Risk Factors and Drivers of Financial Sustainability in Local Government: An Empirical Study

The current international crisis in public finances has made financial sustainability a key issue for governments. Although the European Union (EU) and other international organisations have recommended governments to monitor demographic and economic variables, few studies have considered the influence of these variables on financial sustainability. This paper seeks to identify and analyse the drivers and risk factors that influence the financial sustainability of local government. The findings identify both risk factors (unemployment and population aged under 16 years) and drivers (budgetary outcome) of financial sustainability, which may constitute a useful basis for decision-taking by managers and policy-makers.     

TIME FOR EU MATTERS: THE EUROPEANIZATION OF DUTCH CENTRAL GOVERNMENT

To what extent does the European Union (EU) affect national governments? This article seeks to answer this question by assessing the Europeanization of Dutch central government. Using data from a large‐scale survey among civil servants, we assess to what extent the EU affects the structure and culture of governmental organizations, as well as the activities of individual civil servants. On the basis of this analysis, we conclude that the impact of the EU both on individual civil servants and on organizations in Dutch central government is two‐sided: a small core of civil servants and organizations are deeply involved in EU‐related activities and this exists alongside a much broader base of civil servants and organizations that are less affected by the EU. These differences appear more clearly on the level of daily working practices than on the level of formal organizational structures. Nevertheless, the impact of European integration on government organizations remains limited to particular organizations and particular civil servants within central government.     

The Local Government Review: An Inter-Organizational Perspective

This article uses Benson's 'political economy' model of inter-organizational relations to interpret inter-authority relationships during the course of the local government review process in England (1992-95) and in particular to explain the preparedness of large numbers of district councils to support proposals which implied their own destruction. Six more specific influences are identified which led to this outcome:
(i) The changing pattern of expectations and perceived possibilities as the Review progressed.
(ii) The conflictual context of relations within the network linking individual counties and districts, and their respective associations.
(iii) The influence of the districts' national representative body - the ADC - which was arguing strongly for a 'super-district' solution.
(iv) The plausibility of the view of some mergers as de facto takeovers of one authority by another.
(v) The special nature of local authorities as (party) political institutions as well as public sector bureaucracies.
(vi) The rationing of information through central-local networks, in the context of 'unclear rules'.
It is concluded that with certain modifications Benson's framework provides a helpful explanatory mechanism.     

THE NATIONAL COORDINATION OF EU POLICY IN HUNGARY: PATTERNS OF CONTINUITY AND CHANGE

Although European Union (EU) membership generates similar functional pressures for national administrations, member states developed institutional arrangements that show marked cross‐country variation in the coordination of EU policy. This article examines and assesses the institutions and mechanisms established in Hungary for formulating policy positions on the domestic level. In line with the general features of central government, the system is highly centralized and hierarchical, and has been characterized by a comprehensive coordination ambition from its inception. The case confirms the primary importance of national institutional factors for shaping coordination systems, but also the relevance of more actor‐centered explanations for accounting for changes in the top decision‐making tier. At the same time, the Hungarian experience also draws attention to power relations within governing parties and prime ministerial involvement as important variables so far relatively neglected in the literature.     

WHY STRONG COORDINATION AT ONE LEVEL OF GOVERNMENT IS INCOMPATIBLE WITH STRONG COORDINATION ACROSS LEVELS (AND HOW TO LIVE WITH IT): THE CASE OF THE EUROPEAN UNION

The European Union (EU) inherited ‘indirect administration’ from classical international organizations: policies adopted by the international organization are subsequently to be implemented nationally by member states themselves, and not by bodies owned by the international organization. This arrangement has often led to legislation being incorporated and applied rather differently across countries. In order to harmonize implementation practices within the EU, we have witnessed a development from ‘indirect administration’ to more ‘direct administration’ in the sense that national agencies work closely with the European Commission, EU agencies and sister agencies in other member states, partly bypassing national ministries. Thus, stronger coordination across levels may counteract strong coordination at the national level. This ‘coordination dilemma’ seems to have been largely ignored in the literatures on EU network governance and national ‘joined‐up government’, respectively. The ambition of this article is twofold: first, the coordination dilemma is theoretically and empirically illustrated by the seeming incompatibility between a more direct implementation structure in the multilevel EU administrative system and trends towards strengthening coordination and control within nation states. Second, the article discusses organizational arrangements that may enable systems to live with the coordination dilemma in practice.     

Theorising European Integration of Local Government – Insights from the Fusion Approach

The article explores a new, dynamic conceptual framework to understand the relations between local government and the European Union (EU). It argues that, first, the fusion approach explains the systemic linkages between European integration and corresponding change within cities, counties and municipalities. Secondly, fusion dynamics are slowly emerging across European and local levels, whereby competencies and resources are merging and policies become synchronised under Europe 2020 and the European Cohesion Policy. Thirdly, the fusion approach provides an understanding of the attitudes of local actors towards European integration. In order to show the relevance of fusion, the article presents the findings of five empirical indicators: the absorption of EU policies and legislation; attention towards EU policies; institutional adaptation; EU-related action of local government and attitudes towards European integration. It also compares local government in two contrasting regions with regard to their political autonomy – North Rhine-Westphalia in Germany and the North West of England.     

Power to the parishes ‐ a (missed) opportunity

Parish and town councils form the lowest tier of local government in England, but have been left out of government proposals for a new duty for local authorities. The proposed new duty will give local authorities wide‐ranging power to promote economic and social well‐being. Unlike principal authorities, it is likely that these grass‐roots councils will have to rely on their power under s.137 to spend on activities outside their specific powers. This article reviews the findings of a recent national survey which was designed to assess the extent to which parishes are constrained by current s.137 arranagements.     

Reforming Serbia’s Local Government Finance System*

Abstract

Approximately 30 percent of all local government revenues in Serbia come from shared sales taxes. In the immediate future, the Government will have to replace sales taxes with a value added tax in order to meet EU norms. This will require a fundamental overhaul of Serbia’s intergovernmental finance system because unlike sales tax, the VAT cannot be shared on an origin basis. This paper outlines the origins of Serbia’s current intergovernmental finance system, summarizes its strengths and weaknesses, and then, in light of the necessity of change, sketches a set of reform proposals. These include creating a formula-based equalization grant funded by a fixed percentage of national budget revenues; introducing the legal possibility for block grants, categorical grants, and grants for delegated functions to fund the devolution of new responsibilities to local governments and to support specific (investment) programs; and restoring local government control over Serbia’s ad valorem property tax.     

POST‐ACCESSION POLITICIZATION OF NATIONAL EU POLICY COORDINATION: THE CASE OF SLOVENIA

This article focuses on how domestic and EU‐level political factors affect the functional aspect of the national coordination of EU affairs. Due to the idiosyncrasies of the post‐communist countries which have joined the EU since 2004, an analysis of dynamic changes in the national systems of coordination needs to focus on three factors: (a) functional pressures from the EU; (b) the consolidation of the national party system; and (c) existing traditions of politico‐administrative relations. The international economic and financial crisis is considered as a fourth factor that has affected the first three factors through the increase in the EU's 'informal intergovernmentalism', which adds to the politicization of EU matters. The Slovenian case points to an increased, though selective, politicization of EU business due to both national‐ and EU‐level factors.     

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.     

Advocating for the cause of the “victims of Communism” in the European political space: memory entrepreneurs in interstitial fields

The European Parliament (EP) adopted, between 2004 and 2009, a series of resolutions calling for recognition of Communist crimes and commemoration of their victims. This article focuses on an overlooked aspect of anti-Communist activism, the awareness-raising activities carried out by some Central European Members of the European Parliament (MEPs) to perpetuate the cause through networks that enable them to exchange institutional credibility, scientific legitimacy, and policy-oriented knowledge with Institutes of National Memory, parts of academia, and victims associations. Although they use the techniques of expertise and scandalization that are often effective in European institutions, these memory entrepreneurs have largely failed to further their claims in the European Union (EU) after 2009. In line with the turn toward “practice” in EU studies and the increased attention paid to agency in memory politics, this article contends that the conditions of production of their narrative of indictment of Communism accounts for this relative lack of success. Because their demands produced a strong polarization inside the EP while colliding with established Western patterns of remembrance, these MEPs’ reach remains limited to their Conservative peers from the former Eastern bloc. This weak national and ideological representativeness hinders their capacity to impose their vision of the socialist period in the European political space.     

Stability First,Development Second,Democracy Third: The European Union's Policy towards the Post-Conflict Western Balkans, 1991–2010

This article assesses total EU financial flows towards the Western Balkans between 1991 and 2010. It shows that, in the short term, the majority of support has been allocated to humanitarian assistance and socio-economic development. Although the EU has declared its interest in democracy promotion, democracy assistance ranks only third on the list of its financial expenditures in the Western Balkans. Therefore, although EU financial aid is consistent with official EU programmes, it is inadequate in the post-conflict context of the EU candidate and potential candidate countries that require support for democratisation.     

Research and Development,Competitiveness and European Integration of South Eastern Europe

This article explores the relationship between research and development (R&D) and competitiveness of South East European (SEE) economies from the perspective of European Union (EU) integration. Specifically, the article addresses the question of whether South East Europe is a potential asset or liability to the enlarged EU. SEE countries are quite diverse in terms of levels of competitiveness, with visible effects on the role of R&D, which is confirmed by analysis of R&D demand and supply factors. Improvements in the national innovation systems of SEE countries have largely taken place through vertical linkages on the supply and demand sides. However, a wider role for R&D will depend increasingly on the strength of horizontal linkages within national systems of innovation and their key agent—the local innovative business enterprise sector. This calls for a rethinking of science and technology policy, traditionally defined as a sectoral activity.     

Collaborative leadership and financial sustainability in local government

This research examines whether collaborative leadership significantly influences the financial sustainability of local government. Unlike other studies on financial sustainability, ours examined collaborative leadership’s effect on both subjective and objective financial sustainability by controlling for socio-demographic and economic factors (i.e., population size, population density, population aged over 65 years, unemployment rate, and gross domestic regional product) that influence the financial sustainability of local government. Ordinary least squares (OLS) regression analysis of data collected from local revenue officers as well as secondary data from local governments in South Korea revealed that collaborative leadership has a positive effect on the subjective perception of financial sustainability and a negative effect on the objective financial sustainability (net debt) of local government. These findings underscore the necessity of collaborative leadership for financial sustainability as well as the strategies needed for its development in local government.     

Assessing Member States' Management of Eu Finances: an Empirical Analysis of the Annual Reports of the European Court of Auditors, 1996–2001

The aim of this article is to gain some understanding of the way the European Court of Auditors (ECA) assesses European Union (EU) member states' performances in managing EU finances. To this end the ECA's annual reports for 1996–2001 have been analysed.
We find that the information provided in the ECA annual reports is somewhat unsystematic, which is the result of the ECA's approach to auditing and its working methods. A review of the literature, as well as our own empirical analysis, allows us to conclude that the ECA does not in fact live up to its own mission of providing relevant, objective reports. Our analysis suggests, for instance, that there is some ambiguity within the ECA due to differences in audit traditions within the EU. Improvements could be made by reducing the number of ECA members to three or five, by (further) integrating the traditional ECA audit and the audit within the framework of the statement of assurance, and by further integrating internal and external budgetary control within the EU.     

ARE ICTs IMPROVING TRANSPARENCY AND ACCOUNTABILITY IN THE EU REGIONAL AND LOCAL GOVERNMENTS? AN EMPIRICAL STUDY

This paper conducts an empirical study about the effect of e‐government on transparency, openness and, hence, accountability in 15 countries of the EU. Thus the effects examined cover over 84 per cent of EU population. The population also represents the different types of public administration styles that exist in Western developed countries. The paper compares the development and sophistication of 318 government web sites at sub‐national level and tests the impact of contextual and organizational factors. The study refers to regional and local governments since they play a key role both in the national pattern of government and in administering welfare policies. Benchmarking studies of e‐government are undertaken regularly by consultancy firms. Most of this literature focuses on central and federal governments in terms of examining trends in digital government. However, little research has been conducted from a comparative perspective on analysing the movement of EU countries to digital government at a sub‐national level.     

CONVERGING UNDER PRESSURE? COUNTERTERRORISM POLICY DEVELOPMENTS IN THE EUROPEAN UNION MEMBER STATES

This article analyses counterterrorism policy convergence among the 27 European Union (EU) member states between 2000 and 2006. While considerable academic interest has been devoted to the common European Union policy in response to terrorism after September 11, few studies have compared counterterrorism policy-making at the member state level. This gap raises the question whether the institutional framework of European counterterrorism policy-making has stimulated convergence of national policies. Data on five policy instruments for counterterrorism show that the aggregated implementation rate increased by almost 55 per cent in this period, which indicates a trend towards policy divergence within the EU as a whole. However, the findings also reveal significant variation in the level and pace of policy instrument implementation. One potentially important variable explaining national policy developments is the degree of political pressure from the EU on member states, while EU membership accession and national counterterrorism policy legacies were less important factors.     

BUILDING FOREIGN AFFAIRS CAPACITY IN THE EU: THE RECRUITMENT OF MEMBER STATE OFFICIALS TO THE EUROPEAN EXTERNAL ACTION SERVICE (EEAS)

The Treaty of Lisbon introduced common action capacities in the EU's external relations administration, notably the European External Action Service (EEAS). One essential capacity is staff resources. This article analyses to what extent and under what conditions the practice of staff recruitment to the EEAS is independent of government influence, and in particular the recruitment of officials temporarily assigned from EU member states. The data draw on interviews with officials from all 27 member states as well as the EEAS which is charged with the selection of national public servants to the EEAS. Key findings suggest substantial independence of recruitment to the EEAS, and this independence is facilitated under two particular conditions: (i) the supply of administrative capacities at EU level strengthens the capacity of the EEAS to nurture the independent recruitment of its personnel; and (ii) the recruitment of EEAS personnel is conditioned by pre‐existing organizational traditions, practices, and formats.     

COUNCILLORS’ RECEIPT AND USE OF CITIZEN INPUT: EXPERIENCE FROM NORWEGIAN LOCAL GOVERNMENT

The article expands citizen participation research by tackling participation from the viewpoint of elected officials – the recipients of citizen input. The article studies the role citizen input plays in elected officials’ decision making. Citizen input is defined as information elected officials obtain through direct contact with citizens and representatives of local associations. Using survey data from Norwegian local government, the article assesses how much citizen input councillors receive, and to what extent they use it to set local agendas. It is demonstrated that Norwegian councillors have a high degree of exposure to citizen input and that citizen input constitutes most councillors’ primary source of agenda‐setting inspiration. The article also examines differences in the extent to which councillors use citizen input, and draws on existing theoretical and empirical research to discuss how these differences can be explained. For example, findings that local government frontbenchers and highly educated councillors consider citizen input less useful than others do are explained by an analytical perspective emphasizing councillors’ varied needs for such information.