Political competition and debt: evidence from New Zealand local governments

Chatterjee, Bikram; Bhattacharya, Sukanto; Taylor, Grantley; West, Brian

doi:10.1108/arj-11-2016-0146

Cited by 8 publications

(5 citation statements)

References 72 publications

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“…2017; Drew 2018, 2019; Chatterjee et al. 2019). In this paper, we attempt to contribute to this embryonic empirical literature by investigating the relationship between the annual operating performance by local authorities and the overall satisfaction with local councils reported by local residents in annual surveys in the Australian local government system of Victoria over the period 2014‒15 to 2016‒17 (since in Australia the financial year extends from July 1 to June 30).…”

mentioning

confidence: 99%

All in the Mind: Citizen Satisfaction and Financial Performance in the Victorian Local Government System

Tran

Dollery

2020

Australian Accounting Review

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While a significant body of literature exists on local government efficiency, much less is known about its effectiveness, especially financial performance and resident satisfaction. To address this gap in the empirical literature, the present paper uses system‐wide official annual data on resident satisfaction in the Victorian state local government system in Australia to investigate the relationship between annual net operating results and overall citizen satisfaction. In addition, in order to garner a deeper understanding of this relationship, we evaluated the assumption in the ‘near‐to‐zero balance’ public accounting literature that local residents prefer an insignificant annual balance in operating performance compared to substantial annual losses or surpluses. We found that there is a significant negative association between overall satisfaction and its components and financial performance for Victorian local government as a whole. However, this association is largely restricted to rural councils with surpluses. By contrast, we find no relationship between satisfaction and near‐to‐zero balances. We conclude by considering the implications of our findings for both the public accounting literature and local government policymaking.

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confidence: 99%

All in the Mind: Citizen Satisfaction and Financial Performance in the Victorian Local Government System

Tran

Dollery

2020

Australian Accounting Review

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“…Besides the soft budgeting problem, political competition at the local level is a key predictor of the debt of local governments (Chatterjee et al, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

The issue of sustainability in a highly centrally regulated fiscal model of local governments: an empirical study

Bethlendi

Lentner

Nagy

2020

ARJ

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Purpose This study aims to assess the sustainability of local governments in a highly centrally regulated fiscal model. Design/methodology/approach This paper uses a novel approach, a broad data set of almost 3,200 local governments and network methods. This paper analyses financial data from annual reports and other socio-economic sources using cluster analysis. Findings Even in this model, local governments show significant differences in terms of long-term sustainability. Investments do not compensate for the depreciation of tangible assets at a significant part of local governments. A specific type of soft budget constraint can be noticed. Heads of local governments do not “play” for subsequent ad hoc bailouts by the central government, but rather engage themselves in political competition for development subsidies. A further finding of this study is that shrinking populations itself does not explain the differences in local governments’ financial management. Research limitations/implications Further directions of research include the application of an extended approach to sustainability that gives an account of the availability and quality of local services, as well as aims to identify the qualitative social characteristics (success criteria) of the local government financial management. Practical implications The findings can be useful for policymakers, state audit offices, auditors, voters, users of public services and other stakeholders. Social implications The paper argues in favour of moving away from the financial balance in its narrow sense to a long-term and broader term of financial sustainability. Originality/value The findings provide new empirical evidence about the accounting-based measurement of financial sustainability in local governments.

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“…The Indonesian government experienced a deficit in the government budget because tax revenues were unable to finance all government spending, including investment in sectors important to the economy and then to seek funding from foreign debt to close the shortage gap. Chatterjee et al [2] and Ncanywa and Masoga [3] conclude that the foreign debt incurred by the government is related to high spending and low tax revenue.…”

Section: Introductionmentioning

confidence: 99%

Debt Sustainability Measurement Model in Indonesia using Fiscal Diagnostics

Rahman¹,

Rahmayani²,

Hapsoro³

2022

Proceedings of the 4th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2021, 27-28 Jul

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The purpose of this study is to measure sustainable debt in Indonesia using fiscal diagnostics. We used secondary data, including data on GDP, government revenue, government debt, primary balance, government debt and private debt from 2010-2020. The source of the data is from Indonesian Statistics, Ministry of Finance and Bank Indonesia. This research method uses fiscal diagnostics which analyzes the development of data on the ability of the government and the private sector to pay debts and interest on their debts. The ability to pay the debt is identified from performance of fiscal indicators to GDP Indonesia, (ii) Debt sustainability indicators Indonesia with three measurements; a) public debt service to revenue ratio, (b) public debt interest to revenue ratio, (c) public debt to revenue ratio. The results show that the budget deficit is within safety limit, which is below 3%, but the effects of the Covid-19 pandemic have made the deficit widen to 6% in 2020. The three indicator of sustainable debt show that the debt burden is increasing and the fiscal capacity of the country is expected to struggle to pay off the debt.

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Political competition and debt: evidence from New Zealand local governments

Cited by 8 publications

References 72 publications

All in the Mind: Citizen Satisfaction and Financial Performance in the Victorian Local Government System

All in the Mind: Citizen Satisfaction and Financial Performance in the Victorian Local Government System

The issue of sustainability in a highly centrally regulated fiscal model of local governments: an empirical study

Debt Sustainability Measurement Model in Indonesia using Fiscal Diagnostics

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