Local governments (LGs) worldwide faced profound financial challenges due to the COVID-19 pandemic, which exposed vulnerabilities in their fiscal structures and governance. As primary providers of essential services, LGs experienced significant fiscal strain due to increased social demands and reduced revenues during economic shutdowns. This article, drawing from research in Financial Accountability and Management, investigates the pandemic’s impact on LG financial stability and highlights key factors influencing their resilience.
The analysis employs a comprehensive framework that distinguishes between systemic elements, like administrative systems and financial autonomy, and contingent factors such as crisis-driven fiscal rule changes. Comparative insights reveal how countries’ approaches to supporting LGs during the pandemic varied widely, influenced by historical financial vulnerabilities, cultural attitudes towards uncertainty, and the degree of central government intervention.
Findings suggest that enhanced financial autonomy and flexible fiscal policies are vital to LG resilience, with lessons for policymakers aiming to fortify local governance against future crises. Read the full article for an in-depth exploration of LG financial vulnerability and insights into strengthening fiscal resilience.