Rethinking the relationship between local government and financial markets

Abstract

In the past 20 years local governments have increasingly looked to financial markets for capital financing. The markets want local governments to change their accounting systems and become more transparent, in order to offer information that is more appropriate to private sector investors. The authors argue that this approach is only a partial solution, and that local government and financial institutions would both benefit from changes in their relationships. The article identifies a double knowledge gap that needs to be filled if the public and private sectors want to work together as long-term financial partners.

Keywords:

• Local government capital financing
• municipal bonds
• public sector accounting

Additional information

Notes on contributors

Eugenio Caperchione

Eugenio Caperchione is Professor of Public Management, Department of Economics, Modena and Reggio Emilia University, Modena, Italy.

Federica Salvatori

Federica Salvatori is a postdoctoral researcher in the Department of Economics, Modena and Reggio Emilia University, Modena, Italy.