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Studies have shown that political variables can influence the volume of government debt and have recommended investigating the joint effects of diverse factors on the risk of local government default. Considering the relation between economic management and political constraints, this paper examines the joint influence of political and systemic factors on the risk of loan default by Spanish local governments. To do so, we analyze 148 city councils for the period 2006-2011, using a logit model with panel data and an artificial neural network.The empirical results indicate that the financial risk of local governments is affected both by political factors specific to each case and, simultaneously, by systemic variables for the country. Specifically, political variables such as the mayor not having economics-related university studies, the under-representation of female councilors in the municipal corporation, municipal government by a party with a progressive ideology, and ideological alignment between the municipal and the regional government are all associated with greater financial risk. Moreover, rising national unemployment, an increased sovereign risk premium, the impact of the electoral cycle, and that of declining economic growth are all factors that may increase the risk of default. The findings presented are of great potential interest for governments, managers, national and international fiscal authorities, financial regulators, and citizens at large, because an understanding of the significance of these variables can help authorities make appropriate decisions to prevent and/or overcome problems related to municipal insolvency.

This paper considers the extent to which the Governor’s profile might influence the financial sustainability of the State government, via an empirical study of 50 US States during the period 2006–2013. The results obtained show that financial sustainability may be prejudiced when the State government experienced financial unsustainability during the previous year, and when it is led by a Governor who is a Democrat, Black, and/or long serving. A favorable influence on financial sustainability is produced when the Governor is female, serving in his/ her home State, has children and has a college education. These findings highlight factors that should be considered with respect to promoting financial sustainability via public policies, providing valuable information to facilitate supervision by the State Legislature (General Assembly) and Supreme Audit Institutions. Moreover, these findings enable opposition parties and other stakeholders as citizens to evaluate the financial viability of electoral promises.

This paper examines the sustainability tran-sparency of governments, i.e., the disclosure of information on the sustainability of their ac-tions. To do so, we identify contributory factors to the online disclosure of environmental, social, economic and general information by local gov-ernments in Nordic countries. Linear regression analysis was used to identify factors inf uencing the online dissemination of government infor-mation on sustainability; a factor analysis, as a precursor to linear regression, led us to reduce 14 explanatory variables to four factors: f nancial risk, demography, professional qualif cations and local government resources. The results obtained show that local f -nancial priorities have a greater impact on the sustainability-related content of governmental websites than does concern for the needs of the population. Furthermore, an organization’s dis-closure of its f nancial risks, together with greater awareness of stakeholders’ demands, could pro-mote transparency in the f eld of environmental, social and economic sustainability, while local demographic characteristics could foster the publication of information on environmental sus-tainability.