Wilson, Meghan, City Auction: Municipal Response to Fiscal Distress in Detroit (November 4, 2014). Available for download at SSRN: http://ssrn.com/abstract=2519149

“Over the last decade, several metropolitan cities have been forced to think critically about their long-term financial solvency. This paper considers the tangible impacts of long-term financial planning in Detroit, Michigan. In July of 2013, Detroit became the largest municipality to file Chapter 9 bankruptcy in hopes of paving a road to fiscal solvency. During the process of reshaping the political institution because of Chapter 9, there have been various changes throughout the municipality. Using a mixed method approach, I will explore the levels of private interest of local services in the state of Michigan. Using documents from 2004-2014, I will analyze city budgets, contracts, and several other official records in order to assess the various factors that have led to bankruptcy and the current governmental response to the bankruptcy. In other instances of financially distressed public entities (i.e. schools and public services), private interests have entered the market to capitalize on the failure of the governmental institution — commonly referred to as disaster capitalism. This paper will explore what governmental structures were impacted by the bankruptcy and what new investors joined the rank as stakeholders because of the bankruptcy. This paper explores; 1) the economic and political implications of a larger private interest into public entities; 2) what happens when public goods become subject to competitive market dynamics; 3) Who is accountable when fiscal responsibility is at the forefront of a municipal structure.”