Italian Local Governments Research Articles

On a Municipality-Wide Scale. Social Media Use in Italian Municipalities: Information and Interaction

The contribution aims at investigating the role of social media in the Italian local governments in the «maturity models» scenario, between informative and interactive use of digital media. In particular, the paper presents the results of a pilot study on a little sample of Italian municipalities who usually adopt their Facebook profiles to communicate with citizens. Even if many empirical works are devoted to this issue, less attention is paid at the citizens’ needs and expectations in literature. The article has the purpose to provide a better understanding of citizens’ behaviors on institutional Fb’s pages with the wider purpose to explore what «information» and «interaction» mean in the specific relationship citizen- municipal in a digital environment. As findings suggest, the information-based use of social media is necessary to improve citizens’ quality of life and their effective use of public services. Municipalities, exploiting their «proximity», have a pivotal role as «hub of information», through the integration and reconnection of information contents whether self-produced or produced by other stakeholders.

Promoting work engagement in public administrations: the role of middle managers’ leadership

ABSTRACT This study aims at exploring the role of middle managers’ leadership style in promoting work engagement in public administrations. Building on leadership theory, the work engagement literature and change management research, the study develops and empirically tests a model envisaging the impact of leadership on engagement as partially mediated by leaders’ support for key aspects of public sector reforms. An empirical study carried out on 2721 Italian local government workers shows that transformational leadership is positively linked to work engagement both directly and indirectly. Mixed results emerge for the other leadership styles.

Managerial Reporting Tools for Social Sustainability: Insights from a Local Government Experience

The paper is a country-specific study that explores the potential points of connection between the sustainable territorial development goals and managerial tools in the context of local authorities. In particular, the purpose of this research is to propose a set of features and criteria to evaluate the contribution of accounting documents to the pursuit, development and strengthening of social sustainability. As part of traditional accounting systems, social reporting is essential to support policy makers’ decisions in promoting social sustainability and in evaluating the effects of their choices within the institution and externally towards citizens and various stakeholders. To this end, we present a leading case study of a medium-sized Italian local authority’s accounting system in which the contributions and limits of managerial tools to social reporting are analyzed. The case study allows us to have a deeper understanding of social reporting and to get insights about issues that matter to social sustainability assessment in public administration. Since the reporting tools comply with international accounting standards, the case study offers interesting food for thought in the international debate on the assessment of sustainability in public organizations. The results identify the areas of complementarity and critical issues between social reporting and traditional accounting systems. Therefore, they enhance our knowledge about the role of public accounting system in supporting sustainable territorial development policies and programs through managerial tools’ adoption.

Organised Crime, Captured Politicians, and the Allocation of Public Resources

What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on public spending, local revenues, and elected politicians at the municipality level. Difference-in-differences estimates reveal that infiltrated local governments spend more on average for construction and waste management, less for municipal police and public transport, and collect fewer taxes for waste and garbage. In addition, we uncover key elements of local elections associated with mafia-government collusion.

En una escala de todo el municipio. Uso de redes sociales en municipios italianos: información e interacción

The contribution aims at investigating the role of social media in the Italian local governments in the «maturity models» scenario, between informative and interactive use of digital media. In particular, the paper presents the results of a pilot study on a little sample of Italian municipalities who usually adopt their Facebook profiles to communicate with citizens. Even if many empirical works are devoted to this issue, less attention is paid at the citizens’ needs and expectations in literature. The article has the purpose to provide a better understanding of citizens’ behaviors on institutional Fb’s pages with the wider purpose to explore what «information» and «interaction» mean in the specific relationship citizen- municipal in a digital environment. As findings suggest, the information-based use of social media is necessary to improve citizens’ quality of life and their effective use of public services. Municipalities, exploiting their «proximity», have a pivotal role as «hub of information», through the integration and reconnection of information contents whether self-produced or produced by other stakeholders.

Earnings management in local governments: the role of political factors

PurposeThe purpose of this paper is to examine earnings management practices in local governments (LGs). The implementation of accrual accounting in LGs opens the way for empirical research on the topic, as reporting high surpluses or high deficits can be negatively interpreted by the central government, monitoring authorities, citizens and political opponents. According to public choice theory, the conflicting interests between politicians, who pursue re-election, and voters, who observe politicians’ actions to assess their alignment with social welfare, create fertile ground for earnings management practices.Design/methodology/approachThe study calculates discretionary accruals, by using the Jones (1991) model, and relates them to several political variables. It employs a large sample of Greek and Italian LGs. The Greek database covers the period from 2002 to 2015 with about 4,300 observations, and the Italian database includes the period from 2008 to 2015 with about 1,130 observations.FindingsThe findings from the analysis give evidence that LGs engage in earnings management. The principal factor is the electoral cycle, as earnings management seems to be greater when the mayor is re-elected than when the mayor is elected for the first time. Furthermore, the period before elections create conditions that cultivate earnings management attitudes.Research limitations/implicationsPrevious studies have principally investigated earnings management in the private sector. Considering that many public-sector entities have implemented accrual accounting systems, this study intends to examine earnings management behaviour at the LG level, providing interesting findings for researchers and policy makers.Practical implicationsA better understanding of the political factors and the financial conditions, which act as obstacles or facilitators, should work hand in hand with the accounting reforms. The usefulness of financial statements for decision making and control presupposes that they are of high quality, an attribute that can be impaired by earnings management.Originality/valueThis study investigates the influence of political factors on earnings management behaviour in public-sector contexts where self-interest and accountability pressures coexist.

On the Perils of Structured Loans Financing in France and Italy

AbstractThe restructuring process of sovereign debt is not yet managed under common global rules; public debt stabilisation is an explicit policy goal in the EU, but cannot be achieved if local public authorities do not control their liabilities and connected risks. EU local administrations’ debt soared due to the economic downturn, reduced resources transferred from the central state and increasing expenses. After 2000, French and Italian local authorities extensively underwrote complex financial instruments, such as over the counter (OTC) interest rate and exchange rate derivatives and structured loans (i.e. loans with embedded derivatives) to manage their growing liabilities; the proliferation of derivatives among European public administrations has been favoured by the absence of proper disclosure and of monitoring procedures. Losses due to structured loans accumulated and in 2017 French local authorities asked for state rescue; similarly, some Italian regions and municipalities reported relevant losses. The reduction of financial risks can be achieved by improving information and transparency, by reducing moral hazard, and limiting ‘revolving doors’.

ICT from Below: ELISA Program and the Innovation of Local Government in Italy

In the last two decades, there has been a shift in the fundamental paradigm of Public Administration, from New Public Management, characterized by a managerial, microeconomic and sectorial approach, to Multilevel Public Governance, characterized by an integrated, strategic and holistic approach. The current Multilevel Public Governance paradigm is particularly useful to study and to approach to the Italian local government sector, due to its extreme fragmentation that needs cooperation to overcome its limits. It is in this theoretical framework that we present the ELISA program and its efforts in modernizing the local administration with ICT… from below.ELISA program (Enti Locali – Innovazione di SistemA, Local Government – System Innovation) is a national government project for the innovation in the Public Administration, guided by the Department for Regional and Local Affairs. The project promotes innovative instruments to develop software and technological public platform in three different main fields: taxation and cadastre; info-mobility; quality of services. The ultimate goal is to increase the efficiency of the administrative structure and provide better and technologically advanced solutions to respond to the needs of the citizens.Considering the success of the ELISA program, the Department for Regional and Local Affairs, in cooperation with Politecnico di Milano and Invitalia s.p.a., activates the eGovernment Laboratory with the aim in guaranteeing the replicability and the uniform dissemination of the best solutions all along the country. One of its action lines is to develop and implement the Innovation Communities raised in connection with the best practises of the ELISA program. For this purpose, it encourages sustainable and innovative management models, which are able to spread significant benefits by passing on administrative skills and knowledge to other Public Administrations and, furthermore, promoting the implementation mechanism and the deployment of the experiences.For that to happen, system-oriented measures are needed in order to redefine the relationship between the Local Authorities and the Central Administration: the first ones have the task to identifying both problems and needs of their territories and design proper solutions accordingly; the second one has to guarantee constant and consistent funds, coordinate the actions and oversee the whole process. One example of system-oriented measure is ItaliAE project, a complex and technological program, financed by European structural funds and born to follow the implementation of the local authority reform provided for by the law n. 56/2014 and to support the transformation of the Italian administrative geography and to improving its efficiency.

The Rise and Fall of CSR in Italian Local Government

CSR is an essential intangible business asset increasingly understood as a critical success factor in global markets. A new connotation of corporate responsibility, combined with a modern approach to CSR interpreted in a competitive key, can bring together economic and socio-environmental performance needs by providing adequate responses to a wide range of stakeholders. This, however, requires guaranteeing sustainability from an economic point of view as well as credibility in terms of the messages conveyed with the related communication tools. The Italian public sector has attempted to incorporate the managerial approach developed in the private sector, yet after a period of great attention to this issue, a gradual decline has manifested in the instruments supporting social responsibility and the importance they play in the internal programming, reporting, and communications cycle.

Organised Crime, Captured Politicians and the Allocation of Public Resources

What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this ‘infiltration’ of mafia groups within local governments by using newly collected data on public spending, local taxes and elected politicians at the local level. Difference-in-differences estimates reveal that infiltrated local governments spend more on average for construction and waste management, less for municipal police, and collect fewer taxes for waste and garbage. In addition, we uncover key elements of local elections associated with mafia-government collusion.

Budgetary solvency of Italian local governments: an assessment

PurposeThe purpose of this paper is to investigate budgetary solvency (BS) as a part of the financial condition of local governments (LGs), considering that the growing demand for public services is primarily affecting this variable.Design/methodology/approachThe study investigates a sample of 132 Italian LGs with more than 50,000 inhabitants for the period 2005–2014. The authors obtain a set of indicators as proxies of BS, which serve as the dependent variable of a regression model aimed at testing several independent variables which the authors are interested in, namely, financial autonomy, current equilibrium, level of indebtedness and investments.FindingsBS, as well as its three indicators—sustainability, flexibility and vulnerability—are positively related to financial autonomy and current equilibrium and negatively related to the level of indebtedness and investments.Practical implicationsTo cover citizens’ demands for public services guaranteeing sound financial management, policymakers are advised to control both the balance between current revenue and expenses and the level of indebtedness while preserving financial autonomy from external sources.Originality/valueThis study adds fresh insight to the literature on financial health, emphasising the relevance of public financial management.

Exploring Performance Management in Italian Local Government: The Necessity of Outcome Measures and Citizen Participation

The purpose of this article is to identify what internal and external factors increase the probability of local officials actually using performance data for decision making within Italian local government, responding to one of the basic questions of performance management theory. Based on a sample of local governments from the Apulia region, we used an ordinary least squares regression model to show that local officials are more likely to engage in performance data use when they rely on input, output, and outcome measures and when they increase the level of citizen participation. While the reliance on more advanced performance measures clearly builds on previous research, our study represents one of the few studies that demonstrates a statistically significant relationship between performance management and citizen participation in local government. We conclude from our findings that we cannot forget about basic performance measurement and external stakeholder involvement as scholars continue to push the boundaries of performance management theory.

Local Authorities’ Policies for Disseminating Gender Equality. Evidence from Italy

This paper aims to analyze the role of Italian local authorities in disseminating gender equality by using the gender mainstreaming approach. Previous researches in gender were concentrated on legal aspect linked to labor or to violence against women. Moreover, other studies examined the effects of EU funds on local gender policies. However, no research results are provided about methodologies, timing and responsibilities set up by local administrations. The research focuses on a population consisting of local authorities representing the principal regional towns and analyzes the Italian local authorities’ commitment in gender mainstreaming. The result of the analysis is that the local authorities are demonstrating more commitment with policies linked to employment issues. Moreover, Italian municipalities show a signifi cant commitment to spreading GM policies, not only dedicated to women but also to a more inclusive concept of ‘gender’. However, we argue that policies for gender equality are not target-driven: local authorities widespread a wide range of gender policies without defi ning an adequate tool. Policy makers need to refl ect about the possibility to develop a clear frame concerning strategies, resources, measuring and impact indicators in order to issue real ‘gender effective policies’.

Performance management systems' stability: Unfolding the human factor – A case from the Italian public sector

The aim of this study is to examine the institutional context during the emergence of New Public Management (NPM), which created pressure on public sector organizations to implement performance management systems (PMSs), such as the balanced scorecard (BSC). Drawing on Granlund's framework (2001) and Giddens' (1979) structuration theory, we engage insights from a longitudinal case study of an Italian local authority to show how managers exercise agency before the mandated implementation of the BSC. This analysis suggests a re-interpretation of Granlund’s (2001) factors of inertia (human, institutional and economic) in terms of balance among the three factors, and inclusion of a historic and culturally specific perspective. The findings also encourage a broader consideration of the agency of managers in a public entity before the design and enhancement of a NPM tool.

Does IPSAS Meet Heritage Assets’ User Needs?

ABSTRACTPublic organizations need to custody and protect heritage assets. This article questions the appropriateness and quality of the unique International Public Sector Accounting Standards (IPSASs) in delivering financial reports that meet the user needs in regard to heritage assets. By refining the earlier findings in Italian local governments with data from a completely different region being Flanders, the results highlight that the IPSASs are lacking an important area of expectations from a relevant user need perspective, being the local ruling politicians. Finally, current article improves previous publication by examining the different kinds of responses in the light of certain municipal characteristics.List of abbreviationsIFRS: International Financial Reporting Standards IPSASs: International Public Sector Accounting Standards IPSASB: International Public Sector Accounting Standards Boards UNESCO: United Nations Educational, Scientific and Cultural Organization

Local Governments’ Earnings Management: Greek and Italian Evidence

The paper aims to examine earnings management practices in local governments, focusing on two Mediterranean countries, namely Greece and Italy that have comparable administration systems. According to public choice theory, the conflicting interests between politicians who pursue re-election and voters who monitor politicians’ actions to assess their alignment with social welfare create fertile ground for earnings management practices. A large sample of Greek and Italian local governments (LGs) is analysed; the study calculates discretionary accruals, using the Jones (1991) model, and relates them to several political variables. The Greek database covers the period from 2002 to 2015 with about 4,300 observations, and the Italian database includes the period from 2008 to 2015 with about 1,130 observations. The findings from the analysis evidence that LGs engage in earnings management, the principal factor being the electoral cycle, especially in the case of Greek municipalities. Considering that many public-sector entities have implemented accrual accounting systems, this study intends to examine earnings management behavior at the local government level, providing interesting findings for researchers and policymakers. A better understanding of the political factors and the financial conditions, which act as obstacles or facilitators, should work hand in hand with the accounting reforms. The usefulness of financial statements for decision making and control presupposes that they are of high quality, an attribute that can be impaired by earnings management. To the best of our knowledge, this is the first study to investigate earnings management behavior in different public-sector settings.

Do European recommendations impact on sustainability policies by Italian local governments?

Taking the role of a facilitator, the EU has published recommendations to steer sustainability policies in local governments. The authors analysed strategic plans published by Italian local governments and found that the EU’s recommendations had zero effect. The way forward is for local governments to be required to produce sustainability policies.

Auditors and early signals of financial distress in local governments

PurposeThis study aims to analyze whether and how a set of financial ratios calculated on the basis of financial statement information would allow auditors of Italian local governments (LGs) to get an indication of LGs’ financial distress risk and, hence, to support politicians and managers in promptly detecting financial distress.Design/methodology/approachA model comprising a set of financial indicators that would distinguish distressed from not distressed LGs through a logistic regression approach has been estimated and applied to Italian LGs. The model is built on the basis of information pertaining to 44 distressed and 53 not distressed LGs for up to five years prior to bankruptcy and covers the period 2003-2012.FindingsThe model reveals that the percentage of personnel expenses over revenues, the turnover ratio of short-term liabilities over current revenues and the reliance on subsidies (calculated as subsidies per capita) are factors discriminating non-distressed LGs from the distressed ones.Practical implicationsThe model could have political and practical implications. The possible use of this model as a complementary tool in auditing activities might be helpful for auditors in detecting financial distress promptly, thus potentially enabling politicians and managers to search for different ways to manage public resources to avoid the detrimental consequences related to the declaration of distress.Originality/valueThis model, contrary to existing models that use accrual accounting data, is applicable to LGs that adopt a modified cash accounting basis.

Sustainability standard setting as local government matter: an Italian experience

ABSTRACTSustainability is a globally targeted concept widely debated in the literature, but still seeking a commonly agreed operationalization within applicable standards. The role of standard setter is commonly played by multi-stakeholder international organizations aiming at offering sound solutions for all kind of organizations, while what could be the role of a local government (LG) as sustainability standard setter and how this could impact on the definitions, rubrics, and measurement of sustainability is currently under-investigated. The case of an Italian LG already acting as standard setter allows to understand the reasons for, the strengths and the weaknesses of territorially bounded standards.

Between patronage and good governance: Organizational arrangements in (local) public appointment processes

This article investigates whether certain organizational arrangements in (local) public appointment processes could encourage the use of appointments as a tool of good governance rather than as a tool of patronage. Specifically, we studied the role of six organizational arrangements in 10 case studies of intra- and inter-organizational public appointment processes held in Italian local government. We found that good governance (in terms of perception of overall integrity and fairness) was found in processes of public appointments where there was independent scrutiny, and when the process involved local councillors and/or external stakeholders – that is, actors beyond those with the formal power to appoint. In these cases, making appointments was seen as a tool of good governance rather than of patronage. These organizational arrangements were more relevant than other ones such as the transparency of public advertisements, job descriptions and educational/professional requirements, and media and public awareness. The article describes the relevant literature and the research study, and discusses implications for research, policy and management.Points for practitionersIn terms of policy implications, the article discusses the importance of ensuring transparency and some form of checks and balances in the power of making public appointments, as well as of promoting more awareness among citizens and society in general of the issue of public appointments. From a managerial point of view, the article suggests that public managers should consider the implications of the different organizational arrangements that can be used in public appointment processes to exploit the good governance potential of public appointments.