Determinants of cutback management among US state governments: which cutback strategy should be used under certain context

Abstract

As fiscal crises have periodically arisen from the early 2000s, states can be expected to respond differently in terms of sustainment scenarios. However, few studies have systematically examined the choice of cutback strategies depending on the degree of organisational decline. Using a multinomial logit regression model, we strive to determine which factors result in the selection of certain cutback strategies. The results reveal that budgetary size is severely diminished, and that governments tend to make across-the-board cuts rather than employing specific strategies, including targeted cuts, which call for more comprehensive analysis. Additionally, the ideology of a governing party influences cutback decisions, and split governments tend to more commonly select across-the-board cuts. Unions also play an important role in choosing cutback strategies.