Explaining Sustainability Innovation in City Governments : Innovation Mechanisms and Discretion Types in Multi-Level Governance

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  • Jiasheng Zhang
  • Hui Li
  • Kaifeng Yang


Original languageEnglish
Pages (from-to)366-381
Journal / PublicationAmerican Review of Public Administration
Issue number5
Online published31 Mar 2022
Publication statusPublished - 1 Jul 2022


While existing studies have examined the separate effects of local governments’ internal conditions and external environment on local innovation, few have paid attention to their interactive effects. This study examines whether state-level rules regarding local discretion moderate the effects of city governments’ slack resources and learning, using local sustainability innovation as an example. We distinguish two types of discretion (fiscal and statutory) granted by state governments. Applying a difference-in-differences (DDD) approach with a longitudinal dataset of 238 U.S. cities, we find that fiscal discretion strengthens the positive effect of fiscal slack while statutory discretion enhances the positive effect of learning. The findings uncover the complex interactions between multilevel institutional arrangements and local innovation mechanisms.

Research Area(s)

  • discretion, innovation, multi-level governance, sustainability

Citation Format(s)