The Korea Local Administration Review

Does the form of government make an essential difference in financial conditions? This paper tests six hypotheses that the council-manager system of city government produces better fiscal performance than that of the mayor-council system. Most previous works tried to test the assumption of progressive reformers that professional management systems in local government are more financially healthy and efficient than political leadership systems. However, the empirical test results have coalesced. This paper challenges the previous research using the size of government variables such as the size of expenditure, revenue, and taxation in order to assess the financial effects of government form. Besides, the study uses well-defined alternative variables to evaluate the effects of government form on fiscal performance in the city. Overall, the council-manager system improves fiscal health and efficiency in city government, especially regarding the fiscal self-reliance ratio, revenue-expenditure ratio, and debt service ratio.

□ Keywords: The Form of Municipal Government, Council-manager Form, City-mayor Form, Municipal Fiscal Health and Efficiency