Abstract
Local government aims for financial sustainability in ensuring the wellbeing of citizens at the expense of their tax incomes. As members of local councils, local politicians are the highest decision-makers who are responsible for setting the aims and evaluating the outcome of municipal operations. Hence, local politicians’ notions on financial sustainability play an important role in sustainable decision-making. Although financial sustainability is seen important, previous research is limited in providing studies on the multidimensional nature of financial sustainability. Prior research has focused on the measurement of financial sustainability, often in the contexts of financial difficulties. This paper aims to answer this research gap by studying local politicians’ interpretations on financial sustainability and contributing to a deeper understanding of the phenomenon. This qualitative study employs interview data collected from 24 Finnish local politicians from five municipalities. Based on the content analysis of the interview data, financial sustainability is, in the eyes of local politicians, a political issue with multiple factors in and out of the reach of decision-makers. These notions could be utilized in future research in developing methods for measuring and managing financial sustainability in local governments.
Highlights
The World Commission on the Environment and Development Report (1987), better known as the Brundtland report, popularized the famous definition of sustainability as a “development that meets the needs of the present without compromising the ability of the future generations to meet their own needs” [1]
As a focal point of public administration, local governments have a key role in ensuring adequate and sustainable well-being for its citizens, which can be done by organizing quality public services to tax-paying inhabitants
This study aimed to investigate the interpretations of local politicians on financial sustainability when they are asked to evaluate the finances and economy of the municipalities they represent
Summary
The World Commission on the Environment and Development Report (1987), better known as the Brundtland report, popularized the famous definition of sustainability as a “development that meets the needs of the present without compromising the ability of the future generations to meet their own needs” [1]. As a focal point of public administration, local governments have a key role in ensuring adequate and sustainable well-being for its citizens, which can be done by organizing quality public services to tax-paying inhabitants From this basic idea of the public sector, two fundamentals of public financial management arise: (1) The public sector should have its economy and finances balanced in the long-term, which means, for instance, that taxes collected from inhabitants should be adequate to organize services for them, and (2) tax incomes should be used economically, efficiently, effectively, and . These fundamentals illustrate the financial sustainability of local government [4]. Failure to meet these fundamentals would result in damages to the primary purpose of the public sector and its entities [5]
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