The purpose of this paper is to investigate the possible influence of financial health of local governments (LGs) on the re-election of politicians.
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.
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.
To be re-elected, local politicians are advised to pay attention to and preserve the social welfare of citizens with the available resources.
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.
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. https://doi.org/10.1108/JPBAFM-10-2018-0114
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