Local Governments Managing Austerity: Approaches, Determinants and Impact

Abstract

The global financial and economic crisis that hit Western countries between 2007 and 2008 has generated an extensive literature. Several policy responses are now recognized, based on the way governments reallocate scarce public resources across budget categories; these approaches have a differential impact on the sustainability of cuts and on performance and trust. What determines the choice of one approach over another is a relevant, yet unexplored, research question. The article highlights the factors driving the adoption of specific crisis management approaches. A conceptual model and key propositions derived from the literature are applied to the case studies of six local governments. A comparative analysis of the interactions among internal and external determinants through a multi-year timeframe provides valuable insights that improve our understanding of crisis management.

Council type and the determinants of municipal expenditure: A semiparametric analysis of South Australian local government

“…Across the globe, many national and provincial governments remain concerned over the ongoing financial sustainability and operational efficiency of their respective local government systems (Kiewiet & McCubbins, ). Over the years, a host of public policies has been employed in numerous attempts at improving the performance of local government (see, for instance, Cepiku, Mussari, & Giordano, ; Kuhlmann & Bouckaert, ). Public policymakers have used several policy instruments, including compulsory council consolidation (Allers & Geertsema, ), mandatory restrictions on expenditure and revenue (Overmans & Timm‐Arnold, ; Park, Park, & Maher, ), privatisation and contracting out (Bel & Gradus, ), and fostering the adoption of intermunicipal agreements on resource‐sharing and shared services (Bel & Warner, ).…”

Reciprocity matters: Idiosyncratic deals to shape the psychological contract and foster employee engagement in times of austerity

“…Following the 2007/2008 global financial crisis and subsequent recession, many Western countries are coping with austerity measures to reduce public spending (Cepiku, Mussari, & Giordano, ; Conway, Kiefer, Hartley, & Briner, ; Kickert, ). In relation to English local authorities (LAs), which are public sector organizations that are run by locally elected councillors and provide a diverse range of public services from waste management and recycling to education, this presents an immense challenge given LAs will have had their Central Government funding reduced by £16 billion between 2010 and 2020 (Local Government Association, ).…”

A Research on the Debt Sustainability of China’s Major City Governments in Post-Land Finance Era

“…In China, expenditures in LGs constitute more than 80% of total public expenditures, one of the highest percentages in the world [8]. It thus seems clear that improved financial management of LGs is a key ingredient in the future growth, prosperity, and sustainability of both industrialized and non-industrialized countries across the globe, especially in an era where crises may require them to be ready for resilience [9].…”