Does financial health influence the re-election of local governments?
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Uploaded by Marco Bisogno
Uploaded date: October 31, 2019
1157
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