Contrary to all the evidence, there are still some people who think bigger is better when it comes to local government. In this Commentary, based on remarks to the Alberta Urban Municipalities Association, AIMS President Brian Lee Crowley provides the research that debunks that myth. He explains that local government is not merely a device for supplying municipal services, but also for finding out what services people want and how much they are prepared to pay for them.
“The smaller the government unit, the better they are at discovering this, because the evidence is very strong that local government is closest to the people, and the smaller it is, the closer it gets to the population. Amalgamation tends to undermine this relationship and therefore can only really be justified if there are pretty remarkable efficiencies to compensate for dilution of responsiveness and democratic accountability.”
In Surviving and thriving in an irrational world, Crowley explains that the most dynamic force helping to keep costs down is not a highly centralised and bureaucratic monopoly provider of public services, but a decentralisation of authority and decision-making within several municipalities in an urban area or even a mixed rural and urban region where residents cannot vote themselves benefits at the expense of other taxpayers in other parts of the region. This ensures that people only demand services that they’re prepared to pay for, and municipalities have powerful incentives to keep costs low and satisfaction high, or risk the erosion of their tax base as people and businesses vote with their feet.
Crowley also provides evidence to show that the best way to provide municipal services is through competition. He explains that we must create a customer-service oriented culture in our municipal governments and align the incentives of our elected officials so that they get rewarded for providing efficient, high quality services. This means we need them to focus on defining service levels, measuring them and rewarding superior performance by service providers.
“So the model that is emerging is of a much smaller local government that acts as a kind of buyer’s co-op on behalf of the residents of the locality, an experience that dovetails nicely with the Prairie history of reliance on co-ops throughout rural areas. Service standards are set, and contracts are let on the basis of those standards, to competitive bidders. The winning bidder is then held accountable for his success or failure in reaching the agreed standards. The question of whether the service is provided by public sector or private sector workers and managers is actually becoming irrelevant.”
To read the complete Commentary, click here.