The Evolution of the State and Local Government Municipal Debt Market over the Past Quarter Century


  • W. Bartley Hildreth, Regents Distinguished Professor of Public Finance, Hugo Wall School of Urban and Public Affairs, and W. Frank Barton School of Business, 1845 N. Fairmount Street, Wichita State University, Wichita, KS 67260-0155. He can be reached at

  • C. Kurt Zorn, Professor and Associate Dean for Academic and Fiscal Affairs, School of Public and Environmental Affairs, 1315 East 10th Street, Suite 300, Indiana University, Bloomington, IN 47405-1701. He can be reached at


Much has happened in the municipal bond market during the past 25 years. This article provides a retrospective of some of the significant developments in the market during that period of time. These developments include passage of the Tax Reform Act of 1986, innovations in the market in response to changing economic and social conditions, and the regulation, increase in disclosure requirements, and proliferatioin of credit enhancements that renewed the efficacy of municipal securities for American state and local governments.