Abstract
The municipal home rule movement of the late 19th and early 20th centuries decentralized control from the state and gave municipalities the ability to independently draft and adopt a municipal charter. Since not all states adopted home rule, and not all states that adopted home rule did it at the same time, the natural episode presents a rich ground for empirical study. There are several avenues on which to explore the effect of decentralization on outcomes. Previous research has considered the effect of decentralization on expenditures or on types of services provided. In the case of home rule, did the ability for municipalities to write their own charters and determine their own structure and functions result in different outcomes relative to municipalities who were not given the option? As much of the research in fiscal federalism deals with decentralization at the federal level, this paper serves as a nice complement as it investigates decentralization at a sub-national level and thus holds constant important country-level variables. Preliminary evidence seems to indicate that home rule had an effect both on municipal debt and on the composition of the municipal population.
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Notes
- 1.
Zimmerman (2008, p. 165). Originally from City of Clinton v. Cedar Rapids and Missouri Railroad Company, 24 Iowa 455 (1868).
- 2.
The work of Joan Williams uncovers evidence that shows royally chartered municipalities were subject to the will of the legislature in Maryland, Pennsylvania and Virginia. There were also cases in Massachusetts in the early 19th century which ruled that towns were corporations of limited powers and subordinate to the state (ACIR 1993, p. 31).
- 3.
ACIR (1993, p. 34). Originally from 24 Michigan 108 (1871).
- 4.
The only states to practice the Cooley doctrine in some form were Indiana, Nebraska, Iowa, Kentucky and Texas (ACIR 1993, p. 34).
- 5.
Kimball (1922, p. 376), which refers to the classification by Goodnow and Bates in Municipal Government and to work by Dillon.
- 6.
In both states, home rule was given to cities over one hundred thousand residents. Other cities became eligible for home rule chartering as their populations grew (such as Kansas City in 1889). California extended home rule privileges to cities of 3,500 or more in 1892.
- 7.
Oberholtzer (1893) notes that the Chairman of the City, Township and County Organization at California’s 1875 charter convention admitted that the idea was copied almost exactly from the constitution of Missouri, p. 85.
- 8.
Colorado (1902), Oregon (1906), Oklahoma (1907), Arizona (1910), Michigan (1912), Nebraska (1912), Ohio (1912), and Texas (1912). The largest population requirement for home rule in these states was five thousand residents, imposed by Nebraska and Texas.
- 9.
Minnesota was the only state in this group that didn’t require a majority, instead four-sevenths was needed to pass.
- 10.
The exception was Texas which, like California, stated that amendments couldn’t be imposed more frequently than every two years.
- 11.
Rhode Island was an exception. In 1951, the state granted home rule to any municipality. The constitutional amendment retained the cumbersome structure of a board of freeholders, charter conventions, specific election procedures, etc.
- 12.
While the constitution was changed in 1922, legislature did not take action on home rule until 1949.
- 13.
Some scholars list New York as adopting home rule legislation in 1924. It was home rule only in name. While it did grant local control over several specific powers, it did not allow municipalities to adopt, enact and amend their own charter. Municipalities were still severely restricted in their operation.
- 14.
South Dakota (1963), North Dakota (1966), New Mexico (1970), Louisiana (1974).
- 15.
States in the east are different from others in the Union by virtue of their colonial history and the piecemeal nature with which local special legislation was originally passed. Original constitutions in these states often allowed for the continuation of established governance structures and corporations and thus did not institute any formal local government laws. Southern states had dispersed populations which resulted in county governments being the predominant form of local government instead of municipalities.
- 16.
Oates (1988) notes that larger localities are likely to have a wider range of public goods and services.
- 17.
Gross debt is the sum of bonded and floating debt. From this total, the level of sinking fund assets is subtracted. A sinking fund is money set aside by a municipality to repay existing loans when they come due.
- 18.
The three variables that I choose to include for this within-state measure of variance are population growth, percent native born, and gross debt less sinking fund per capita.
- 19.
The omitted region is the south.
- 20.
Note that all municipalities in the control group are included, not just the matched municipalities.
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Hennessey, J. (2019). The Impact of Decentralization on Municipalities: Evidence from the Municipal Home Rule Movement. In: Hall, J., Witcher, M. (eds) Public Choice Analyses of American Economic History. Studies in Public Choice, vol 39. Springer, Cham. https://doi.org/10.1007/978-3-030-11313-1_3
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