Italian Local Governments Research Articles

The Use of 'Derivatives' by Italian Local Authorities in Public Finance Management. Still an Issue

The 2008 financial crisis and its aftermath have prompted academics and policy makers to question issues related to the public finance management and, more specifically, to the usage of financial derivatives by local authorities. This paper can be placed within the debate on whether derivatives may or not contribute to a healthy allocation of public resources. It meets the need to investigate the extent to which those derivatives transactions entered into by the Italian local authorities before being prohibited by the regulator in 2008, have been executed in conformity with their related disciplining provisions; a still actual issue if one consider the wide number of legal disputes in subiecta materia. In Italy, the need to prevent local administrations from postponing forward in time the financial burden of debt has driven the regulator to establish strict guidelines that could not be disregarded by intermediaries involved in the aforementioned transactions. Firstly, the scope of derivative transactions has been limited only to debt restructuring and, secondly, it was required to avoid both complex contractual forms, with the contextual request of a plain vanilla structure, and payment flows present values with an increasing profile. Thus, it is deemed necessary to analyse the remedies to challenge derivatives non-compliant with the ad hoc regulation: from the declaration of voidness (under Article 1418 of the Italian Civil Code) to the local authorities’ self-repealing authority (potere di autotutela) and to the possibility to settle the dispute. This work reaches the conclusion that the interpretative approach adopted by the Italian Corte dei Conti leaves no doubt about how to use derivatives in the public finance management.

The Process of Implementing the Accounting Harmonisation In The Italian Local Governments: The Case of Prato

The purpose of this paper is to describe the experience of the Municipality of Prato (Comune di Prato) in adopting the new accounting model proposed by the harmonisation process of local governments. According to the theoretical model developed by institutional theories, the implementation of accounting reforms is connected to external stimuli that are exercised on an organisation, and by the capability to interpret and implement the principles and requirements included in reforms. In accordance with the literature, the paper describes the process of implementation of the reform carried out by the Municipality of Prato, assessing the external and internal elements that have influenced the implementation. The paper analyses the most significant conditions and reactions to the change during the experimentation, which should introduce the reform. In this two year period, the new adopter has the chance to play a pro-active role in the process. This circumstance contributes to the development of the research, as it adds a component (the pro-active role), that has not been considered by the literature.

Socio-environmental reporting trends in the Italian local government: Thrive or wither?

Social and environmental reporting (SER) in the public sector has been widelydiscussed in the last years (Gray et al., 1996; Mathews, 1997; Parker 2005; Guthrieand Abeysekera, 2006; Guarini, 2002; Hinna 2004; Marcuccio and Steccolini,2005). However, despite the interest in this area of research, there are still a numberof calls to deepen the study of SER in the public sector (Lewis, 2008; Grubnikand Ball, 2007). In Italy, the literature shows the risk of adopting SER as a managementfashion, more than a conscious process of organizational change (Marcuccioand Steccolini, 2005). This paper investigates about the reasons for theadoption and eventual abandonment of SER by local government in Italy.

Public Managers’ Skills Development for Effective Performance Management: Empirical evidence from Italian local governments

Performance management has become an important element of the reform agenda of public sector around the world. However, scholars and practitioners highlight that many public administrations do not manage performance very well. A ‘litmus test’ of the success of a performance-based reform is observing whether public managers use performance information to make better-informed decisions. Having said that, the aim of this article is to see whether public managers of Italian local governments in the Apulia region (the South of Italy) use performance information after the last performance-based reform (Brunetta’s Reform: decree No. 150/09). The learning purpose is analysed and discussed. The research may suggest scholars, practitioners and policy makers the routes for developing performance utilization in difficult organizational contexts where performance management systems do not work.

The Evolution of Client‐Consultant Relationships: A Situational Analysis of IT Consultancy in the Public Sector

AbstractThis research proposes a situational understanding of the role of con‐sultants. The analysis is grounded on a case from Italian local government over a ten year period. The case is one of the earliest adopters of an ERP system in the public sector. The paper extends current understanding of client‐consultant relationships by developing a specific picture of changes in the role of consultants over time. In the case analysed, multiple changes in client‐consultant relationships occurred. They were due to particular historical contingencies in the evolution of the structure of expertise in the field. The case contributes to knowledge on consultants by contrasting bilateral and instantaneous accounts of client‐consultant relationship with a perspective that overcomes the distinction between context and individual action.

Context and Mechanisms in Administrative Reform Processes: Performance Management Within Italian Local Government

ABSTRACT This article aims to present new research on the politics of public management reform in Napoleonic countries. Drawing on the institutional processualist approach, the empirical analysis tracks and explains the trajectory and outcomes of episodes where performance management has been introduced at the local level in Italy. The comparative case analysis shows that plausible causal explanation of the outcomes of public management reform can occur only if researchers are attentive to the interaction between social mechanisms and contextual features together with their interconnections through time.

Italian Local Governments and Costs Control

The Legislative Decree n. 286/99 establishes different typologies of management control for the Italian Local Governments. As a consequence, management information systems play a crucial role in the resource allocation process. More specifically, the information system has to take into consideration two dimensions: the ability to satisfy the service request, and the cost control. Indeed, services are provided thanks to public resources and imply a citizen sacrifice. This paper focuses its attention on current or potential costs control tools. Despite the above mentioned decree, evidences from a field research on thirty Italian Local Governments highlight a poor usage of cost information systems.

Decentramento e mercato del debito pubblico locale (Fiscal Decentralization and the Market for Local Governments' Debt)

New opportunities and risks arise from the growing role of Italian local governments as public debt issuers on credit and financial markets. The paper analyzes the present institutional framework, and characterizes a reform implementing a stable and efficient "market" for the Italian local governments' debt (based on three pillars: bonds, bank loans and loans by the Cassa Depositi e Prestiti) compatible with the ongoing fiscal decentralization process. JEL Codes: H74, H77, R51 Keywords: Debt

Financial Distress and Italian Local Governments: Debating the national special legislation on “deficiterietà strutturale” and “dissesto finanziario”

Zusammenfassung Eine Ubersicht uber die italienischen Rechtsvorschriften betreffend notleidende Kommunen wird prasentiert, um sowohl die Art der finanziellen Notlage als auch die Haltung der Zentralregierung gegenuber notleidenden italienischen Kommunen zu erforschen. Im Allgemeinen scheinen italienischen Kommunen haufig in Praktiken des finanziellen Missmanagements verwickelt zu sein, die, obwohl sie weitgehend toleriert werden, zu kritischen finanziellen Situationen fuhren konnen. Verfugbare nationalen Daten scheinen eine Verschiebung in der Haltung der Zentralregierung vom allgemeinen zum besonderen Formen der Intervention zu bestatigen, insbesondere im Falle von grossen Kommunen. Resume Cette etude presente un apercu de la legislation italienne sur les gouvernements locaux en detresse financiere, en explorant la nature de la detresse et l'attitude du gouvernement central par rapport aux gouvernements locaux en detresse. En termes generaux, ces derniers semblent etre largement impliques dans des pratiques «vicieuses» de gestion financiere, capables de se transformer en situations critiques de detresse financiere, bien que tres tolerees. Les donnees disponibles semblent confirmer l’existence d’un changement, du generique au specifique, des formes d'interventions du gouvernement central, en particulier dans le cas des grandes villes.

Public property management in Italian municipalities

PurposeThis article aims to present an overview of the main issues related to public real estate management in Italian local governments and to define a reliable approach for the employment of real estate properties during the time.Design/methodology/approachThe research defines a theoretical framework that takes under consideration the “key variables” that affect the strategic management of a real estate asset portfolio. The suggested approach may help public managers in the decision‐making process, enhancing the performance of the organization and the accountability in favor of the stakeholders.FindingsThe results demonstrate that there are still several omissions in the management of these assets and that strategies adopted have not been centered on a preliminary analysis of the financial, economic and social fallouts in the mid‐long term, mainly answering to short‐term political needs and budgetary constraints. Unlike experiences developed in other European countries, in Italy the main answer was the divestment of real estate assets, assumed as a “first best solution”.Practical implicationsThe article suggests a systemic and multidimensional approach for the management of a real estate portfolio and aims at developing a depth of knowledge in a field such as public property management, which can still be considered essentially unexplored by Italian literature.Originality/valueThe paper emphasizes the strategic relevance of the subject for politicians, managers, technicians and researchers involved in the management of a real estate portfolio.

An analysis of the Italian governmental guidelines and of the local governments' practices for social reports

PurposeThis paper seeks to analyse social report guidelines and practices within Italian local governments (ILGs). First, it compares the contents of the two Italian governmental guidelines for developing social reports in public sector organisations with the Global Reporting Initiative (GRI) guideline, to determine similarities and differences in disclosures. Second, it examines a group of social reports issued by ILGs, to explore the incidence, frequency, and quality of disclosure, as against the GRI guideline.Design/methodology/approachThe study uses content analysis to test the nature/content of the governmental guidelines, and to determine what was disclosed in a group of ILGs' social reports. The paper analyses the social reports by applying the Guthrie and Farneti coding instrument, extended by including the Italian governmental guidelines.FindingsSeveral observations emerge from the present study. First, from the comparison of the GRI and the Italian governmental guidelines, it emerges that only a few categories of the latter are similar to the GRI and these concern mainly general aspects. Second, the disclosure of categories and elements in the social reports, as against the coding instrument, was found to be fragmentary. The paper concludes that the Italian governmental guidelines are of a managerial nature, and they have little to do with sustainability, except for aspects related to labour.Originality/valueLittle research has been published on social reporting practices within the public sector, unlike the private sector. In Italy social reports are an emerging practice, with a growing interest paid by the government and academia. Nevertheless, published research is mainly of a normative nature, and there is a gap on what actually is in social reports.

Formal or Substantial Innovation: Enquiring the Internal Control System Reform in the Italian Local Government

Understanding the reasons for the failure or the success of reforms is an issue that has recently attracted theattention of many scholars in the public sector field. The present study tries to contribute to this debate focusingon the social and cultural environment of the communities wherein the reforms are introduced as well as on theirstructural characteristics. The research is based on a survey carried out on a representative sample of Italianmunicipalities, whose aim is to understand the state of accomplishment of the Italian local government financialmanagement reform. To this end, a set of internal control tools and techniques is analysed to assess whether theyhave been adopted and how they have been used. The findings of this part of the study are then related to the sizeof the entities – used as a proxy for the organizations visibility and complexity – as well as to their geographiclocation – used as a proxy of their socioeconomic environment. Results show that both the social and structuralcharacteristics have influenced the reform accomplishment.

Coming Back Soon: Assessing the Determinants of Absenteeism in the Public Sector

This study explores how different factors influence absenteeism in the public sector. In particular, it investigates whether absence rates at work vary as a result of the individual personal traits of civil servants, some organizational features of governments and the context where public agencies operate. The study elaborates on the data on self-reported days of absence for all civil servants working for Italian regional and local governments. Our analysis of the Italian case shows that factors linked to the community where these governments operate influence the absence trends of civil servants; cultural differences in particular (that is different political cultures) are reliable predictors of absenteeism. We then assess the potential areas for research and suggest policies for countering absenteeism in the public sector based on our analysis.

Analysis of Solvency in Italian Local Governments: The Impact of Basel II

This paper proposes a classification model of the Financial Reporting of Italian Local Governments (ILGs) and a grid of indicators supporting financial analysts in their solvency ratings. Due to their increased financial autonomy, ILGs increasingly need to resort to various forms of borrowing. However, the Basel II agreement requires financial institutions to carry out a thorough assessment of the creditworthiness of all potential borrowers, including ILGs. After reviewing the main criteria adopted by rating agencies for their analyses, this paper focuses on the assessment of the financial situation and debt position of ILGs. Such entities use a “financial” accounting system based on commitment and ascertainment, to which the cash flow analysis model provided by IPSAS cannot be applied. The proposed classification model and the relevant grid of indicators were applied to the local ILGs, differing in size but located in the same area, in order to test whether these tools could provide a thorough assessment of the financial situation of any LG. Finally, the study proposes an equation to define the maximum degree of indebtedness for an LG, in compliance with the limits set by the current regulations in Italy.

La gestione dei flussi turistici tramite sistemi di trasporto innovativi: l’esempio di Perugia

Starting from 70’s, the City of Perugia has combined a high level of tourism attractiveness, due to thousands of years old environmental and cultural heritage, with a very innovative and sustainable approach to tackling urban mobility issues. The idea to create car parks all around the historic centre connected to the acropolis by mechanized routes (escalators and elevators), as the quickest way to get to final destinations in the most attractive areas of the City, has been recently enlarged and still further developed thanks to the realization of the metroline “Minimetro”, an innovative with a very low environmental impact mean of transport, that links in only 12 minutes the suburban area of Pian di Massiano, equipped with around 2.800 parking spaces, to the city centre, serving several urban districts with a less than one minute trip frequency. Minimetro transport system, nowadays a strong urban public transport corridor, suggested to plan and carry out new strategies to manage touristic flows, becoming the main mode of transport to access the city centre, both for small informal groups of tourists and for big organized ones, carried by coach. The tourist flows management arisen from this transport system is a breakthrough in the implementation of a city management strategy able to combine tourism attractiveness, economic growth, cultural heritage preservation and improvements in the quality of life for citizens. The use of Minimetro transport system for managing tourist flows offers many social and environmental advantages as a cut of 50% of pollutant emissions and waste of energy; moreover, the Minimetro system is becoming itself a “local monument”, boosting the tourism in the city of Perugia and promoting the enhancement and the increase in value of the areas served by the system; more and more, the Minimetro stations are going to turn into “stopping places” of urban cycle and pedestrian paths, increasing the potential of soft mobility in the city. Future scenarios in urban mobility management, with special reference to tourist coaches that arrive to Perugia, will be characterized by a technology enablement allowing a better monitoring control of focused city areas. The high-tech tools will make it possible to exclude unauthorized road users and to manage exceptions, enabling for the access vehicles that meet all the requirements. On this point, the Municipality of Perugia, as coordinator of a partnership composed of Italian Local authorities, has been awarded a grant from Elisa III (a programme financed by Presidency of Council of Ministers – Regional Affairs Department), for a submitted project entitled Concerto. The Concerto project approaches the tourist flows management from a very innovative point of view, introducing concepts as accreditation, info-mobility and control of the accesses linked to geo-referenced services provision.

The Use of Financial Indicators to Determine Financial Health of Italian Municipalities

Context: Governments are being pressured by citizens and other stakeholders to improve their efficiency and effectiveness while, at the same time, they are seeing reductions in available resources. This is the result of several waves of New Public Management-style reforms which have developed into the New Public Governance view (Osborne, 2009). At the same time, recent global financial stress challenges the financial sustainability of governments, both at national and local levels.Problem: Financial health is a necessary condition under which governments must operate. Nevertheless, while the literature concentrates on different models of governance within the public sector, there is a lack of research on financial health measurement system.Purpose: In light of this problem, we juxtapose the analysis of financial health measurement systems with Considine’s four governance models applied to the Italian local governments context.Theoretical frameworks: The paper grounds its theoretical frameworks from the literature concerning various governance model types, [Procedural, Corporate, Market, and Network Governance] (Considine, 1999, 2001, 2003) and financial health (Boyett and Giroux, 1978; Downing, 1991; Alijarde and Lopez, 2001).Methodology: Through a multiple case study approach of three Italian local governments we combine documental analysis of compulsory financial statement indicators and interviews with internal key users aimed to understand the effective use of financial indicators to determine financial health in practice. Findings: A local government needs to have a specific set of financial performance indicators attuned to the prevalent governance model used for its services delivery. Originality, value and practical implications: On a theoretical perspective, this study highlights to what extent each governance model requires specific financial health measures, in order to stress that measuring financial health is a contingent issue, which cannot be assessed regardless the prevailing governance setting implemented. Under a practical point of view, this study identifies the features of different types of financial health measurement systems in various governance models.

Using performance measures in public organisations: challenges of Italian public administrations

PurposeThe purpose of this paper is to investigate the main challenges related to the use of performance measures in public organisations in order to identify the factors affecting the adoption and implementation of performance measurement systems. The empirical analysis is focused on the Italian Institutions.Design/methodology/approachThis paper is based on a two‐stage research process. First a systematic literature review has been carried out with the aim of identifying the factors enabling and hampering the adoption of performance measures in public organisations. Second on the basis of the results of the desk analysis a survey‐based investigation has been implemented involving Italian public institutions.FindingsThe paper provides a twofold contribution. It analyses the factors affecting the adoption and implementation of performance measures in public organisations. On the other hand it presents the descriptive statistical results of the survey highlighting the position of Italian institutions with regard to the use of performance measures. This allows an assessment of the cultural, political and rational factors influencing the deployment of measures in Italian institutions.Research limitations/implicationsThe conceptual analysis has a general validity, whilst the empirical investigation is focused on the Italian context. The framework proposed in this paper allows the identification of the factors affecting the exploitation of performance measures in public organisations. It can be applied in any public organisational context. The empirical evidence is context‐specific and related, in particular, to the Italian local governments. Some main managerial implications are addressed that can support managers to apply performance measurement systems in public organisations.Originality/valueThe paper sheds light on a fundamental issue related to the implementation of performance measurement systems in public organisations. It addresses what are the factors that matter in order to make sure that performance measures are effectively employed to run everyday working activities. Indeed in many public organisations PMSs are something nice to have, but with little practical application.

Political competition and politician quality: evidence from Italian municipalities

We use data from Italian local level governments for the years 1985–2008 to investigate whether political competition affects the quality of politicians, as measured by some ex-ante characteristics such as educational level and type of job held. We handle endogeneity problems through an instrumental variable approach using as an instrument for political competition a variable taking into account whether the previous Municipal Council survived until the end of its legislative term. Two Stage Least Square estimates support the view that political competition positively affects politician quality. Results are robust to different measures of political competition and to different estimation strategies.

Public Strategic Plans In Italian local Governments

Internationally, the concept of sustainability development (SD) has been of increasing relevance since the Brundtland report was published. The European Commission (EC) has published a variety of documents that encourage member states to adopt SD strategies. This article analyses fourteen voluntary contemporary strategic plans (SPs) of Italian local governments (LGs) published on-line, in order to verify if there is a sustainability development focus. Strategic planning is still in its initial stage. Nevertheless, the study concluded that the group of SPs analysed appears to be aligned with EC recommendations.

Accounting innovations: A contingent view on italian local governments

Accounting innovations, and especially the introduction of accruals accounting, are often portrayed as fundamental aspects of publicsector reforms. An increasing body of literature has been studying the experiences of different countries and levels of government, often referring to Lueder's (1992) "contingency model" and its subsequent developments. This model highlights a number of social, political, and administrative variables that are likely to affect government accounting innovations. It applies at a country-wide level and is mainly intended to describe and compare the environments within which accounting reforms take place, as well as the technical features of such reforms. Our paper, on the contrary, tries to expand the contingency model by applying it to individual organisations and by testing its explanatory power.