Are Special Districts Strategic Complements or Strategic Substitutes?

Special districts
Public service provision
Local government

Christopher B. Goodman and Deborah A. Carroll. “Are Special Districts Strategic Complements or Strategic Substitutes?”


Northern Illinois University

University of Illinois at Chicago


October 2022


What happens to service provision when a special district enters the public service market? Theoretically, special districts can act either as complements by supplementing existing service provision, or as substitutes by supplanting current service provision. We find a substitution effect using fixed effects regression on urban counties in the United States from 1972 to 2017. Special districts replace public service provision by county governments; however, we find no similar result for municipal governments. The results are nuanced – findings are confined mainly to spatially expansive public services like fire protection, sewerage, and solid waste management. Furthermore, we find evidence that day-to-day operations drive observed substitution and that county size is an important factor depending on the functional service area.

BibTeX Citation

  author = {Goodman, Christopher B. and Carroll, Deborah A.},
  note = {Working Paper},
  title = {Are Special Districts Strategic Complements or Strategic Substitutes?},
  year = {2022}}