Financial Sustainability of Municipalities and Local Governments in Small-Sized Cities; a Case of Shabestar Municipality

Abstract

Lack of a comprehensive approach to municipalities’ revenue sources in the form of macro-economic system, changes and interventions, self-reliance and self-sufficiency policy enforcement have put financial sector of municipalities in unsustainable situation. Continuing of this situation will have undesirable consequences on cities and urban management. Access to favorable and sustainable revenue sources leads municipalities to play a more active role in urban environment and properly meet the needs of citizens. In this regard, this research intends to analyze Shabestar Municipality’s revenue sources in terms of sustainability measures during 2004-2014. Type of the research is applicable and the method is descriptive-analytic and exploratory. Data collection has been carried out either documentary or field survey by using scoring forms and interviews with Municipality officials. Data analysis has been conducted by using Excel, Shannon Entropy and TOPSIS techniques. The results obtained showed that the trend toward financial independence of municipalities and decentralization of sub-national authorities has had some trouble and now municipalities need financial support from central government to fulfill their obligations. Shabestar Municipality like many other municipalities in Iran depends strongly on low favorable and unsustainable revenue sources such as sale of municipal immovable properties, charges on surplus density, charges on removing parking etc.

Improvement of financial autonomy of the rural municipalities in Lithuania using the spatial modelling method

“…In their analysis of the phenomenon of the FA of a local government, the researchers have identified the following characteristics thereof: availability of sufficient financial resources (Burbulytė-Tsiskarishvili et al, 2018;Psycharis et al, 2016;Scutariu, Scutariu, 2015;Jemna, Onofrei, Cigu, 2014;Beer-Toth, 2009); proper allocation of the financial resources among the central and local governments (Slavinskaitė, 2017;Ulbrich, 2013;Stegarescu, 2005); capabilities and capacities for autonomous management of the financial resources by the local government (Skauronė, Miceikienė, Krikštolaitis, 2020; Tan, 2020; Kozera, Glowicka-Woloszyn, 2016; Scutariu, A., L, Scutariu, P., 2015; Cigu, 2014); sustainable assurance of balance between the revenue and expenditure (Tan, 2020;Beer-Toth, 2009;Mclure, Martinez-Vazquez, 2000); autonomous management of the tax base and tax rates (Stegarescu, 2005; Beer-Toth, 2009; Kozera, Glowicka-Woloszyn, 2016; etc. ), financial responsibility (Chen, 2022;Slavinskaitė, 2017;Oates, 1999), and financial sustainability Hajilou et al, 2018).…”

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“…Financial autonomy and the issue of revenue generation are one of the key issues related to local governments worldwide. According to Hajilou et al (2018), municipalities become unsustainable due to the absence of a comprehensive approach towards implementation of the autonomy policy, sources of revenue of the financial sector, municipalities, and macroeconomic system in the area of changes and interventions. Hence, along with FA, financial sustainability is The economic theories related to growth and development enable the researchers studying the FA phenomenon to identify the endogenous factors that are important for improvement of the FA of LGUs.…”

“…This raises the issue of "convenient dependence" of municipalities on the centralized allocation in the long run. The researchers (Satoła et al 2019;Hajilou et al 2018;Jakovljevic et al 2019;Jakovljevic 2013) have therefore made attempts to validate the need for a sustainable LGUs funding system. The rationale behind this kind of system is that the financial resources received by LGUs correspond to the expenditure incurred by them in implementation of their tasks.…”

Sharia Banking Towards Sustainable Finance in Palm Oil Industry

“…This green banking initiative is mutually beneficial for banks, industry and the economy. Hajilou (2018) revealed that "sustainability is meeting the needs of the present generation without compromising the ability of future generations to meet their own needs" (p. 83). Bakar (2017) stated that "the majority of companies to invest in the recycling and reuse of materials, the environmental friendly technology, internal training on green economy, the rest of the electorate and the purchase and use of materials with less impact simply because they believe that investment to ensure the preservation of nature around" (p. 139).…”