The use of special districts has grown remarkably over the past few decades: 7% from 1987 to 1992 (to 31,555 units). Municipalities grew 0.7% over the same time period to 19,000 units. Explains Foster, Districts enjoy the financial support, tax exempt status and quasi-monopolistic service-delivery advantage of public governments, together with the limited political visibility, internal management flexibility, and financial discretion of private corporations (284).

Foster assesses four alternative theoretical perspectives on the uneven use of districts.

Institutional Reform Perspective

       Privileges the welfare of the community over individuals

       Integrated metro service delivery is most efficient for equity and efficiency (Rusk 1993)

       Smaller governments lack scale or administrative capacity. Special districts still fragment geographically and service-wise, but can instill rationality on a polycentric government structure.

       Regional government is best. Variables of regional districts are: number of governments, population size.

Public Choice Perspective

       Privileges the individual over community

       Response to service demandsspecial districts are a rational response to differentiated service demand.

       Sub-county or municipal districts allow services to meet the growing needs of the population when growth outpaces government capacity.

       Districts allow residents to mix levels of services (a la carte). Multi-functional regional government would not allow such variation. Accommodates diversity of preference.

       Especially appropriate for unincorporated areas in a metro region.

       Variables: growth in population, percent population in unincorporated areas, income diversity.

Metropolitan Ecology Perspective

       A complex response especially determined by legal and political factors.

       Legal factors on finance and boundary change are especially important. The more constrained the municipalities the greater use of districts (Bollens 1986).  

       State level variables: restrictions on boundary change, annexation, incorporation and annexation constraints, debt constraints, home-rule powers.

Critical-Political Economy Perspective

       Development interests, logic of capitalism, power relations.

       Government action reinforces the growth-driven capitalist system.

       Property development is key (Piven and Friedland 1984).

       Special districts are politically isolated and financially powerfulcan be manipulated to control the development process. Easier access to capital via bond markets. This makes them more favorably disposed to growth than general purpose government (Heiman 1989).

Results

Legal and institutional factors are of primary importance in the use of special districts. Use of special districts is also determined by population size (demand) and number of district types legally enabled (supply).

Institutional reform:

Small localities have less of a tendency to form districts than large ones. More region-wide districts appear in regions with more governments, but also more municipally coterminous districts. So there is as much rationalization of fragmentation via districts as you see additional fragmentation via more municipally coterminous districts.

Public choice:

Population growth is not significant. Heterogeneous service demands are not significant. Property taxing districts are more common, other district types are not. There are more region-wide districts than sub county ones, which contradicts public choice expectations.

Metro ecology:

More consistent with expectations. Districts are less common when annexation or incorporation limits operate alone. Districts are a second-best option to annexation and incorporation. When they operate together, then you see more districts. When debt restriction is present, there is more use of tax financial districts. When tax constraints are present, you see fewer special districts. This is opposite of the expectations and may be due to historical reason. Under home rule, you see more regional and sub county districts.

Critical Political Economy:

No empirical support. The author thinks her proxy variable is badgovernment may support growth directly. Increase in population leads to an increase in districts of all types. Functional breadth of districts allowed by state legislature is the most important.

Conclusion: Special district use is based on structure, legal and demand factors. It is useful to think about special districts in their variety of types. Legal state rules are important and geography may also matter.