision-making process that was inclusive of representatives from all segments of the city and that Seattle had perhaps the least inclusive decisionmaking process. But there was not a direct correlation between degree of citizen-wide participation and benefits from revenue sharing going to all citizens equally. Although General Revenue Sharing is only one part of the New Federalism it appears that for the decentralization of American government to be meaningful, General Revenue Sharing will have to be dramatically increased in funding and supplemented with Special Revenue Sharing to take up the slack from cutback federal categorical grants intended for the human and community services areas. If the major goal of the New Federalism, decentralization, has not been accomplished so far, then the major fear of opponents has not been realized either. The dissertation demonstrates a commitment on the part of the City Council majorities in each city to preserve the progress made in recent years to improve the lot of America's poor and minority citizens. These groups, while sometimes having not been greatly involved in the revenue sharing decision-making processes, were recognized as deserving a part of the revenue sharing funds. The fear that without the federal government's specific prodding local special interests woumd act to ignore the interests of local minorities and the poor was not confirmed by this study.

<p>This thesis consists of a summary and four papers. The first two papers are theoretical contributions within the area of optimal taxation and public expenditures under asymmetric information between the government and the private sector, and the last two are empirical contributions to the literature on local public expenditures.</p><p>Paper [I] concerns the optimal use of publicly provided private goods in an economy with equilibrium unemployment. The paper points out that imperfect competition in the labor market gives rise to additional policy incentives associated with the self-selection constraint, which motivates adjustments in the public provision of private goods. It also addresses employment related motives behind publicly provided private goods.</p><p>Paper [II] addresses optimal income and commodity taxation in a dynamic economy, where used durable goods are subject to second-hand trade. In our framework, the government is unable to directly control second-hand transactions via commodity taxation. We show how the appearance of a second-hand market affects the use of commodity taxation on the new durable goods as well as the use of income taxation.</p><p>Paper [III] relates the existence and size of the flypaper effect to observable municipal characteristics. The analysis is based on a political economy model, which implies that the effect of a change in the tax base on the majority voter's tax share will be crucial for finding a flypaper effect. The empirical part is based on Swedish data on municipal expenditures and revenues for the period 1996-2004. The results show that the size of the flypaper effect varies among municipalities depending on the relative composition of grant and tax base.</p><p>In Paper [IV], the composition of municipal expenditures in Sweden is analyzed by estimating a demand system for local public services, in which tax revenue collection is treated as endogenous. The estimation is based on the QAIDS specification and uses panel data for the period 1998-2005 and for six local public services. The results show that the point estimates of the income elasticities are positive (with one exception), whereas the point estimates of the own-price elasticities are negative and less than one.</p>

<p>In the light of the debate on the future of the European Union, a debate on new and better governance has started. One of the subjects of this debate is the Open Method of Coordination (OMC). It was initiated at the Lisbon European Council in 2000 as one of the ways to reach the strategic goals set for the EU at the same summit. Policy coordination was however applied in European policy- making before the Lisbon European Council. In the area of employment these activities had been operating for some years, and the OMC was created with the European Employment Strategy (EES) as a model. Now the OMC is also operating in the area of social inclusion policy, and a number of other policy areas. As its use is being extended, scholars as well as practitioners are studying it to determine its role and functions in EU governance. </p><p>This thesis aims at examining the open method of coordination, in an effort to position it in the European governance structure and discuss if it can be a sign of an emerging new mode of European governance. </p><p>Using a comparative approach, this thesis combines three methodologies; documentation analysis, interviews and case-studies. The analytical framework consists of existing modes of governance, as defined by Helen Wallace (2000). These are complemented with one more mode of governance. A discussion on governance in general and European governance in particular is also part of the analytical framework. </p><p>The OMC is studied by its definition and is further discussed from the view of the different European institutions. Finally a case study of its application in employment policy and social inclusion policy is presented. These findings are then set in relation to the governance modes in the analytical framework, in order to define and explain the OMC. A discussion of the notions of democracy and legitimacy is also held. The conclusions hold that the OMC is an interesting mix of multi-level governance, intensive transgovernmentalism and policy coordination and benchmarking. It also has interesting features of the innovative mode of network governance. This concludes that the OMC does not only build on innovative governance, but is an interesting balance between multi-level and intergovernmental governance. It is also based on notions of legitimacy rather than democracy. </p><p>Based on the findings in this thesis, the OMC should be seen as a sign of a new way of thinking about European governance. Its role should however not be exaggerated as most actors are very clear on it not being an alternative to ordinary Community action, and it should be seen as a complement rather than a substitute. The fact that the Convention on the future of Europe did not include the OMC into the draft constitutional treaty shows a somewhat ambivalent position towards it. It is concluded that the specific mix of governance features in the OMC is best served outside the treaty at this point.</p>

<p>How can the central state direct local public units to work effectively towards public sector goals? In an effort to understand the conditions for governance, the three self-contained essays housed in this thesis examine the role of central and local government agencies in implementation of active labor market policy (ALMP) in Sweden. The study is based on new and unique quantitative data.</p><p>To understand steering possibilities, it is necessary to examine how local politics impinges on local actions. Thus, essay I concerns the following question: Does it matter for local government actions whether left wing or right wing parties govern at local level? I propose that the effect of political partisanship depend on entity size. I expect left-wing governments to be more engaged in ALMPs, but that the impact will be larger in sizeable entities. Empirical evidence supports the theoretical priors.</p><p>It is also important to know how actors can be coordinated. Thus, essay II tries to explain cooperation between agencies. Trust, goal congruence, and resource interdependence are focused upon. The results indicate that there is no impact of trust on cooperation if goals diverge. Similarly, it does not matter that agencies trust one another if they have different agendas. But if both factors exist simultaneously, cooperation increases. On the other hand, resource interdependence boosts cooperation regardless of trust levels.</p><p>But does cooperation really improve policy implementation? Essay III proposes that the impact is contingent on task complexity. I expect cooperation to be more valuable when the task is complex. In accordance with this hypothesis, the evidence suggests that only complex tasks can be carried out better through intense interorganizational cooperation.</p><p>Taken together, the insights from the essays might help us find routes to better governance.</p>