Local Government Failure

The phenomenon of government failure, defined here as the inability of a government agency or agencies in a given tier of government or in a federal system of multi-tiered governments to intervene optimally in a market economy, is now a familiar area in policy analysis. In this chapter I advance the argument that not only is government failure an essential dimension of policy making at all levels of government, but that cogent reasons exist for believing that the problem of government failure may be much more acute in local government than at higher tiers of governance. This argument runs counter to conventional wisdom amongst commentators on municipal policy making, most notably the views of authoritative British scholars Bailey (1999) and Boyne (1998). Moreover, I develop a new taxonomy of government failure in support of this thesis. The application of the public choice approach to the public sector has generated various taxonomic systems of government failure. For example, perhaps the earliest typology of government failure was developed by O'Dowd (1978, p.360) who argued that all forms of government failure fell into a generic tripartite classification containing 'inherent impossibilities', 'political failures' and 'bureaucratic failures'. A somewhat more recent and closely related taxonomy of government failure has been advanced by Dollery and Wallis (1997) who argue that it is possible to identify three main forms of government failure: legislative failure, bureaucratic failure, and rent-seeking. But possibly the most comprehensive typology of government failure has been developed by Weisbrod (1978), who has advanced a fourfold classification which comprises legislative failure, administrative failure, judicial failure and enforcement failure. The chapter itself is divided into three main parts. Section one focuses on the typologies of government failure, which have been especially constructed for local government by Boyne (1998) and Bailey (1999). A new fivefold taxonomy of local government failure is developed in part two, which attempts to highlight the peculiar susceptibility of this tier of governance to government failure. The chapter ends with some brief concluding remarks in section three.