Does financial health influence the re-election of local governments?
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Uploaded by Marco Bisogno
Uploaded date: October 31, 2019
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Publication date
September 02, 2019
Paper language
Abstract
Purpose
The purpose of this paper is to investigate the possible influence of financial health of local governments (LGs) on the re-election of politicians.
Design/methodology/approach
The study investigates a sample of 129 Italian LGs with more than 50,000 inhabitants for the period 2008–2014, resulting in 903 observations. A regression model has been implemented, where the dependent variable refers to the probability of re-election, and different dimensions of financial health are the independent variables.
Findings
Budgetary and service-level solvency influence positively the probability of re-election of the major, while the ability of the government to generate liquidity to pay its short-term debts is not statistically relevant. Moreover, the sustainability dimension of budgetary solvency is more relevant than the flexibility and vulnerability dimensions.
Practical implications
To be re-elected, local politicians are advised to pay attention to and preserve the social welfare of citizens with the available resources.
Originality/value
This study adds fresh insight to the literature on financial health, emphasising the relevance of public financial management in the re-election of local politicians.
The purpose of this paper is to investigate the possible influence of financial health of local governments (LGs) on the re-election of politicians.
Design/methodology/approach
The study investigates a sample of 129 Italian LGs with more than 50,000 inhabitants for the period 2008–2014, resulting in 903 observations. A regression model has been implemented, where the dependent variable refers to the probability of re-election, and different dimensions of financial health are the independent variables.
Findings
Budgetary and service-level solvency influence positively the probability of re-election of the major, while the ability of the government to generate liquidity to pay its short-term debts is not statistically relevant. Moreover, the sustainability dimension of budgetary solvency is more relevant than the flexibility and vulnerability dimensions.
Practical implications
To be re-elected, local politicians are advised to pay attention to and preserve the social welfare of citizens with the available resources.
Originality/value
This study adds fresh insight to the literature on financial health, emphasising the relevance of public financial management in the re-election of local politicians.
Preferred Citation
Cuadrado-Ballesteros, B., Santis, S., Citro, F. and Bisogno, M. (2019), Does financial health influence the re-election of local governments?, Journal of Public Budgeting, Accounting & Financial Management, Vol. 31 No. 3, pp. 345-363.
Keywords
Agency theory, Local government, Voting behaviour, Financial health, Financial condition, Re-election,
Email
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Category
Other
Type of Paper
Published paper
