Public Value Contestation in the Era of Fiscal Austerity and Crisis: Lessons from the State Takeover System in Michigan

Drawing on the case of the state receivership or emergency manager system in four Michigan cities following the Great Recession of 2007, this chapter investigates the nature and substance of conflict among public values embedded in the fiscal emergency context. Qualitative content analysis of approximately 400 official documents collected from the four municipalities under the emergency management intervention highlights tensions among political and administrative values involved in this case and identifies underlying reasons for contestation. We use the grounded theory approach to make sense of the underlying context embedded in these administrative documents and to delve into the process of public value creation and the resulting tensions among public values. The findings reveal the dominance of the value of financial accountability over other democratic values, such as checks and balances, representation, self-governance, and local control. We also find that the value of financial accountability has been elevated by centralizing the decision-making process and strengthening the powers of unelected managers. The chapter offers implications of these findings for policy learning and strengthening public participation when there is evidence of public value conflict in the decision-making process, and suggests ideas and questions for future research.