Financial sustainability of local governments in the eyes of Finnish local politicians

Abstract

Local government aims for financial sustainability in ensuring the wellbeing of citizens at the expense of their tax incomes. As members of local councils, local politicians are the highest decision-makers who are responsible for setting the aims and evaluating the outcome of municipal operations. Hence, local politicians’ notions on financial sustainability play an important role in sustainable decision-making. Although financial sustainability is seen important, previous research is limited in providing studies on the multidimensional nature of financial sustainability. Prior research has focused on the measurement of financial sustainability, often in the contexts of financial difficulties. This paper aims to answer this research gap by studying local politicians’ interpretations on financial sustainability and contributing to a deeper understanding of the phenomenon. This qualitative study employs interview data collected from 24 Finnish local politicians from five municipalities. Based on the content analysis of the interview data, financial sustainability is, in the eyes of local politicians, a political issue with multiple factors in and out of the reach of decision-makers. These notions could be utilized in future research in developing methods for measuring and managing financial sustainability in local governments.

Local government aims for financial sustainability in ensuring the wellbeing of citizens at the expense of their tax incomes. As members of local councils, local politicians are the highest decision-makers who are responsible for setting the aims and evaluating the outcome of municipal operations. Hence, local politicians’ notions on financial sustainability play an important role in sustainable decision-making. Although financial sustainability is seen important, previous research islimited in providing studies on the multidimensional nature of financial sustainability. Prior research has focused on the measurement of financial sustainability, often in the contexts of financial difficulties. This paper aims to answer this research gap by studying local politicians’ interpretations on financialsustainability and contributing to a deeper understanding of the phenomenon. This qualitative study employs interview data collected from 24 Finnish local politicians from five municipalities. Based on the content analysis of the interview data, financial sustainability is, in the eyes of local politicians, a political issue with multiple factors in and out of the reach of decision-makers. These notionscould be utilized in future research in developing methods for measuring and managing financial sustainability in local governments.