A bit ago, I criticized the Chrysler superbowl commercial, in which they touted Detroit as a model for the re-invigoration of America. I didn't explicitly state, but strongly implied, that it would be disastrous if the country followed the same path as Detroit, with corruption, bailouts, destruction of industry, and all the other maladies Detroit has brought upon themselves. I suppose you could extend the sentiment to Michigan as a whole, with Detroit being the major city there, but it turns out that would not be entirely fair: there is something pretty interesting going on in Michigan, which I think the country could indeed learn from.
I was not aware, until recently, of the Emergency Financial Manager law/system in place in Michigan, and in effect in several of the more destitute cities there. Basically, the law allows the state to appoint a financial manager if the city finances get critically bad, and empowers the manager to fix the problems (by cancelling contracts, firing government employees, reducing costs, etc.). Essentially, it allows for some fallback adult supervision if the irresponsible children/idiots running the city do a poor enough job. And... I think it's a great idea.
Granted, there is a substantial potential for abuse, and I would be very wary of such if adopting this paradigm in a broader sense, but the idea is fairly sound. Basically, it's a strong incentive for local government to not be reckless and irresponsible, and allow the financial situation to deteriorate through mismanagement and corruption. It also may allow for a certain amount of "cleaning house" in otherwise entrenched corrupt government, and incentivizes the organizations which do business for and/or with the government to not steal quite as much public money (lest their contracts be cancelled by the EFM, and their work contracted to less corrupt organizations). It doesn't solve any of the systemic problems, but it does give the people a fighting chance to right the ship after problems arise, rather than being held hostage to the unions and such.
Imagine, for example, if the EU were able to impose such a mechanism on Greece. There would be no more wrangling, negotiation, and double-talk to get ongoing bailouts; the EU would impose a EFM, who would unilaterally make the appropriate changes to restore fiscal sanity (ie: firing all the current corrupt government officials, cutting pensions, raising the retirement age, privatizing 90% of the current government's functions, selling assets, etc.). It would be a painful transition, to be sure, but Greece would then actually have a chance to restore its economy free of the socialist leadership which has destroyed it, and rebuild to prosperity, instead of wallowing in a perpetual austerity program where only the political elite have any chance of prosperity.
Moreover, the threat of such would serve as a powerful, real incentive for the governments of Greece and the other EU countries, to not stray too far down the path of overspending, borrowing against the future, and/or unsustainable entitlements. With the appropriate mechanisms in place, you wouldn't need bailout provisions, loan guarantees, negotiations about appropriate austerity measures, or anything of the sort. The EU could simply allow each country to manage its own finances however it saw fit, stepping in if and only if a country demonstrated a pressing need for responsible adult intervention, and staying only long enough to clean house, and get the country back on a fiscally sustainable path. You might even be able to convince politicians to be more responsible stewards for the countries in general (the holy grail of public policy governing governments, if you will).
So my hat off to you, Michigan: I stand semi-corrected in my thought that you had nothing positive in the way of public policy which could be emulated elsewhere. I think a great many governmental entities could benefit from EFM's or the like, and the ability to "clean out" existing government bureaucracies and entitlements could be a huge boon for a lot of people.