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La descentralización de servicios en el sector local: Factores explicativos e implicaciones contables
... Large municipalities' behaviour differs from that of smaller municipalities, since the demand for public services is higher. Large municipalities are expected to use decentralization processes to a greater extent since they need a higher degree of specialization to satisfy citizens' needs (Montesinos et al., 2010). ...
... The use of decentralized agencies in this case is because of the need to meet higher demands. Larger municipalities are expected to use decentralization processes to a greater extent, since they need a higher degree of specialization to satisfy the needs of all their users (Montesinos et al., 2010). Furthermore, we use the Mann–Whitney U, Wilcoxon W, and normal distribution Z non-parametric tests to show the differences between the groups of analysis, specifically between local governments that use functional decentralized agencies to provide public services and those that do not. ...
... In addition, as their populations are larger than those in other municipalities, they have to satisfy more needs through public services. Thus, according to Montesinos et al. (2010), they tend to create decentralized entities that offer more specialized services and are more flexible and closer to citizens, with the aim of improving the public service delivery and meeting all the citizens' needs. Small municipalities tend to use different modes of public service delivery. ...
As a result of the dramatic growth in functional decentralization processes in Portuguese municipalities, this study examines public services delivery in the 308 Portuguese local governments existing in 2011. By using Biplot analyses, the aim of this study is to analyse the Portuguese functional decentralization processes by population ranges and service type. The results show that functional decentralization is more often used in the largest cities, mainly because of the need to meet citizens' demands and moreover, the opportunistic use by politicians since they could transfer part of the expenditure and debt to these newly created agencies. In addition, the results show that water, urban planning, cultural and economic services are the most decentralized. By contrast, decentralized agencies are not used for the provision of health services in any municipality, and protection, social and environment services are decentralized in very few municipalities.
... Therefore, accounting regulations are of crucial importance in requiring consolidated accounting statements, because annual individual accounts do not provide a faithful image of the overall economic-financial situation of a municipality, since part of its debts are transferred to the dependent agencies, which present their own financial statements. Countries such as the United Kingdom, New Zealand, Sweden and Australia already take into account the importance of consolidation and have made consolidated statements compulsory for all companies in the public sphere (Montesinos et al., 2010). This increasing use of the consolidation of annual accounts provides feedback for decision-making, helping control political actions and improve accountability, and satisfies demands for information and transparency (Grossi and Mussari, 2008;Grossi and Newberry, 2009;Grossi and Pepe, 2009;. ...
... Numerical variable reflecting the number of inhabitants in each municipality. Larger municipalities are expected to use decentralization to a greater extent, since they need a higher degree of specialization to satisfy the needs of all their users (Montesinos et al., 2010) 708 ...
Functional decentralization is aimed at increasing the efficiency, effectiveness and quality of public services, among other advantages, by simplifying the organizational structure and by achieving greater proximity to the end user. Nonetheless, the creation of these entities has been criticized because of the potential to make political use of them to avoid the debt limits imposed on sub-national administrations, as debt would then be transferred to the accounting statements of these agencies. The empirical evidence found in the current study shows that the use of these companies as a mechanism for obtaining external financing is determined by the accounting regulations applicable in relation to the consolidation of accounts. Decentralization processes oriented toward increasing debt are more common among left-wing local governments and are strongly linked to fiscal pressure.
Points for practitioners
Our results show that foundations are now displacing public companies in decentralization processes in order to obtain external funds, since these agencies are not included in the consolidated accounts. Thus, more rigorous regulation should be established in Spain. This opportunistic use of decentralized agencies is developed on the whole by left-leaning political ideologies as a means of incurring more debt that they need. Thus, it is necessary that external auditing offices ( Cámaras de Cuentas) reinforce the monitoring process over local governments in order to circumvent their managerial discretion.
... Thus, the results are controlled by a numerical variable which refers to the number of inhabitants in each municipality (POPULATION). In general, it is expected that larger municipalities tend to use decentralization to a greater extent as they need a higher degree of specialization to satisfy the needs of all their users (Montesinos, Brusca, & Mora, 2010). Similarly, the authors consider GDP per capita (namely GDP), with the aim of reflecting the standard of living of the population in the municipalities. ...
The most important reason to decentralise the public services delivery is to make the citizens' needs better known by the local governments, so it follows to act more efficiently to their satisfaction. Nonetheless it has been found an opportunistic use of these agencies to avoid legal limits on indebtedness imposed on sub-national administrations, generating fiscal illusion. Accordingly, the aim of this study is to analyse the effect of the functional decentralisation processes on public revenues and financing. The results show that the use of decentralisation process, especially companies are created by left-wing political parties in order to raise more income from commercialization of public services. It was also found that these practices are strongly linked to the municipality's fiscal pressure.
... One of the precepts of NPM is the necessity for public organisations, when they grow beyond a given size, to create public agencies or other, decentralised, bodies capable of taking on the task of providing services, such as public firms 1 (Mora-Agudo & Montesinos-Julve, 2007;Brusca, Mora, & Montesinos, 2012;Diefenbach, 2009;Hood, 1995). Decentralisation is also undertaken in policy provision, resulting from externalities and the scale effects associated with policies and local preferences. ...
This research attempts to examine how multinational enterprises (MNEs) from regulated and non-regulated industries shape their environmental strategies with regard to environmental disclosure and performance. Results reveal that regulated (non-regulated) MNEs display worse (better) environmental performance levels and disclose less (more) environmental information than MNEs operating in non-regulated (regulated) environments. We argue that this strategy is set as an answer to cope with legitimacy problems faced by MNEs as well as to respond to increased demands from stakeholder groups. We contend that our findings may contribute to existing literature and be of relevance for practitioners. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
... Thus, the results are controlled by a numerical variable which refers to the number of inhabitants in each municipality (POPULATION). In general, it is expected that larger municipalities tend to use decentralization to a greater extent as they need a higher degree of specialization to satisfy the needs of all their users (Montesinos, Brusca, & Mora, 2010). Similarly, the authors consider GDP per capita (namely GDP), with the aim of reflecting the standard of living of the population in the municipalities. ...
The most important reason to decentralise the public services delivery is to make the citizens' needs better known by the local governments, so it follows to act more efficiently to their satisfaction. Nonetheless it has been found an opportunistic use of these agencies to avoid legal limits on indebtedness imposed on sub-national administrations, generating fiscal illusion. Accordingly, the aim of this study is to analyse the effect of the functional decentralisation processes on public revenues and financing. The results show that the use of decentralisation process, especially companies are created by left-wing political parties in order to raise more income from commercialization of public services. It was also found that these practices are strongly linked to the municipality's fiscal pressure.
... In this new economic context, local governments have not been left un-scathed, and for most of them the financial difficulties affecting them practically since the Spanish constitution was approved in 1978 have been exacerbated. The crisis has led to a sharp decline in municipal revenues while, simultaneously, their costs have either stagnated or even increased, which impels local governments to find new tools for dealing with the new financial scenario (Brusca Alijalde et al., 2012). Therefore, it seems reasonable to design policies which take into account the major sources of debt for Spanish municipalities. ...
This paper analyzes the factors that directly influence levels of debt in Spanish local governments. Specifically, the main objective is to find out the extent to which indebtedness is originated by controllable factors that public managers can influence, or whether it hinges on other variables beyond managers’ control. The importance of this issue has intensified since the start of the crisis in 2008, due to the abrupt decline of revenues and, simultaneously, to the fact that the levels of costs these institutions face has remained the same or in some cases, increased. Results can be explored from multiple perspectives, given that the set of explanatory factors is also multiple. However, the most interesting finding is the varying effect of each covariate depending on a municipality's specific debt level, which suggests that economic policy recommendations should not be homogeneous across local governments.
... One of the precepts of NPM is the necessity for public organisations, when they grow beyond a given size, to create public agencies or other, decentralised, bodies capable of taking on the task of providing services, such as public firms 1 (Mora-Agudo & Montesinos-Julve, 2007;Brusca, Mora, & Montesinos, 2012;Diefenbach, 2009;Hood, 1995). Decentralisation is also undertaken in policy provision, resulting from externalities and the scale effects associated with policies and local preferences. ...
Finding solutions to the unfavourable economic and financial situation that the local
authorities are currently facing is of crucial importance. One such solution is to adopt
mechanisms for restructuring local public services, through new management
approaches to reduce costs and thereby reduce fiscal stress. The aim of this article is
to determine the probability of a city council changing the way it manages services,
selecting from different options, in response to situations of fiscal stress. To address
this issue, we studied a sample of 1572 Spanish municipalities for the period 2002–
2009, using a random-effects panel multinomial logit model. The results obtained show
that outsourcing and inter-municipal cooperation are the management formulas that
councils are most likely to choose in response to a financial crisis, especially the ones
arising from insufficient transfers, negative cash flow, debt or budget deficit.
... Empirical evidence shows that local administrations utilised private contracting (Pina and Torres 1998;García 1999) and administrative decentralisation (Prado-Lorenzo, Martín-Jiménez, and García-Sánchez 2009;Benito and Bastida 2003a;2003b;Montesinos, Brusca, and Mora 2010) in order to supply the services demanded by users. Since previous studies have mainly dealt with the subject of contracting out, in this article we address the question of decentralisation. ...
The process of local decentralisation of public services delivery has attracted research attention because of the wide range of factors that induce governments to make this decision. Nonetheless, most such studies have focused on economic and financial aspects, ignoring the impact of political factors. The scarce previous research about political factors is the motivation for this study. We used panel data models based on 153 Spanish municipalities with populations over 50,000 for the period 1999–2007. The process of decentralisation is disaggregated according to the legal form of the entities: corporations and foundations. Our results show that more corporatisation processes are carried out in environments where political competition is lower and the party in power enjoyed greater support in the last elections. Additionally, decentralisation processes usually take place in the years immediately following elections, especially through foundations. Furthermore, both forms of decentralisation are more likely to be initiated by right-wing politicians.
... En el caso de la descentralización, los resultados obtenidos coinciden con el estudio de Escudero (2002), que confirmaba que los ayuntamientos más descentralizados presentaban un mayor endeudamiento, en contraposición a aquellos en que se pone de manifiesto una mejora de la eficiencia y de la situación financiera de la entidad (Balaguer et al., 2010a(Balaguer et al., , 2010b. Igualmente, nuestros resultados están en consonancia con los trabajos de Mora y Montesinos (2007), Montesinos et al. (2010) y Brusca et al. (2012. En relación con la cooperación intermunicipal, estudios previos han analizado el uso de esta variable con la intención de explotar economías de escala (Warner y Hefetz, 2003;Dijkgraaf et al., 2003;Warner, 2006aWarner, , 2006bZullo, 2009), lo que supondría unos menores gastos y, por tanto, una deuda menor. ...
As a result of the current economic crisis, with the consequent borrowing constraints imposed on municipalities and curbs on public deficit, the resources of local governments have been severely reduced. In this context, the creation of devolved organizations provides municipalities with a means of eliminating certain forms of debt from their budget items. The aim of this study is to determine whether inter-municipal cooperation, public-private collaboration and decentralization, together with the political and financial characteristics of the local authority in question, are factors constraining it to present a particular level of debt in times of economic crisis. To achieve these goals, various databases were used to study a sample of 1,238 local authorities for the period 2008-2011, to determine which of these factors influence municipal debt in Spain. Application of a pooled regression model showed that financial variables are factors that influence the level of municipal debt, as does the political orientation of the governing local party. We also found that local councils presenting higher levels of inter-municipal cooperation and those with a higher degree of decentralization have higher levels of debt.
... In the case of Spain, reforms under the NPM theory arrived late (Hood, 1996) and this particularly affects local governments, which provide most public services. As the empirical evidence shows, local administrations are resorting to private contracting (Pina and Torres, 1998;García, 1999;Ramió-Matas and García-Codina, 2006) and decentralisation of the administration (Cuadrado, 2008;PradoLorenzo et al., 2009;Benito and Bastida, 2003a, 2003b, 2005Montesinos et al., 2010) in order to supply the services that users demand. A large number of studies have analysed efficiency at the local level, including Worthington (2000) for Australia;Brueckner (1979)for New Jersey;Grossman et al. (1999)for the USA;Vanden et al. (1993), DeBorger et al. (1994)and DeBorger and Kersten (1996)for Belgium;Taïrou (2000)for France;Worthington et al. (2001)for Wales;for the Netherlands;for Denmark;Reeves and Barrow (2000)for Ireland; andOhlsson (2003)for Sweden. ...
The choice of service delivery form (direct management, agencification, or indirect management) is one of the most important decisions in the strategic planning of sports systems. However, its influence on efficiency has not been adequately studied in the scientific literature. The aim of this paper is to analyse the service delivery form of sports services on cost efficiency and to study the implications the use of different inputs has for the analysis of cost efficiency in sports services. To answer the objectives of the study, the analysis is divided into three stages. First, the cost efficiency of municipal sports services is estimated through the partial order-m robust frontiers using two different measures of cost (budgetary expenditures and effective cost). Then, the two cost-efficiency estimations were compared by the Li test to analyse the existence of significant differences. Finally, cost efficiency was regressed on several environmental factors by a bootstrapped truncated regression. The results show that there is no significant relationship between the different forms of management when the effective cost is included as an input. However, there is a significant relationship when the budgetary expenditure is specified as input; in this case, direct municipal management is the delivery form with the highest efficiency.
El objetivo del presente trabajo consiste en determinar los factores que condicionan la deuda viva de los ayuntamientos, variable que recientemente ha sido publicada por primera vez en España por el Ministerio de Economía y Hacienda. Para ello, se ha llevado a cabo un estudio empírico para un panel de 1.309 municipios de la geografía española para el período 2003-2008, utilizándose un conjunto de elementos del entorno social y político, magnitudes financieras internas, así como, si la presencia de procesos de externalización o de creación de agencias, entes y agrupaciones de municipios condicionan el nivel de endeudamiento de estas administraciones locales.
Los resultados señalan que las variables explicativas utilizas explican un 67,62% de la variabilidad en el nivel de endeudamiento y que las variables correspondientes a las magnitudes financieras internas son las que explican en mayor medida el nivel de deuda.
Determinants of functional decentralization and their relation to debt : empirical evidence based on the analysis of Spanish municipalities
Functional decentralization is aimed at increasing the efficiency, effectiveness and quality of public services, among other advantages, by simplifying the organizational structure and by achieving greater proximity to the end user. Nonetheless, the creation of these entities has been criticized because of the potential to make political use of them to avoid the debt limits imposed on sub-national administrations, as debt would then be transferred to the accounting statements of these agencies. The empirical evidence found in the current study shows that the use of these companies as a mechanism for obtaining external financing is determined by the accounting regulations applicable in relation to the consolidation of accounts. Decentralization processes oriented toward increasing debt are more common among left-wing local governments and are strongly linked to fiscal pressure.
Points for practitioners:
Our results show that foundations are now displacing public companies in decentralization processes in order to obtain external funds, since these agencies are not included in the consolidated accounts. Thus, more rigorous regulation should be established in Spain. This opportunistic use of decentralized agencies is developed on the whole by left-leaning political ideologies as a means of incurring more debt that they need. Thus, it is necessary that external auditing offices (Camaras de Cuentas) reinforce the monitoring process over local governments in order to circumvent their managerial discretion.
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