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After highlighting the breadth and complexity of the concept of sustainability and highlighting the role of local authorities in sustainable development, this chapter aims to interpret how sustainability management can consider the concept of financial sustainability in the context of local governments. It does this through the following specific objectives: 1) defining financial sustainability, considering it not only autonomously, but in an integrated manner with respect to the typical sustainability dimensions (environmental, social, and economic) that are usually involved in the local authorities activity; 2) proposing the main stages of the sustainability cycle in the local authorities to highlight the key moments and the role of financial sustainability; 3) analyzing some aspects of financial indicators as tools for measuring the financial side of the sustainability profile of a local government. In order to reach the aim of the chapter, the research methodology followed is the literature review.

The financial crisis has made the theme of economic development particularly significant. Analysis of this topic cannot ignore a key actor, that is, public administration. Here, we focus on all the Italian municipalities ( n = 7,978), analyzing the relationship between local public policies (in terms of municipalities’ governance and local governments’ financial engagement) supporting urban economic development and local entrepreneurial presence (total number of active firms). Applying the general least square (GLS) method for over 4 years (2014–2017; n = 31,912 observations), we find that the financial autonomy of cities and their financial efforts toward international programs, agriculture, agri-food and fisheries, tourism, culture, and economic development policies favor entrepreneurial presence. Our conclusion, contributing to public management and policy literature, also highlights some limits of the research and some related opportunities for further research on the subject.

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