Collaborative leadership and financial sustainability in local government

ABSTRACT

This research examines whether collaborative leadership significantly influences the financial sustainability of local government. Unlike other studies on financial sustainability, ours examined collaborative leadership’s effect on both subjective and objective financial sustainability by controlling for socio-demographic and economic factors (i.e., population size, population density, population aged over 65 years, unemployment rate, and gross domestic regional product) that influence the financial sustainability of local government. Ordinary least squares (OLS) regression analysis of data collected from local revenue officers as well as secondary data from local governments in South Korea revealed that collaborative leadership has a positive effect on the subjective perception of financial sustainability and a negative effect on the objective financial sustainability (net debt) of local government. These findings underscore the necessity of collaborative leadership for financial sustainability as well as the strategies needed for its development in local government.

KEYWORDS:

• Collaborative leadership
• environmental factors
• financial sustainability
• leadership behavior
• local government

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Financial independence of local government is calculated as follows: [(local tax + non-tax revenue)/total budget size of local government] x 100.

2. Average financial independence of local government was 52.23% in FY 2010, 51.88% in FY 2011, 52.31% in FY 2012, 51.09% in FY 2013, 50.3% in FY 2014, 50.55% in FY 2015, and 52.47% in FY 2016.

3. For example, collaborative leadership had a skewness value of -.324 and kurtosis value of -.14, while financial sustainability had a skewness value of -.005 and kurtosis value of -.563.

4. My leader appropriately grasps the information that the organization needs. My leader appropriately analyzes the information or data collected. My leader recognizes the problem clearly and suggests a solution. My leader tries to solve problems from various perspectives. My leader clearly communicates the organization’s vision to members. My leader communicates widely with members to share the organization’s vision. My leader promotes the cooperation of stakeholders to support strategic activities of the organization. My leader systematically establishes action plans to achieve the vision. My leader builds a communication process to discuss members’ views. My leader wants to build a credible process to achieve collaboration. My leader often provides opportunities for members to exercise collaborative leadership. My leader shows the work process transparently to all stakeholders in the department for collaborative leadership. My leader tries to share power with the organization’s members as well as others. My leader suggests that members of the organization play a more active role in decision-making. My leader makes it possible for stakeholders to make fair decisions. My leader actively considers the opinions of the members. My leader spends enough time developing the member’s skill sets. My leader gives members of the organization the opportunity to acquire new skills and experiences. My leader has expectations for members whom she/he has counseled. My leaders actively agree to develop their members. My leader is aware of the effects of her/his feelings on others’ relationships. My leader often talks about her/his strengths and weaknesses. My leader communicates positively with others to ensure that she/he understands them clearly. My leader asks for feedback from everyone involved about the outcomes of her/his actions.

5. The financial status of the municipalities where I work is sound. The financial status of the municipalities where I work will be better next year than this year.

6. http://www.law.go.kr/LSW/eng/engLsSc.do?menuId=1&query=local+tax&x=0&y=0#liBgcolor24.

Additional information

Funding

The paper was supported by the research grant of the University of Suwon in 2018 [grant number: 2018-0047].

Notes on contributors

Jungin Kim

Jungin Kim is an assistant professor in the Department of Public Administration at the University of Suwon, Republic of Korea. Her research interests include human resource management and human resource development policies, organizational behavior, and organizational management. She has had articles published in several journals, including Public Administration Review.