Do Cities and Counties Attempt to Circumvent Changes in Their Autonomy by Creating Special Districts?

Conditionally accepted at the American Review of Public Administration

This study uses forty years of data from the US Census of Governments to examine the impact of changes in local autonomy on the creation of special districts, the most popular and fastest growing form of local government in the U.S. Using a fixed effects negative binomial regression specified at the urban county and MSA level, we find that restrictions of fiscal autonomy of cities is associated with creation of new special districts. The magnitude of this finding is amplified when limits on fiscal autonomy are paired with grants of functional autonomy. We find no analogous effects for county governments. These two findings are consistent with the circumvention argument made in the local autonomy literature.