An Investigation of the Determinants of the Municipal Decision to Privatize Residential Sanitation Collection.
Date of Award
Doctor of Philosophy (PhD)
Nicholas G. Apostolou
The Governmental Accounting Standards Board (GASB) Concepts Statement No. 1, Objectives of Financial Reporting states that (GASB 1987, 27) "Financial reporting should assist in fulfilling government's duty to be publicly accountable and should enable users to assess that accountability." Government accountability requires that public officials answer to the citizenry. Further, accountability rests on the notion that the citizenry has a "right to know" (GASB 1987, 21). Therefore, according to GASB Concepts Statement No. 1, municipal accounting data should reflect public resource allocation decisions made by government officials. This study investigates the usefulness of municipal accounting data for modeling a particular public resource allocation decision: the decision to privatize residential sanitation collection (RSC). Data from Louisiana municipalities are used in this study. Inferential statistics are used to characterize the two groups of municipalities (those that privatize RSC and those that do not privatize RSC) in terms of demographic and financial variables. Public choice theory and the theory of bureaucracy are used to suggest municipal accounting information that is useful for modeling the municipal decision to privatize RSC. Logistic regression (logit) analysis is employed to test whether municipal accounting data is useful for modeling the municipal decision to privatize RSC. The explanatory value of the overall model is evaluated using a chi-square statistic. Chi-square tests of the individual coefficients in the logit model are used to test the individual hypotheses. Five of the nine independent variables are statistically significant at the.10 level. The major conclusion of this study is that public resource allocation decisions are impounded in the municipal accounting numbers. This finding makes it possible to assess the accountability of public officials by using municipal accounting data. Furthermore, public choice theory and the theory of bureaucracy provide the theoretical underpinnings necessary to develop models of public resource allocation decisions using municipal accounting data.
Brooks, Richard C., "An Investigation of the Determinants of the Municipal Decision to Privatize Residential Sanitation Collection." (1991). LSU Historical Dissertations and Theses. 5109.