Author ORCID Identifier

Date of Award

Summer 8-1-2022

Degree Type


Degree Name

Doctor of Philosophy (PhD)


Public Management and Policy

First Advisor

W. Bartley Hildreth

Second Advisor

Ross Rubenstein

Third Advisor

Benedict Jimenez

Fourth Advisor

Lang (Kate) Yang


A discussion of the public finances of local governments is incomplete without appropriate attention to the fiscal rules and institutions established to ensure sustainable public finance outcomes. Several scholars in public finance have studied these rules- exploring their adoption as well as evaluating their effectiveness under different political conditions. This dissertation has two main purposes: First, to introduce a new fiscal institution, termed as “state oversight rules” which allows state governments to proactively monitor local government borrowing, and second, to examine the impact of these rules on three different local government financial outcomes. The dissertation begins with the development of a framework of state oversight rules based on an analysis of the statutory code of all 50 states. The first chapter carefully parses out the variations in the procedures and authorities responsible for oversight. The remaining chapters then utilize this framework to examine the impact of the rules on borrowing costs (chapter two), county government borrowing (chapter three) and water-sewer utility borrowing (chapter four). Chapter two examines the role of state oversight as a signal of credit risk. The results show that the variation in the design of the rules has a differential impact on borrowing costs. In general, as the rigor of the oversight process increases the borrowing cost of local governments decrease. Chapters three and four examine the role of oversight on overall borrowing in the context of overlapping governments and water-sewer utilities, two circumstances that are discussed in the literature as leading to high overall borrowing. Chapter three studies whether the debt of county governments in states with oversight is responsive to the debt of its sub-county governments. Results show that the long-term debt of county governments does reduce as sub-county overlapping debt increases especially in states that have established a rigorous oversight process. Chapter four shifts attention to the water-sewer activities of city governments and examines whether the oversight process has an impact on overall borrowing. The results suggest that utilities subject to an oversight process have higher borrowing than non-oversight utilities indicating that the effectiveness of these rules is limited in the context of water-sewer utilities.