Phenomenology of financial vulnerability in French municipalities of 2,000 to 10,000 inhabitants

Akim A. Tairou
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Akim A. Tairou: ESA-CERAG, Universite de Grenoble II

Public Economics from University Library of Munich, Germany

Abstract: Municipalities financial distress (which we refer as financial vulnerability) is a recurrent concern of French political life. However, there is no universal and unique definition of financial distress. This paper presents a synthesis of some possible definitions and display the real importance of this phenomenon in French municipalities of 2,000 to 10,000 inhabitants. The results show that a combination of Direction de la Comptabilité Publique criteria, debt to overall cash flow ratio, and net cash flow, provides an interesting solution to identify vulnerable municipalities. They also show that vulnerability is a frequent, repetitive, and durable phenomenon. We finally observe that there are significant differences in socio-economic characteristics between vulnerable municipalities and non-vulnerable ones. Nevertheless, in opposition to common assertions, tax potential seems not to be a discriminant element.

Keywords: Municipalities; France; Financial vulnerability; Financial distress. (search for similar items in EconPapers)
JEL-codes: G33 H62 H72 (search for similar items in EconPapers)
Pages: 40 pages
Date: 1997-05-11
Note: Type of Document - LaTex/PostScript; prepared on PC WIN 95 : WinEdt + emTeX + dvips; to print on HP/PostScript; pages: 40 ; figures: No figures
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