4. Set Rules

                  LongTrust and OpenCollectiveSet RulesTreat People Fairly


Leadership strategies & Institutionalize Design Principles engaged by this support:

  • Institutional Design Principle #3: Well-Defined Boundaries​: Boundaries are the rules of the game that determine how the game is played. In order to win, the rules must be well-defined. This includes rules about who makes which decisions and the time horizon decisions will occur. 
  • Institutional Design Principle #4: Monitoring​: When people feel their actions are known to others and their reputations are on the line, people who are encouraged to play by the rules. And, financial sustainability is more likely when everyone plays by the rules.
  • Leadership Strategy #6: Maintain Capabilities to Reinforce Cooperative Behavior​: Financial sustainability requires cooperation, but cooperation requires reinforcement. Local government leaders can reinforce cooperation by the power of the pursue strings and by cultivating an organizational culture that values cooperation. 
  • Institutional Design Principle #5: Sanctions and Rewards​: Incentives can encourage doing either the right thing or the wrong thing. Be careful about noticing the difference and design your institutions accordingly.


 Rules define how decisions are made about public resources and the time horizon decisions will consider . Rules must be accompanied by a system of that brings transparency to decision-making. A system of monitoring encourages people to operate within the rules and helps them trust that other people are doing the same. However, people may sometimes be tempted to go outside of the rules. Hence, local government leaders must maintain the ability to reinforce cooperative behavior among people and local institutions must be set up to give people the incentive to cooperate. The objective is to encourage people to cooperate and work within the rules.

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YouTube Interview with Shane Kavanagh at 2018 GFOA Conference

YouTubeInterview with Laura Allen at 2018 GFOA Conference 


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