Planning Ahead: Does Government “Beat the Clock”?

Populist initiatives, encouraged by governments around the country, allow the public to have a voice in government and are viewed as the cornerstone of our democracy. But how do governments react when citizen-led initiatives are potential threats to their legislative authority?

In Beating the Clock: Strategic Management under the Threat of Direct Democracy, Todd Ely and Benoy Jacob study the response of public officials to citizen-led ballot initiatives. The authors posit that when an initiative aims to limit the government’s access to resources, it forces public officials to act to subvert the initiative before it can be put to popular vote, a strategy they dub “beating the clock.”

According to the authors, citizen-led initiatives challenge the legislative power of public officials. Previous research on managerial response indicates that, when presented with a measure that threatens their power, officials can work within the limitations of approved initiatives, an option known as direct response, or they can choose an indirect response and proactively work against the measure. The authors identify conditions that determine when a government will choose an indirect response. They examine the case study of Colorado’s Amendment 61, a citizen-led amendment proposed in 2009 that would have banned state issuance of debt and forced local governments to receive public permission to take on new debt obligations. The authors argue that a government’s indirect response to such measures depends on the intended outcome of the citizens’ proposal, the likelihood of the initiative being approved on Election Day, and the ability of public officials to respond.

Sometimes, the authors argue, indirect response occurs when the government perceives that an initiative will have negative outcomes. Amendment 61, for example, would have greatly restricted the state government’s ability to issue debt, thus spurring government officials to actively attempt to subvert the measure.

The authors also assert that officials will engage in indirect response if they feel that an initiative has a strong likelihood of being approved. Pre-election polls in Colorado showed that 56 percent of the public supported Amendment 61. As such, the authors suggest that public officials feared the initiative would become law and permanently restrict their ability to issue debt.

Finally, the authors argue that public officials respond indirectly to perceived threats to their power if they have the means to undermine the measure. In absence of Amendment 61, Colorado officials had the power to issue bonds whenever necessary. The authors thus hypothesize that Colorado’s public officials would have responded to Amendment 61 with indirect response by issuing more bonds prior to the election, thus “beating the clock” on the initiative. Examining financial statements from October 2007 through May 2011, the authors argue that the threat of Amendment 61 led to the issuance of 24 additional bonds per month in the two months preceding the election, suggesting that policymakers did indeed issue bonds in anticipation of the ballot vote. Furthermore, the authors compare this change with seven neighboring states and find that Colorado alone witnessed a hike in the number of bonds issued. Amendment 61 ultimately failed and Colorado’s issuance of bonds normalized to the national average.

In sum, initiatives that restrict government behavior will elicit an indirect response if deemed a credible threat and public officials have the means to bypass the restrictions. This “beating the clock” framework, however, is limited to fiscal initiatives. As such, the authors suggest that research in citizen-led social initiatives, such as immigration, is necessary to expand the understanding of government responses.

Feature Photo: cc/Roby Ferrari