Open AccessHow to Manage the Components of Financial Sustainability in Local Governments
Author(s) -
Serena Santis,
Alberto Incollingo,
Francesca Citro
Publication year - 2021
Publication title -
journal of management and sustainability
Language(s) - English
Resource type - Journals
eISSN - 1925-4733
pISSN - 1925-4725
DOI - 10.5539/jms.v11n2p111
Subject(s) - sustainability , business , finance , revenue , equity (law) , control (management) , autonomy , debt service coverage ratio , debt , accounting , economics , external debt , political science , management , ecology , law , biology
This study aims to evaluate three dimensions proposed by the IFAC (International Federation of Accountants) in relation to impact financial sustainability. These dimensions are service, revenue, and debt. In 2017 and 2018, a regression analysis was conducted for Italian local governments on the different components of financial sustainability. Based on goal-setting theory, and in combination with the ambition to pursue adequate good financial sustainability, significant results were demonstrated. It was seen that these local governments would have to maintain a good level of autonomy with current revenue. They would also need to control the quantity and quality of service in order to pursue financial sustainability. This study suggests practical implications for policymakers and the managerial class, and it seeks to identify methods to drive and keep financial sustainability under control. It also seeks to define current and future management strategies that focus on pursuing intergenerational equity in local governments.