Strategic planning has the potential to enable cities to weather the effects of fiscal crises. City officials can use the information gathered though internal and external scanning to implement fiscal policy changes that can minimize their governments’ exposure to external fiscal shocks, and to experiment with alternative service delivery arrangements that generate cost savings. Linking strategic plans to budgets allows cities to focus on core services, and reduce expenditures for nonessential programs. Strategic plans can also provide a framework for operations, facilitating closer cooperation and coordination among managers and workers in preventing the further deterioration in the fiscal condition of their organization. Can cities that implement comprehensive strategic planning adjust better to the current fiscal crisis and minimize their budget deficits? The results of advanced econometric analysis are inconclusive. Adjusting for selection bias and endogeneity, strategic planning is associated with the perception of improving city government fiscal health. Planning, however, has no effect on actual deficits.
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