A critical note on local government ‘failure’ in Australian local government

Society for Heterodox Economics
Publication Type:
Conference Proceeding
14th Australian Society of Heterodox Economists Conference, 2015, 14 (1), pp. 92 - 103 (12)
Issue Date:
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Local governments in Australia are subject to a range of systemic problems, including corruption and impropriety, ongoing concerns with operational efficiency and financial sustainability and variable quality in management practices. In examining these issues, many of which have been brought into focus by regular inquiries and reform initiatives in all state and territory jurisdictions, some commentators have described these problems as examples of local government ‘failure’. We argue that this claim is misplaced and rests on a conflation of the concept of ‘government failure’ with ‘market failure’; an equivalence that ought to be avoided due to the morally superior status of government, particularly those that are democratically elected, when set against the mechanism of the market. Further, we argue that a more accurate and more useful conceptualisation of local government failure can be derived from examining the challenges and pitfalls of decentralised government.
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