Search results

1 – 6 of 6
To view the access options for this content please click here
Book part

Enrico Guarini, Anna De Toni and Cinzia Vallone

This study attempts to analyze the role of governance mechanisms in municipal bankruptcy, which appears to be a neglected area of research. The analysis considers both the…

Abstract

Purpose

This study attempts to analyze the role of governance mechanisms in municipal bankruptcy, which appears to be a neglected area of research. The analysis considers both the organizational level (micro) and the regulatory system (macro).

Methodology/approach

We use a relevant case of municipal bankruptcy in Italy to discuss the influence of governance characteristics, such as the political and management structure, interaction, and behaviors. The issues related to the accounting system and external audits are also considered. The data for this study are obtained from secondary sources such as audited budgetary reports, public documents, and reports from the Supreme Audit Institution.

Findings

The study indicates that the spoils system can favor the politicians’ exercise of power over public managers and undermine the capacity to prevent and manage financial distress. Poor accounting and weak control systems may facilitate this process. The high turnover of top management throughout a mayor’s term in office may reflect political pressure to force accounting rules and achieve flexibility to obtain the expected results or to correct poor financial performance.

Practical implications

To avert municipal bankruptcies, regulations should consider enforcing ex ante control by external oversight bodies, forbidding risky operations and limiting the spoils system for financial management positions and internal auditors.

Originality/value

Municipal defaults around the world have indicated that regulations and audits are ineffective to prevent local governments from failing. A full understanding of complex mutual interactions between the mechanisms of governance and the behaviors of politicians and managers can provide valuable insights to prevent local governments from failing.

Details

Contingency, Behavioural and Evolutionary Perspectives on Public and Nonprofit Governance
Type: Book
ISBN: 978-1-78560-429-4

Keywords

To view the access options for this content please click here

Abstract

Details

The Overtourism Debate
Type: Book
ISBN: 978-1-83867-487-8

To view the access options for this content please click here

Abstract

Details

Contingency, Behavioural and Evolutionary Perspectives on Public and Nonprofit Governance
Type: Book
ISBN: 978-1-78560-429-4

To view the access options for this content please click here

Abstract

Details

Contingency, Behavioural and Evolutionary Perspectives on Public and Nonprofit Governance
Type: Book
ISBN: 978-1-78560-429-4

Content available
Book part

Abstract

Details

The Overtourism Debate
Type: Book
ISBN: 978-1-83867-487-8

1 – 6 of 6