Preliminary analysis of data. Analysis to be refined. This paper written by Klausen. Co-writer for final version: Marie Kjærgaard, KORA, Aarhus, DK
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1 Preliminary analysis of data. Analysis to be refined. This paper written by Klausen. Co-writer for final version: Marie Kjærgaard, KORA, Aarhus, DK 2
2 Not infrequently, central governments in multi-level systems find that they want to push through policies without being able to dictate lower-level tiers. Chris Skelcher (2005) talked about the jurisdictional integrity of lower-level tiers, for instance in federations or in unitary states, that delimit central government control. These can be of a constitutional or political nature. Fritz Scharpf (1988) noted that joint decision-traps can be the result. A viable option for central governments is to pursue policies by non-coercive means. So there s a lot of studies of the use of such tools in federal systems (Karch 2012). Because implementation is predominantly voluntary, this literature sort of blends implementation theory with policy diffusion or policy transfer theory. New policies spread among lower-level tiers through various mechanisms. Coercion is one of them, but there s also competition, learning and imitation. In other words, vertical and horizontal mechanisms may interplay. In unitary states we can often see quite complex reform packages containing various policy instruments, many of which will be of a non-coercive nature. But if lower-level tiers actually start to pick up the ideas promoted by incentive-based or argumentative means, mechanisms of horizontal policy transfer could come into play, and supplement the effect of vertical instruments. 3
3 We believed this to be a rather accurate general description of the ongoing local government reform in Norway, so we used this as a case of a central government reform of a system with considerable jurisdictional integrity of lower-level tiers, using a composite package of predominantly non-coercive policy instruments, and possibly setting of mechanisms of horizontal policy diffusion as well. In other words, a combination of vertical and horizontal diffusion. The reform was decided in Parliament in June this year, amalgamating 428 local governments into 354. Only about 15 out of 121 were decided although the local councils had voted against. So there s not much use of authority-based tools, not due to lack of constitutional basis but due to political jurisdictional integrity. However there s been a massive amount of arguing, evidence, expert advice. Also use of economic incentives, notably changing the funding system to the disadvantage of local governments that could have become more effective by amalgamating. Finally regional facilitation by the county governors. 4
4 Our primary interest is in the phase for local negotiations. 5
5 Inter-municipal negotiation processes in the first phase of the reform were commonly concluded by the publication of an agreement of intention (AI). The AI were not mandatory, and no set format was provided from the MLGM. Consequently, these documents differ substantially in terms of contents as well as format. The common denominator is that the parties to the agreement concur about an intention to amalgamate. This phase typically involved these elements. Although the local processes comprised assessments, negotiations, agreements of intention, opinion survey, referendum and eventual decision, we observed substantial differences between one local government and another. Not all of these events were present in all cases, and they occurred in various sequences. 6
6 Overall, the data set contains 143 agreements of intention comprising 299 local governments. Some local governments became party to two or more agreements of intention during the two years of the first phase of the reform, due to shifting circumstances in the local negotiation processes. Because the purpose of the present analysis is to assess determinants for responsiveness to vertical and horizontal diffusion mechanisms, our main interest is in the first instance a given local government decides to become party to an agreement. Consequently, the date of entry into an agreement for the first time constitutes failure in the survival analysis. Having removed second, third or fourth occurrences, the data set contains 299 units representing individual local governments, and the date at which they entered into one of 114 agreements of intention for the first time. We estimate the hazard ratio for entering into an agreement for the first time as a measure of relative responsiveness to vertical and horizontal diffusion mechanisms. In other words, we interpret early first entry as an indication of higher responsiveness than late first entry. Reference line 1 (left): Date for public hearing of adjustment to funding scheme Reference line 2 (right): Deadline for local negotiation phase 7
7 We measure the effect of geographical horizontal diffusion by including the variable ANDELNABO. The variable was computed using GIS data on all local government borders. Differences in survival time (time from initiation of reform to first entry into agreement) for each pair of neighboring jurisdictions (local governments with common border) were recoded into dummies set to one if the neighbor s first entry occurred at an earlier time, zero if later. ANDELNABO denotes the mean value for all neighboring jurisdictions. ANDELNABO varies between 0 and 1, with a mean value =.15 and std.dev. =.23. The distribution of ANDELNABO among the 428 local governments is presented in Figure 2 8
8 9
9 Descriptive statistics 10
10 We estimate four models, introducing firstly the vertical diffusion mechanisms and lastly the horizontal mechanism. A vector of variables representing distributions for age, level of education, mean private income, and expenditures for social services (childcare, social support) is included in the analysis as control variables. The intention is to control for variations among the local governments not due to the diffusion mechanisms. In Cox regression, hazard rates below 1 denotes negative effects. Starting with the vertical diffusion mechanisms, the effects of population size and population density are negative in all models. In the nodal (N) model, increasing population is inversely correlated with date of entry. In other words, smaller local governments tend to enter into their first agreement later than larger ones. This is contrary to our expectations. One explanation may be that smaller units have tended to disagree with the government s arguments. The effect becomes insignificant in models O and H, the fixed effects models controlling for county-defined determinants. In these models, however, the negative effect of population density becomes significant. Sparsely populated local governments have been more reluctant to enter into agreements than more densely populated ones. The MAJREGREP15 variable however scores positively throughout, and is significant in three out of four models. Apparently, local councils with a similar composition as the government tended to be more receptive to the government s arguments than others. As for the treasure variables, the adjustment of the income system seems to have had the intended effect. Increasing net loss gain! of income has served as an impetus for early entry into an agreement. The effect is significant and positive, but quite weak (close to 1). As for the economic status (NETDRAND), the effect is negative, as expected. Poorer local governments have been somewhat more eager to enter into 11
11 agreements than the more well-off. But this effect is also quite weak, and only significant in the last model. 11
12 The O model includes the County governor dummies in a fixed effects Cox regression model. Counties 8 and 14 (Telemark, Sogn og Fjordane) were systematically quicker to enter into agreements than the others, while counties 2, 4, 6, 18 and 19 (Akershus, Hedmark, Buskerud, Nordland and Troms) were lagging behind. This finding supports previous research documenting highly variant practice among the county governors in terms of facilitating and promoting the NLGR. Finally, the horizontal diffusion mechanism (ANDELNABO) comes out as strong and significant, indicating that the geographical diffusion mechanism has played an important role. However, the effect is strongly negative. 12
13 13
14 14
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