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Does financial health influence the re-election of local governments?

Beatriz Cuadrado-Ballesteros (Department of Administration and Business Economics, Multidisciplinary Institute for Enterprise, University of Salamanca, Salamanca, Spain)
Serena Santis (Department of Political Science “Jean Monnet”, University of Campania Luigi Vanvitelli, Caserta, Italy)
Francesca Citro (Department of Management and Innovation Systems, University of Salerno, Salerno, Italy)
Marco Bisogno (Department of Management and Innovation Systems, University of Salerno, Salerno, Italy)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 2 September 2019

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.

Keywords

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. https://doi.org/10.1108/JPBAFM-10-2018-0114

Publisher

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Emerald Publishing Limited

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