The Local and Public Provision of Goods and Services – The Use of Economic Criteria in the Goods Provision Decisions of City Managers and Administrators

This research projects surveys city managers and administrators from three Midwestern states to assess the relevance of several classical economic theories to the local government decision making processes of the public provision of goods and services. The research and writing of Irene Rubin and of Kurt Thurmaier regarding the budgeting decision making process of local leaders, specifically the role of political and economic criteria influences on decision making, are used as the foundation for the empirical research. The theories of Paul Samuelson and James Buchanan are considered and tested to better understand their value and relevance to the decisions of public administrators. The characteristics of the good and of collective provision of the public provision of goods are examined closely. Specific areas of research emphasis include the importance of rivalry and excludability, and the costs of decision making and externalities in collective action. Three major findings emerge from the review of literature and data. First, economic criteria are incorporated by city managers and administrators in the financial decision making process, specifically in public provision decisions. Second, there are differences between the theoretical, definition-based decisions of city managers and administrators and their decisions based on application of these theories to practice. Finally, the decisions of city managers and administrators incorporate economic, political, and ethical factors.

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