In Quest of a Scale for Measuring Local Government Financial Sustainability

Abstract

This research explores the scale for measuring local government financial sustainability. Despite the existence of sound regulatory framework on how local government’s financial resources can be generated and managed, finding still revealed that a challenge often arises from the lack of the scale for measuring local government financially sustainability. This affects proactive analysis and mitigation of the risks that often affect local government financial sustainability. This research attempted to address this question by arguing that measuring the overall maturity of the financial sustainability of the local government department can be undertaken according to four perspectives that include liquidity, resilience, service and fiscal responsibility, and public confidence. It was also posited that this must also be accompanied by the application of five spectrums aligned to Birney, Clarkson and Tuxworth’s five spectrums of a government’s financial sustainability that include; at risk, compliance-based, incremental, strategic, and systematic. However, future research can still explore the challenges of measuring financial sustainability.

Key phrases: Financial Sustainability; Local Government; Local Government’s Performance