Developing a Model to Measure Financial Condition in Local Government
- 17 July 2008
- journal article
- research article
- Published by SAGE Publications in The American Review of Public Administration
- Vol. 39 (4), 425-449
- https://doi.org/10.1177/0275074008320710
Abstract
Various studies have sought to obtain a measure of the financial health of local authorities, via the concept of financial condition. However, in measuring this latter concept, two serious problems need to be addressed: The first concerns the inclusion or otherwise of socioeconomic variables in the proposed evaluation models, and the second, the difficulty of measuring the solvency in the level of services provided. Therefore, the authors have created a methodology to measure the financial condition of a local authority, including a variable to measure the quality of the services received by the population, and present a new treatment for the variables of the socioeconomic environment so that the financial and socioeconomic factors can be integrated. The application of this method to a sample of Spanish local authorities reveals its capability of minimizing the effects of the socioeconomic environment and maximizing the value of benchmarking, making comparisons between local authorities simpler and more effective.Keywords
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