As the role of local government expands to fill the gaps created by reduction in the federal government's involvement in the design of national policies, it is important to understand the variability and limits of a local government's capacity to adapt these policies. Policy instrument theory suggests the importance of the link between policy design and implementation success. This study expands policy instrument theory by linking a community's contextual capacity to its adoption of the design and operational criteria of a policy instrument. This linkage allows for the identification of some of the causes of effective adaptation of national policies at the local level. This study incorporates the socioeconomic and agency perspectives, derived from the theories of urban politics, economic/interest groups, and resource-dependency models, to explain the behaviors of local governments and local target groups that occur as a result of the implementation and the specifications of locally designed instruments.
A longitudinal and exploratory case study of municipal water pollution control of two Ohio communities is used to provide empirical evidence to shed light on the theoretical concepts and related hypotheses introduced here. In sum, the findings of this study provide evidence of the following: 1) local government's effectiveness in adapting a federal policy is positively related to its increased involvement in designing and implementing the policy; 2) the outcomes of adaptation vary among local governments in part due to the context-specific elements of design and operation of the regulations; and 3) the punitive measures a local regulatory agency is legally allowed to use to insure compliance and the willingness of the regulatory authority to use these measures are highly correlated with the socioeconomic profile of the local community and the agency's resource independence.
This study adds to the details on policy instrument theory, and cautions against the over-simplification of the theory's conventional advice that "tool substitution" would bring success to policy implementation by replacing one tool with another. This study suggests that to fully utilize a policy instrument's potential, some attention must be focused on a local government's capacity to design and to implement policies. This study suggests that the way the instrument is designed and implemented by the local government is related to the socioeconomic profiles of the local community and the local agency's level of resource dependency. The relationship between the local contextual capacity and the local government's adoption of design and operational criteria of regulations affects the degree of effectiveness of local implementation of the national policy. This study provides a new perspective for examining how the contextual capacity of a local community interacts with its ability and willingness to adapt a national policy. It does this, in part, by studying the behaviors of local government and groups targeted by the policy. This study provides information to policy makers about what a local government can do, and suggests that the federal government designate resources and authority by taking into consideration the contextual capacities of local governments. This study also urges policy scholars to research the methods of incorporating contextual capacity into policy designs.