Financial imbalance in portuguese local government: a descriptive analysis

Abstract

This study aimed to make a descriptive analysis of local authorities’ financial imbalance, so as to identify its possible determinants. Data were analysed for all Portuguese local authorities (308) for the period 2014 to 2016. The results led to concluding that the number of municipalities with a financial imbalance diminished during the period of analysis. Large municipalities are less likely to be in situations of financial imbalance. There also seems to be evidence that municipalities governed by a minority, as well as those without financial independence, are more likely to find themselves in this situation. Concerning political ideology (parties on the right or left), no evidence was found of this influencing financial imbalance. This evidence could contribute to those in charge of local authorities defining policies and measures to reduce financial imbalance.