Working Papers

A series of municipal bankruptcies across the United States during and after the financial crisis of 2007-2008 revealed the need for a better understanding of the many factors that shape cities’ fiscal operating environments and solvency conditions. The larger project this study is part of focuses on the role of real estate price changes in the spending and revenues of local governments, examining specifically the issue of irrational exuberance at city hall. We know that property value changes can influence revenue expectations, and ask whether perceptions about future growth conditions may increase propensity to commit to spending revenue that might not materialize. One understudied aspect of this hypothesis is the way in which local governments of various structures process information about local real estate market conditions and revenue expectations. In work completed recently, we analyzed how city councils and fiscal managers learn about real estate market conditions. We found that cities see themselves as budgeting conservatively, and that the housing boom and bust was secondary to declines in sales tax and other revenues during the recession. In this paper, we extend the inquiry to cover the bankruptcies of San Bernardino, Vallejo, and Stockton, CA. We explore these cases relying upon contemporaneous news reports and commentaries, as well as background sources providing municipal history. While exuberance may set the stage for the very extreme policy choice to seek Chapter 9 bankruptcy protection, we find that the perceptions of local administrators and lawmakers relative to economic growth and revenue expectations alone were likely not sufficient to predict, or explain, these cases. Instead, a number of political, budgetary, and financial factors must coincide in order to place leaders and managers into the kind of predicaments which place bankruptcy on the table as a rational, if unappetizing, option. 

Nonprofit housing development organizations in the U.S. have played a central role in affordable housing provision for decades, but are now encountering a number of challenges, some of which are arising within the organizations, while others stem from changes in the context in which they carry out their work. Our work in this area constitutes the U.S component of a four‐country study of current and anticipated future challenges and opportunities confronting the nonprofit housing sector. Our previous work reported on the findings from a survey modified from one deployed in England, the Netherlands, and Australia. This chapter summarizes our findings from in‐depth interviews that we carried out with leaders from the 12 organizations in our study in two major metropolitan areas of the US: the Boston and San Francisco Regions.

Black markets are estimated to represent a fifth of global economic activity, but their response to policy is poorly understood because participants systematically hide their actions. It is widely hypothesized that relaxing trade bans in illegal goods allows legal supplies to competitively displace illegal supplies, but a richer economic theory provides more ambiguous predictions. Here we evaluate the first major global legalization experiment in an internationally banned market, where a monitoring system established before the experiment enables us to observe the behavior of illegal suppliers before and after. International trade of ivory was banned in 1989, with global elephant poaching data collected by field researchers since 2003. A one-time legal sale of ivory stocks in 2008 was designed as an experiment, but its global impact has not been evaluated. We find that international announcement of the legal ivory sale corresponds with an abrupt ~66% increase in illegal ivory production across two continents, and a possible ten-fold increase in its trend. An estimated ~71% increase in ivory smuggling out of Africa corroborates this finding, while corresponding patterns are absent from natural mortality and alternative explanatory variables. These data suggest the widely documented recent increase in elephant poaching likely originated with the legal sale. More generally, these results suggest that changes to producer costs and/or consumer demand induced by legal sales can have larger effects than displacement of illegal production in some global black markets, implying that partial legalization of banned goods does not necessarily reduce black market activity.