Purpose – This paper explores how global pandemic crises affect the financial vulnerability of municipalities.
Design/methodology/approach – This paper is developed from the relevant literature an analytical
framework to examine municipal financial vulnerability before a global pandemic crisis and in its immediate
aftermath by mapping and systematizing its dimensions and sources. To illustrate how it can be used and
evaluate its robustness and flexibility, such a tool was applied to Portugal and Italy, two countries that
particularly suffered from the Covid-19 crisis.
Findings – The application of the analytical framework has shown how financially vulnerable municipalities
are to global pandemic crises. Financial vulnerability relates to issues ranging from institutional design to
internal financial conditions and the perception of the capacity to cope with a crisis. Results further reveal that
vulnerability has an inherent contingent nature in time and space and can lead to paradoxical outcomes.
Research limitations/implications – This paper provides a tool that can be useful for both academic and
public policy purposes, to further appreciate municipal financial vulnerability, especially during crises.
Practical implications – Municipalities can use the framework to better manage their financial
vulnerability, strengthening their anticipatory and copying capacities, while oversight authorities can use it
to help municipalities become less financially vulnerable or, at least, more aware of their financial vulnerability.
Originality/value – Municipal financial vulnerability to global shocks has not been explored extensively.
Also, the Covid-19 pandemic is different from previous global crises as it affected society overnight with the
implementation of lockdown and social distancing measures.