New Orleans: Political Economy
of Public Money
Aaron Schneider
New Orleans Political Economy
Workshop
10th of September, 2010
• Describe “satellite” governance
• Explore in New Orleans
• Generate hypotheses to explain why New
Orleans looks the way it does
• Move towards transparent and democratic
governance
Dimensions of Budgeting
• Comprehensiveness vs. Off-budget, quasipublic entities
• Transparency vs. Obscure
• Legitimacy vs. Captured(?)
• Satellite Governance
– Multiple entities of public authority
– Inconsistent and obscure reporting
– Public finance decisions tend towards narrow,
private interests
Predicted vs. Actual NO Finance
Variable
Tax Revenues
Total Revenues Expenditures
Population
.704 (.055)***
1.78 (.122)***
Area
-26.00 (138.74) -69.32 (306.55) -10.76 (316.28)
Poverty
37044
(8853)***
39.74 (8.81)***
R2
13837
37363
(3883)***
(8582)***
17.92 (3.86)*** 41.07 (8.53)
***
.62
.68
N
146
146
146
New Orleans
Predicted
410968
1057775
1097012
New Orleans
Actual
% Difference
403252
946695
852828
-1.8
-10.5
-22.3
Wealth
1.91 (.13)***
.69
Satellite Entities
Legal Origin
Eg. Charter,
ordinance,
state law, state
Constitution
Administrative
Regulation
Eg. City civil
service rules,
budget
reporting
Political
Leadership
Eg. Mayor
appoints
majority
Fiscal revenue
and
expendituve
Eg. General
Fund or
earmarked
taxes
Revenues, $1000s
General
Fund
Official
Funds
Pension
Component
Units
2007 389356
2008 401145
395703
275539
85946
-155942
393876
295302
Noncomponent Public
Entities
Non-Public
Public
Money
Money
1462358
174028
1244384
185185
Component
Units
337118
350372
Noncomponent Public
Entities
1354670
1490384
Expenditures, $1000s
General
Official
Fund
Funds
2007 425915
273333
2008 462473
368751
Assets, $1000s
Primary
Government
2007 71529
2008 -11362
Pensions
646671
427342
Pensions
51266
52503
Component
Units
1743098
1710687
Noncomponent Public Entities
6249975
6056949
Audubon Commission
• 1870s Origins in reconstruction era
speculation
• 1914 Legal mandate to encourage private
profit
• 1950s Struggle between state government
and city administration
• 1970s Audubon Institute efficiency, private
profit
• 1990s incrementalist residue in Planetarium
Hypotheses to explain satellite
governance
• Efficiency – to ease red tape
• Incrementalism - because NOLA is old and
decisions accumulate
• Political Conflict – to hide power, privilege
from political rivals
• Crony Capitalism – to facilitate rent for private
actors
• Corruption – to facilitate illegal rents for
private actors