Municipal structure and government creditworthiness: Evidence from Massachusetts municipalities

Municipal structure plays a vital role in the politics and administration of cities. Conventional classifications of municipal structures into mayor-council or council-manager systems have limitations, overlooking important subsidiary features. This study investigates seven structural characteristics of U.S. municipalities, constructing a political-administrative index to assess their impact on government creditworthiness. Theoretically, municipal structure affects government management in terms of accountability and efficiency, influencing performance and credit ratings. Empirical analyses, using data from ICMA surveys and Massachusetts’ Division of Local Services, show that the administrative or professional municipal structure receives higher credit ratings from Moody’s. These findings have significant scholarly and practical implications for understanding municipal structure and government creditworthiness.