As Michigan faces the potential for yet another budget debacle, frustrated citizens and pundits wonder if there aren't institutional reforms that might mitigate the apparent inability of our state's government establishment to solve long-festering dysfunctions. Things like a part time or unicameral legislature, biannual budgeting, etc.
Unfortunately, there appears to be no correlation between these different institutional arrangements and the level of dysfunction in a state's political/government establishment. However, the inability to solve problems - and the depth of those problems - does appear to be correlated with another factor:
States with strong, politically-active unions - in particular public employee unions - tend to be the ones that have fallen and can't get up. Where unions are much less powerful and influential the worst dysfunctions have been avoided, both economic and governmental.
In short, at the root of Michigan's budget debacle and almost all its other major problems one will find a union, which helped the problem grow and now is stopping it from being fixed.
This view is not based on any systematic research, but on what I have observed personally in helping to set up clones of the MichiganVotes.org legislative voting record site in a number of other states, including some that have the institutional arrangements that reformers hope might "fix the problem" here.
For example, the Rhode Island, Maine and Kentucky legislatures are all part-time, and those states are just as messed up as two others I've examined, Michigan and Pennsylvania, which have full time legislatures. California and Michigan have term limits, but New York and those other states do not, and yet are just as messed up.
What all these state do have in common is the presence of politically powerful public employee unions, which are really a byproduct of powerful unions in general. This so skews the incentives on elected officials that they become incapable of even discussing the kind of transformational reforms needed by these states, much less acting on them.
Michigan's ongoing travails illustrate this: There's plenty of blame to go around on the Big Three's collapse, but abusive unions empowered by boneheaded labor and environmental laws (in particular the fuel economy mandate's "two-fleet rule") played a critical role.
The same goes for Detroit's schools, and its municipal government - catering to unions fostered the problems, and now those same unions are the primary obstacles to fixing them. Municipal budgets are crippled by binding arbitration for public safety employees that even then-Detroit mayor Coleman Young condemned, but unions prevent the legislature from reforming it, just as they halt reform of a law that makes it impossible to realize savings from consolidating services.
At the state level, wherever one looks there's a union standing athwart potential reform and crying "Stop!" Save money on prisons by privatizing a few of them? Then-candidate Jennifer Granholm promised the prison guard union she would close Michigan's single privately managed prison. Contain costs in universities? A strike in the midst of a virtual depression by Oakland University's coddled academic elite shows what happens when one tries. Save money and produce better outcomes for children by outsourcing some juvenile justice and foster care functions to private social service agencies? Despite bipartisan support a 2007 attempt to do so was gutted by the fact that 800 unionized state bureaucrats would have been displaced.
The union culture and mythos are deeply ingrained in Michigan's social fabric, and although they're starting to wash out the process won't be quick or easy, and certainly won't be brought about by "silver bullet" institutional changes. Ultimately, solving these problems requires nothing less than changing the climate of public opinion in a state.