Administrative intensity and financial sustainability: An empirical analysis of the Victorian local government system

Abstract

AbstractA substantial empirical literature has examined the relationships between organizational characteristics and performance across the public sector, including the determinants of financial sustainability in local government. However, with the exception of one 2020 source, no attempt has been made to investigate the impact of administrative intensity on municipal financial sustainability. To address this gap in the empirical literature, this article examines the influence of administrative intensity on financial sustainability in the Victorian state local government system in Australia, as proxied by financial sustainability ratios, over the period 2014/15–2018/19. In addition, we consider whether variations in the relationship between administrative intensity and financial sustainability exist between rural and urban Victorian local authorities. We find that administrative intensity significantly affects the financial sustainability indices of local councils. In addition, there are differences across rural and urban councils in the association between financial sustainability and administrative intensity. The study concludes with a brief discussion of its broader policy implications.Related ArticlesCurato, Nicole, and Simon Niemeyer. 2013. “Reaching Out to Overcome Political Apathy: Building Participatory Capacity through Deliberative Engagement.” Politics & Policy 41(3): 355–83. https://doi.org/10.1111/polp.12015.Van Acker, Elizabeth. 2009. “Service Delivery of Relationship Support Programs in Australia: Implications for the ‘Community Sector.’” Politics & Policy 37(6): 1307–29. https://doi.org/10.1111/j.1747‐1346.2009.00221.x.Wallis, Joe Tor Brodtkorb, Brian Dollery, and Muiris MacCarthaigh. 2017. “Commissions and Local Government Reform: Expressed Leadership Identities of Commissioners in Inquiries Proposing Municipal Mergers in Northern Ireland and New South Wales.” Politics & Policy 45(2): 285–308. https://doi.org/10.1111/polp.12199.