LAUSR

ABSTRACT This article investigates the role of social capital in public financial performance in the United States—a topic that has not been adequately examined in the public administration literature. Research in this area will provide insight into how the public sector can be managed more effectively, efficiently, and innovatively. Moreover, this research is timely, given the context of financial and economic recession that has left local governments in the United States with persistent and long-term fiscal challenges. Using county-level panel data from the state of Florida over a seven-year period, the article finds strong support for the hypothesis that community social capital is positively and significantly associated with public financial performance. Findings reinforce the need for deeper understanding of social capital, as well as other community-level factors that are external to public sector agencies, in investigations of the different dimensions of public sector performance. The article includes policy recommendations on how to recognize and build community social capital due to its instrumental value in public management.