Neo-Marxist theory has been widely used by urban scientists to explain patterns of fiscal stress among US cities during the 1970s. Despite its popularity, strict empirical tests are rare, and few attempts have been made to account for theoretical and empirical criticism and recent changes in the fiscal behavior of cities. A causal model is developed and tested for long-term debt of large US cities in 1975 and extended through 1985. The results contradict hypotheses of the neo-Marxist theory and show that it ignores the relevance of changes in urban fiscal strategies and underestimates the political flexibility of city managers.
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