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Introduction: The Relevance and Conceptualisation of Local Finance Regulatory Regimes Read chapter Read first chapter

2021 | OriginalPaper | Chapter

Financial Supervision of Local Governments: An Organisational Hurdle

Authors : Falk Ebinger, René Geissler

Published in: Local Public Finance

Publisher: Springer International Publishing

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Abstract

There is a general consensus on the effects of bureaucratic structures on task implementation and performance. Nonetheless, there has been very little research in the field of local public finance regulation. This article analyses the question of organisational structure in the field of local public finance regulation by surveying 18 European countries. We present five organisational dimensions, which potentially relate to regulatory outputs, and analyse their relation to four fiscal indicators. Those organisational dimensions are (1) the department owning the task of fiscal oversight, (2) centralised or decentralised implementation, (3) implementation in the form of one concentrated or several deconcentrated (regionalised) administrative units, (4) involvement of audit court(s) and (5) task execution by higher local government tiers. This analysis carefully demonstrates whether fiscal performance is somewhat more difficult for some organisational structures than for others. The number of countries per dimension shows that in the field of local public finance regulation, some options are more likely than other ones. Moreover, our results indicate that those organisational categories, such as “task ownership” and the involvement of “audit courts” link to higher financial performance. These results can help practitioners at the respective government levels to reconsider given bureaucratic structures.

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previous chapter Fiscal Rules at the Local Level: The Challenge of Enforcement
next chapter European Patterns of Local Government Fiscal Regulation
Footnotes
1
We use the term “policy-making” in accordance with Egeberg’s “substantive policymaking”, i.e. “the kind of policymaking most bureaucrats are supposed to engage in most of the time” (1999, p. 156). This “kind of policymaking” refers to Lipsky’s observation that street-level bureaucrats have “substantial discretion in the execution of their work” (1980, p. 3); see Ringeling’s concept of “policy discretion” (Bresser and Ringeling 1995, p. 129).
 
2
In contrast to further chapters of this volume, which cover 21 countries, we excluded Switzerland, Sweden and England. The Swiss case is difficult to analyse due to its extreme federalism among 26 cantons, overstretching an institutional comparison. Sweden lacks any formal supervision and, therefore, cannot be part of an organisational analysis. EUROSTAT does not provide fiscal data for England.
 
3
The data source for the displayed indicators is the Eurostat Annual Summary Government Finance Statistics. The authors give special thanks to Christian Raffer for providing those data and to Moritz Schmid for supporting the graphic representation.
 
4
We cannot make such strong assumptions for the decentralised units in our sample, as this subsample is heavily diverse. It also includes systems in federal states, which might characterize as highly centralised.
 
5
While analytically clear-cut, the concepts of decentralisation and deconcentration might be functionally overlapping. For example, in the Dutch case, supervision is administered decentrally by the 17 provinces but executed on that level by 1 concentrated office per province. Nevertheless, the “who” and “how” dimensions should not be intermingled analytically.
 
6
An in-depth analysis of the German case supports the thesis of politicisation as shortcomings in steering by the respective ministry (Ebinger et al. 2017).
 
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Metadata
Title
Financial Supervision of Local Governments: An Organisational Hurdle
Authors
Falk Ebinger
René Geissler
Copyright Year
2021
Book
Local Public Finance

Print ISBN: 978-3-030-67465-6

Electronic ISBN: 978-3-030-67466-3

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-3-030-67466-3_4