Evaluating the Effectiveness of Public Procurement Performance Management Systems in Local Governments

Increasing the effectiveness, efficiency, and compliance of public procurement (PP) has become an ongoing concern for governments. Public administrations at different levels are realising that – in order for PP to fulfil its mission – appropriate control and diagnostic systems must be put in place. This study aims to investigate the architecture of PP performance measurement systems (PP-PMSs) in local governments, drawing on four case studies from Italy and four from Wales. The theoretical background is provided by the emerging literature on procurement PMSs in the private context as well as the specific literature on the public sector. PP-PMSs are specifically analysed with respect to performance areas covered (i.e., cost, quality, time, compliance, innovation, sustainability). Results show that performance dimensions should be extended beyond traditional cost measures, with KPIs not limited to those imposed by national/regional regulation. Furthermore, we show that this is likely to happen where the procurement function is recognised as strategic in the public institution.     

Biased Budgeting in the Public Sector: Evidence from Italian Local Governments

Abstract

The purpose of this paper is to analyse, in terms of presence, determinants and purposes, the misrepresentation of expected revenues during budget formulation and the misrepresentation of actual revenues during budget execution. To this end, we use six-year panel data from Italian municipalities with populations above 15,000. Our results suggest that overestimations of current revenues are more frequent than underestimations, during both budget formulation and budget execution. In terms of determinants, our results highlight the impact on revenue misrepresentation of both political orientation and fiscal stress. Finally, in terms of purposes, we show that revenue underestimation during budget formulation and revenue overestimation during budget execution may contribute to the formation of surpluses. The former, in particular, may allow mayors to create a ‘war chest’ in non-election years, which can then be used to increase net borrowing on the eve of elections.     

Towards Performance,Quality and Environmental Management in Local Government: the Case of Spain

The search for improvements in the management and quality of public services seems to be a constant in all public administrations, and there is an ever-increasing use of management techniques and models from the business sector. The aim of this paper is to show which management systems are being used by Spanish local governments to improve their management in terms of economy, quality and the environment. Our analysis is based on a questionnaire sent to Spanish local governments about the tools they use and the factors that influence their implementation. The results show that more efforts are necessary to implement performance measurement and total quality management, but they also show some positive aspects, such as the usefulness of performance measurement and its application to decisions in those local governments that have implemented it.     

The Impact of Political Leadership on Organisational Performance: Evidence from English Urban Government

Many commentators view the political management reforms of English local government with some scepticism, raising concerns about the desirability of stronger leadership and the efficacy of institutional reform in encouraging stronger leadership. Using data from a five-year evaluation of the impact of the Local Government Act 2000, this paper reports evidence suggesting that institutional variation does influence the way that organisations operate and can have a positive impact on their performance, though the results are mixed with the internal decision-making elements showing most difference, whilst there is less evidence of effects in relation to partnership working and engagement with the public. In hung and balanced authorities an internal focus on managing coalitions and party competitors is judged to impede the role of leaders in partnership working. In the concluding section, the paper develops the concept of facilitative leadership, which will continue to influence reform of local government and the practice of political leadership in local government. Policy-makers, by giving leaders the right mix of resources and incentives, can improve the effectiveness of urban political leadership and encourage the trend towards facilitative leadership.     

Technological Innovation and Its Impact on Public Sector Efficiency and Performance: Aerial Imagery in Property Tax Assessment Administration

ABSTRACT

Technological innovations can help public organizations deliver higher quality public goods and services at lower average costs. While a considerable literature exploring the determinants of technology adoption and diffusion exists, much less is known on whether technology innovations improve public sector outputs. This study investigates the impact of high-resolution, oblique aerial imagery, an increasingly common technology used by local governments in the US, on the inspection efficiency and quality of property assessment administration. Aerial imagery is often argued to be a low-cost substitute to in-person inspections of property. Drawing on data from 2013 through 2017 for property assessing districts in Texas, aerial imagery use is found to improve the rate at which properties are inspected as well as improve the quality of assessments. The results further provide evidence that investments in aerial imagery are best justified on budgetary grounds rather than as a means to improve organizational performance.     

Endogenous Determinants for Renegotiating Concessions: Evidence from Local Infrastructure

The engagement of local government in public–private partnerships (PPPs) for the provision of infrastructure and public services is a global trend. Light rail services, water systems, waste management systems, schools, sport centres and social housing are simply a few examples of sectors in which the private sector is becoming more actively involved with local authorities. Most of these engagements are conducted through the use of mixed companies and contractual concessions. However, both of these uses suffer from a major shortcoming – renegotiations. Contracts are often renegotiated within a few years of being signed, and some evidence reveals that the results might not protect the public interest. This article aims to understand how and why renegotiations of local concessions occur by examining the specific characteristics of contracts (endogenous determinants). To illustrate the discussion, a case study of a light rail system is analysed, exemplifying the effect of a contractual renegotiation. The authors argue that contractual renegotiation can be useful in decreasing contract incompleteness, but a poorly designed contractual clause can allow for opportunistic concessionaire behaviour.     

The Effect of New Legislation on the Disclosure of Performance Indicators: The Case of Spanish Local Governments

This article analyzes the effect of new accounting legislation on the disclosure of performance indicators in the financial statements of Spanish local governments. Based on agency and institutional theories, the article also assesses whether the disclosure of performance indicators is used to make the monitoring of local government performance easier for stakeholders or merely to project an image of good management. The results show that the enactment of new legislation has only led to a partial implementation, most local governments disclosing financial and budgetary indicators but very few providing indicators related to the performance of public services. The institutional theory (symbolic value) seems to be the rationale that best explains this pattern of disclosure.     

Predictors of an Effective Performance Measurement System: Evidence from Municipal Governments in Turkey

The study examines the predictors of effective performance measurement in the context of Turkish municipalities. Theoretical guidance of context-design-performance model has been utilized to examine the contextual and design factors which have influenced the effective use of performance measurement systems in Turkish municipalities. It is hypothesized in the study that external support and organizational support for the use performance measurement, and technical capacity for the performance measurement are associated with quality of performance measures and effectiveness of performance measurement systems in general. The results of the study supported the hypotheses of the study regarding the relationships among organizational support, technical capacity, quality of performance measures, and effectiveness of performance measurement. Although the results confirmed that external support has an indirect effect on effectiveness of performance measurement via technical capacity and quality of performance measures, the hypothesis regarding the direct effect of it on effectiveness of performance measurement was not supported.     

Identifying and Coping with Fiscal Emergencies in Ohio Local Governments

Abstract

This study examines the reasons fiscal emergencies occur in Ohio local governments and the strategies that local governments use to recover. In Ohio, fiscal emergencies have regularly occurred predominantly at the local level. This study aims to reveal the internal process that both bring on and ameliorates fiscal emergencies. Previous studies failed to differentiate between fiscal stress and fiscal emergencies and did not include the role of the Ohio Fiscal Emergency Law in assisting local governments in restoring long term fiscal health. This study finds fiscal emergencies in Ohio were caused by: (1) the increased costs associated with unfunded state-mandated programs and, (2) major economical downturns brought on by local plant closings. Local governments were found to have responded in the short run by strategies such as targeted expenditure cuts and in the long run by increased the use of economic development.     

Accounting Reform in Italy and Perceptions on the Local Government Consolidated Report

The article aims to explore the perception of local government (LG) financial officers on the users, the uses, and the utility of the consolidated financial report in Italy, since it was one of the first countries to expressly provide for compulsory adoption. A questionnaire was sent to a statistical stratified sample of LG, collecting 133 responses (response rate 17%). The results, tested through the structural equation model we observe that social legitimization pressure rather than accountability patterns or performance analysis drive more the adoption process. The evidence indicates that the report is perceived as a potential tool for pursuing performance assessment strategies in a group context. However, this potentiality depends on the coordination effort made by the LG. The article finds out the rise of the topic of the public governance and the role of coordinating the local public group.     

Revitalizing Local Government Performance Management: Further Dissecting the Role of Socioeconomic Status and Social Mobilization Policy

ABSTRACT

This article examines how socio-economic status and social mobilisation are linked to local government performance management in Nepal. As part of local government reform, Nepal adopted a social mobilisation policy in selected local governments to empower communities for their effective participation. Our results show that socio-economic status and social mobilisation have a significant relationship with performance management. Female literacy, for example, is strongly and significantly associated with performance management, while area has a significant positive relationship but population has only a weak positive relationship. In contrast, poverty has a significant negative correlation. More importantly, mobilisation has a significant, though modest, positive association with performance management particularly in participatory planning and budgeting, fiscal discipline, and administrative management. This indicates that improving the socio-economic status of citizens and their mobilisation for empowered collective action can be one important strategy to improve the performance capacity of local government.     

Assessing Public Participation Initiatives in Local Government Decision-Making in Malaysia

Increased public participation in government decisions contributes significantly to the enhancement of grass-roots democracy. This article assesses the level of involvement of local citizens in local government decisions in Malaysia. Public participation was assessed using questionnaires on the range and extent of initiatives used by local government. The questionnaires also probed citizens’ perceptions of these initiatives and expectations for greater citizen empowerment. Data were gathered from 206 local citizens randomly selected from six local authorities in the northern region of Malaysia. The findings reveal a desire on the part of local citizens to participate in their local government decision-making process.     

Adoption of Performance Measurement: Evidence of Mexican Municipalities

In this article we define and estimate empirical models to study the determinants of adoption of performance indicators by Mexican municipalities. Building upon previous studies, we prove whether the adoption decision depends on the locality size, variables related to resources, and the political/cultural differences. We implement the empirical models using the data from 300 municipalities for the year 2000. Unlike related literature that relies on surveys applied to local officials, our data from independent and dependent variables were obtained from different sources in order to avoid common-source bias. The estimated logit and probit models confirm the hypotheses.     

Coping With the Great Recession: Theory and Practice for County Governments

This article explores “best” and actual practices of county governments coping with fiscal stress. Using survey results from county commissioners in California and Georgia, it is possible to assess the recession's impact and identify strategies that have been used to deal with revenue shortfalls and how different taxes may have changed these tactics. It becomes clear that reducing expenditures is more commonplace than increasing taxes, and almost no counties are able to “do nothing” as the academic literature prescribes (Marlowe, 2009 Marlowe, J. 2009. “Can local government leaders formulate strategies that will actually—rather than hopefully—stimulate their local economies? Has history any record of such successes?”. In Navigating the fiscal crisis: Tested strategies for local leaders, Edited by: Miller and Svara. Prepared for the ICMA.  [Google Scholar]). Overall, the counties that are most successful at coping with the recession began to take action before they felt the recession's impact and subsequently are able to maintain service levels without dramatic changes to the way they budget.     

The Integration of Best Environmental Management Practices in Corporate Strategy: Empirical Evidence From Italian Local Governments

Local governments represent an important moving force in promoting sustainable development policies as they make up the level of governance closest to the citizens. The aim of this article is to examine whether Italian local governments exercise de facto their vital role in fostering sustainable development policies. In particular, we analyzed municipality behavior about adopting “green management strategies.” We investigated the main factors identified in management literature which might boost the adoption of these strategies. Several implications ensue from our findings. In particular, the research provides information to improve local government attitudes toward the sustainable development challenge.     

A Longitudinal Evaluation of E-Government at the Local Level in Greater Western Sydney (GWS) Australia

This research reviews and revisits the 14 local government websites to determine whether the GWS councils have improved their online services since 2009. The study has found that there have been significant developments and improvements in e-government services among the GWS councils, while these have been variable and in many cases there is scope for further improvement. This research is significant as a longitudinal evaluation can track the evolutionary paths of local e-government development and provides insights into the challenges and opportunities of e-government development at the local level in Australia.     

An Evaluation Analysis of E-government Development by Local Authorities in Australia

Local governments play an important role in moving forward towards the vision of a connected and responsive e-government. This research develops a set of evaluation criteria for evaluating local council's websites. By examining the current status of the local government websites, this research provides an overview of the level of sophistication of the e-local government development in Australia. The local governments in Australia have not developed truly sophisticated e-government services. The majority of the local government websites are primarily informational and they provide one way communication of information from government to citizens.

To identify the factors affecting the level of sophistication of local council's websites, a single case study approach is employed in this research. Top leadership support and management capacity and organisational and technical challenges are considered important for e-government development. User-centric website design and bridging the digital divide also play a role in the successful implementation of e-government.     

Budget Transparency in Local Governments: An Empirical Analysis

The aim of this paper is to shed additional light on the determinants of budget transparency in local governments. Our work is based on a Likert-type survey questionnaire specifically designed to measure budget transparency in small municipalities. The questionnaire is based on the IMF's revised Code of Good Practices on Fiscal Transparency (2007). Results from 33 Galician municipalities are used to assess its internal consistency and to test a battery of hypotheses on the determinants of budget transparency. While several previous findings of the literature are confirmed, some new results are also obtained.     

Towards Strong Local Governance: Current Reform Scenario in Fiji

This article examines how the historical context of poor central-local relations and inefficient service delivery structure is used by the current military-led government in Fiji as a ploy for its local government reform agenda. Based on an analysis of secondary information on local government structure and a review of the reforms undertaken by the Review/Reform Committee, this article identifies the concentration of economic and political power at the central level as one of the major obstacles towards empowering local governance in Fiji. The article emphasizes the need for effective institutional reforms to devolve governance and resources from the centre to the grassroots.