Tima T. Moldogaziev

Empowering Public Sector Employees to Improve Performance: Does It Work?

For more than a decade, public organizations have been adopting employee empowerment with the aim of improving performance and job satisfaction and promoting innovativeness. Our understanding of employee empowerment has been hindered by a dearth of empirical research on its uses and consequences in the public sector. Based on Bowen and Lawler’s conceptualization of employee empowerment, this study explores the link between various empowerment practices and perceived performance in federal agencies. It is found that empowerment practices aimed at providing employees with access to job-related knowledge and skills and at granting them discretion to change work processes have a positive and substantively significant influence on perceived performance. Other empowerment practices geared toward providing employees with information about goals and performance and offering them rewards based on performance are found, however, to have little bearing on perceptions of performance.

Employee Empowerment and Job Satisfaction in the U.S. Federal Bureaucracy: A Self-Determination Theory Perspective

Employee empowerment practices have been widely adopted in public organizations in Europe, the Pacific Rim, and North America. In this study, employee empowerment is conceptualized as a multifaceted approach composed of various practices aimed at sharing information, resources, rewards, and authority with lower level employees. Self-Determination Theory is used to theorize about the effects of these different empowerment practices on job satisfaction. The results of the empirical analysis, based on 2010 Federal Employee Viewpoint Survey (FEVS) data, indicate that empowerment practices aimed at promoting self-determination (i.e., sharing information about goals and performance, providing access to job-related knowledge and skills, and granting discretion to change work processes) have positive and sizable effects on job satisfaction. Conversely, empowerment practices that undermine autonomy (i.e., offering contingent-based rewards) have no meaningful effect on job satisfaction.

Impact of Unfunded Pension Obligations on Credit Quality of State Governments

This study reviews the funding status of state‐administered pension plans and their impact on state credit quality. As the fund ratio (actuarial assets/actuarial accrued liability) of state‐administered pension plans decreases, states are more likely assigned a lower rating. Moreover, rating outlooks are sensitive to the fund ratio, especially for migration between stable and negative outlooks for states with lower fund ratios. These results are a timely pretest to the 2013/2014 implementation of GASB Statements No. 67 and 68, serving as a benchmark to assess whether new reporting requirements will yield information to alter the markets response to unfunded pension liabilities.

State and Local Government Bond Refinancing and the Factors Associated with the Refunding Decision

The decision to refinance existing debt is a significant one made increasingly by public financial managers. Since state and local governments are somewhat limited by the Internal Revenue Service (IRS) in their ability to refinance debt, the decision to refund bonds is critical due to the potentially large economic benefits associated with refinancing bonds in the future at lower interest rates. Because of these potential benefits, it would be instructive for policy makers to know some of the covariates associated with this important debt management decision. To that end, this study analyzes refinancing bonds sold by California state and local government issuers between 2000 and 2007. The authors attempt to understand and record a list of issue-specific characteristics, market dynamics, and issuer-related data that are more likely to be related to likelihood to refinance. The authors then discuss the policy implications from these empirical findings.

Public Corruption in the U.S. States and Its Impact on Public Debt Pricing

Summary This study evaluates the levels of public corruption in the American states and their impact on the prices of public debt sold by underwriting banks to retail investors. Results suggest that the markups paid by retail investors to underwriters decrease significantly with the incidence of public corruption. The relationship remains significant even when existing anti-corruption enforcement efforts are taken into consideration. Extant literature shows that the issuers of public debt from relatively more corrupt jurisdictions receive lower prices from underwriting banks in wholesale transactions. We develop and empirically show the mechanism through which this can occur. We offer the first evidence that the public debt market exerts disciplining pressures on the American states with greater levels of public corruption. When purchasing state-issued public debt, retail buyers appear to demand narrower markups by factoring in public corruption. This, we argue, is an important reason why underwriting banks offer lower prices when dealing with less disciplined fiscal sovereigns.

State and Local Financial Instruments

The ability of a nation to finance its basic infrastructure is essential to its economic well-being in the 21st century. This book covers the municipal securities market in the United States from the perspective of its primary capital financing role in a fiscal federalist system, where subnational governments are responsible for financing the nation’s essential physical infrastructure.

Too Close for Comfort: Does the Intensity of Municipal Advisor and Underwriter Relationship Impact Borrowing Costs?

This research explores the intensity of the relationship between municipal advisors and underwriters, as well as their quality and location, to assess the resulting impact on borrowing costs for negotiated debt. The findings from this research have practical policy implications related to the proper composition of a local governments debt financing team. In addition, the empirical findings shed light on central aspects in debt management networks as determined by the round‐trip transaction (RTT) theory, which point at new levers that subnational policy makers may use to gain efficiencies when accessing the municipal debt market.

Impact of Bankruptcy Eligibility Requirements and Statutory Liens on Borrowing Costs

While bankruptcy protection remains an instrument of last resort, a recent wave of petitions has aroused the interest of key participants in the municipal bond market. To date, 12 states unconditionally authorize municipalities to file for bankruptcy protection, 15 states require that municipalities satisfy certain threshold requirements, while the remaining 23 states either explicitly prohibit or have not specifically provided this authority to municipal governments. As bankruptcy protection rules influence bondholder risk exposures, we empirically test the significance of the state-specific bankruptcy eligibility requirements on borrowing costs. In a representative sample of general obligation bonds, empirical results suggest that municipalities eligible to file for bankruptcy protection pay a premium. The premium is higher if issuers are unconditionally authorized to file for bankruptcy protection, especially for debt with longer maturities. Findings also show that there are benefits associated with statutory liens; however, these benefits diminish with maturity.

Income inequality and the growth of redistributive spending in the United States (US) states: is there a link?

Prominent public policy models have hypothesised that rising income inequality will lead to more redistributive spending. Subsequent theoretical advancements and empirical research often failed to find a positive relationship between inequality and redistributive spending, however. Over the last few decades both income inequality and redistributive spending have been growing in the United States states. In this work, we consider whether temporal variation in inequality can explain variation in redistributive spending, while controlling for a number of factors that covary with redistributive spending in the states. In an analysis of data for 1976–2008, we find that higher levels of inequality are associated with greater redistributive spending, offering empirical evidence that fiscal policy at the state level responds to growing levels of income inequality. Considering the growing role of state governments in welfare provision during the past several decades, this finding is relevant for policy researchers and practitioners at all levels of government.

Economic Crises, Economic Structure, and State Credit Quality Through-the-Cycle

The study examines “through‐the‐cycle” stability of S&P and Moodys state credit ratings to national and state level business cycles during 1977–2010. Additionally, the study evaluates the associations between economic concentration and credit quality in a long panel of state credit ratings. The findings suggest that, with other temporal effects held constant, the ratings of S&P and Moodys are not procyclical and are robust to ups and downs in national or state‐specific business cycles. Economic concentration is inversely associated with state credit quality and remains significant for the period of an average business cycle, controlling for national and state economic expansions and contractions.