Who Benefits from Special District Service Delivery?: Water Affordability in the United States

Abstract

Despite decades of controversy about the relationship between special districts and public policy, questions remain about the impact of government specialization on service delivery. In this paper, we explore one aspect of this debate, how special districts impact equity in the costs of service delivery, using water affordability as our empirical case. Two dominant views of special districts have emerged from the literature that are relevant to our empirical exploration. The first asserts that special districts are a form of “shadow government,” set up for the benefits of developers and other special interests and unaccountable to the general population. The second claims that special districts fit into a polycentric vision of local government, better representing the interests of residents due to their singular policy focus, and improving residents’ ability to pinpoint politicians responsible for specific services. Using an original dataset of all public water utility in the United States serving over 40,000 people and two measures of water affordability, we quantitatively test whether special districts have systematically less affordable water rates. We find some evidence that this is the case, additionally finding that the gap in affordability grows as community poverty levels increase.