Using Mixed Methods to Explore the Impact of Macro Level Governing Structure on Public Sector Employment

Utilizing Oates’ fiscal federalism theorem, the Tiebout model and Berry’s common pool model, this dissertation develops an integrated theoretical framework of state and local government structure. Based on the framework, the author examines the effect of a macro level governing structure on public sector employment using two different methods. An econometric model is used to examine the individual effect of four characteristics of a macro level governing structure on local public employment levels by combining other socioeconomic data of 3,031 counties from 1992 to 2012. These four characteristics are spatial fragmentation, interjurisdictional completion, jurisdictional overlap and fiscal decentralization. The second method was a qualitative comparative analysis which compares different combinations of the four characteristics of a macro level governing structure in relation to public employment at the state level, then utilizes Boolean algebra to investigate the causal conditions using a bottom-up data reduction approach. The regression analysis finds that an increased level of fiscal decentralization is significantly associated with larger labor input in the production of public services. Additionally, spatial fragmentation reduces the levels of public sector employment, whereas interjurisdictional competition and jurisdictional overlap lead to the growth of local public sector employment levels. The qualitative comparative analysis presents different types of interactions of macro level governing structure characteristics in relation to high and low levels of state government employment. Several conclusions can be drawn from the results of this dissertation, which have challenged conventional theories. First, local public sector employment may grow faster in a decentralized state than in a centralized one. Second, interjurisdictional competition, in particular, the competition between general-purpose governments is unable to constrain the growth of local public sector employment. In contrast, more labor inputs are required to produce public goods and provide public services provision to satisfy the needs of local community residents. The results of the qualitative comparative analysis reveal causality asymmetry and highlight how different interactions of characteristics of a macro-level governing structure affect different levels of state government employment.