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Throughout Europe, one of the main problems facing policymakers is that of falling rural populations. In many cases, this is aggravated by high levels of local government borrowing. Although researchers have sought to determine the causes of this debt, much remains to be known about the factors influencing the default risk of small- and medium-sized towns, information that would help them formulate policies to combat the loss of population. The aim of our study is to identify factors relevant to this default risk. We analyzed demographic, socioeconomic, and financial factors in a sample of 6456 Spanish local governments by their population size. Our findings show that financial policies applied to reduce this risk should vary according to the population size, as certain factors exert a specific influence on smaller municipalities. Nevertheless, socioeconomic and financial variables have more impact on default risk than demographic factors. Our findings are novel and useful for all concerned in combating the depopulation of rural areas in Europe, owing to the relevance of conclusions for the design of public policies based on the sustainability of public services in small municipalities. Points for practitioners The measurement of the default risk in local governments reveals very relevant information for the design of public policies against depopulation. Socioeconomic and financial variables have more impact on default risk than demographic factors. The evolution of the measurement of default risk reveals that policies against depopulation must be defined based on the size of the municipalities. The influencing factors on the default risk are interesting to decide if finance government investments through loans that allow the repopulation of small municipalities.

International organisations assert that political corruption is a major global problem. However, it is still unclear how to combat corruption. Previous research has studied corruption in central or local governments, rarely in regional ones. In this paper, we aim to identify factors influencing political corruption in regional governments. Using panel data, we analyse the statistical association between 29 economic, financial, political and socioeconomic variables and the corruption perceived by citizens, from January 2006 to September 2019. The results reveal that perceived political corruption is affected by government spending and ideological distance, among other factors. We propose several measures to reduce political corruption. Points for practitioners The study has found that political corruption needs to be combatted through different measures for each administrative level. Our results support the idea that the following variables influence the perceived level of corruption within the regional governments: the volume of government borrowing, the ideological distance between the voter and the government, the percentage electoral participation and the volume of dependent and immigrant population of the region. Likewise, we also confirm that regional governments with higher values on the Quality of Government Index are perceived as less corrupt.

In recent years, the financial sustainability of local authorities has been recognised as a concept of crucial importance in ensuring that public services may continue to be delivered to future generations. Although many European countries have implemented programmes to enhance their financial sustainability, local authorities are characterised by differing administrative traditions and achieve diverse outcomes in response to the reforms made. Taking a comparative approach, the present study identifies institutional, macroeconomic and microeconomic factors that might influence local authorities’ financial sustainability in England and Spain in order to determine and explain similarities and differences in the drivers and risk factors for financial sustainability in local authorities’ provision of public services. Points for practitioners This article is based on three major theories (agency theory, neo-institutional theory and stakeholder theory) related to the institutional, macroeconomic and microeconomic factors determining financial sustainability and aims to identify these factors comparing different contexts (English and Spanish contexts). This identification of factors that influence municipal financial sustainability could clarify what policymakers might have done to prevent the crisis, what they should do to prevent similar failures in the future and how the long-term provision of public services may be ensured.

Concern has been expressed by international organisations and in previous studies about the financial situation of local governments, and the question of debt has been identified as a crucial element in efforts to overcome the current financial crisis. However, the variables that can affect the financial soundness of these governments have not been sufficiently studied, despite their direct relation to the credit risk premium. In this article, we aim to identify risk factors for default by local governments, and provide useful information to municipal financial managers. We conducted an empirical study of 148 Spanish municipalities and analysed data from four years, applying a random effects logistic regression model. Our findings reveal that a lower population density, less dependent population, falling levels of per capita income and the presence of progressive local government are all risk factors for default by local governments. Furthermore, our findings indicate that the general financing structure variable and debt composition and maturity variable do influence the risk of default by local governments. Points for practitioners The findings of this article can provide useful information for managers and politicians responsible for the financial management of local governments, in particular, by enabling them to better understand the risk premiums assigned by banks. Specifically, by identifying the risk factors for default, this article highlights the warning signs of this risk, so that suitable arguments may be expressed in negotiating loan repayment schedules and interest rates, and in designing financial viability and restructuring plans.

Although the transparency and sustainability of governments are currently of great interest to researchers, few studies have specifically addressed these issues. Nevertheless, previous research has found sustainability transparency as a key issue in government–citizen relations, especially for local governments (LGs). The aim of this article is to identify factors that promote online transparency regarding the sustainability of public policies, by means of an empirical study of 62 LGs in the United Kingdom, Ireland, and Southern Europe. Our results show that the prevailing administrative tradition may influence the degree of transparency of LGs, with population, socioeconomic, and financial factors being relevant.

Although international organizations and prior literature have recognized the importance of sustainability reporting for governments nowadays, some studies have revealed that this is an issue that has received little attention and thus needs further investigation. This article studies the publication of information on sustainability issues by local governments, analysing the relationship between diverse levels of sustainability information disclosure and some socioeconomic, financial and population variables. Based on the increased use of the Internet by governments, the methodology applied in this study is to analyse the websites of 55 major towns and cities in Spain, seeking 61 items that are recommended in the Global Reporting Initiative guidelines. By applying multiple linear regression analysis, we analysed the influence of 13 factors on the sustainability reporting provided by these municipal authorities. The results show that social information is the most widespread, and that the dependent population has a positive impact on the sustainability disclosures. The major opportunities to improve sustainability practices lie in improving the disclosure of economic and environmental information, through the publication of formal sustainability reports and the enhanced coordination of information published individually by different departments. Points for practitioners The results obtained highlight several issues of particular interest for managers. On the one hand, the public sector financial crisis has heightened the need to legitimize government actions. Moreover, the incidence of the variable ‘dependent population’ on the disclosure of sustainability information suggests that there is an important relation between the population structure and such disclosure, highlighting the need to consider the age of the population and its evolution over time as the basis for creating specific reports on sustainability. The public demand for information on sustainability does not depend on the level of taxes paid. Finally, local governments are not motivated by their level of financial autonomy with respect to information about their commitments on economic sustainability.

Changes in financial reporting systems are relevant to the usefulness of governmental financial reporting in implementing New Public Management (NPM) reforms. The International Public Sector Accounting Standards, published by the International Federation of Accountants, seeks to improve the financial information reported. The aim of this paper is to analyze whether Fair Value Accounting (FVA) could improve the usefulness of governmental financial statements for citizens under NPM reforms. To achieve this aim, this paper examines the opinions of the National Accounting Standards Setters on the utility of FVA in the introduction of NPM models in countries under different administrative traditions. Our results show that FVA could promote successful NPM reforms, enhancing the implementation of the postulates of efficiency, transparency, and benchmarking analysis. Likewise, the administrative tradition could influence National Accounting Standards Setters’ viewpoints regarding the capability of financial information based on FVA to meet the new information requirements under NPM models.

In the administrative reforms that countries with emerging and transitional economies are undertaking, the choice of the method to be used for government accounts evaluation is a crucial issue, as the replacement of historical cost by fair value evaluation could affect the success or otherwise of the administrative reforms in these countries. In this article, we analyse the opinions of the National Accounting Standards Setters (NASS) regarding the utility of Fair Value Accounting (FVA) proposed by the International Public Sector Accounting Standards (IPSAS) in the development of administrative reforms in transitional and emerging economies. To achieve this, we perform a survey of the Official National Accounting Standards Setters in these countries, to study the relevance and reliability of financial government reports based on fair value model. Based on the opinions of NASS in sample countries, the findings show that the implementation of fair value in Transitional and Emerging Economies could contribute to administrative reforms, mainly through the enhancement of the usefulness of government financial statements for purposes of transparency and efficiency measurement. In addition, in countries in transition, NASS opinions show that the crucial factor for the usefulness of fair value is the type of assets held by public organizations, but in emerging countries NASS think that the main factor in this respect is the existence of markets where they can be traded. Points for practitioners For public managers in Transitional and Emerging Economies, the findings of this article may be useful. The findings show how the implementation of international accounting standards can contribute to successful administrative reforms, through the improvement of financial transparency and the evaluation of the efficiency of public sector services. In addition, we identify determining factors of the usefulness of financial information for administrative reform purposes in Transitional and Emerging Economies, on an individual basis.

International Public Sector Accounting Standards (IPSAS) are an essential quality-control factor for Public Sector Accounting Systems in European Union member states. The compliance of the latter systems with IPSAS could be influenced to a large degree by perceptions of how useful these standards are in enabling the needs of financial information users to be met. Therefore, the aim of this article is to investigate the capability of fair value accounting to improve the usefulness of governmental financial information so that administrative reforms may be undertaken with the implementation of New Public Management (NPM) postulates. The theoretical section of the article studies the relevance of fair value accounting with respect to meeting the information requirements for implementing NPM models. This is followed by the results of empirical research carried out to determine the opinions of one of the main groups of information users concerning the practicality of fair value accounting and its association with the solvency and feasibility of fair value measures. To achieve this aim, we applied the χ2 test and the ρ Spearman test and obtained findings about the capability of fair value accounting to meet the new information requirements under NPM models more effectively than under historical cost accounting.