Evaluating the Validity and Reliability of the Financial Condition Index for Local Governments

23 Pages Posted: 26 Jun 2015

See all articles by Benjamin Y. Clark

Benjamin Y. Clark

University of Oregon - School of Planning, Public Policy & Management

Multiple version iconThere are 2 versions of this paper

Date Written: Summer 2015

Abstract

Understanding the financial condition of local governments is important for public managers and elected officials as they work to align revenues with p ublic demands for services, while maintaining financial solvency. This task becomes even more important when the economic and financial environment, over which local officials have little to no control, is collapsing around them. This article seeks to expand the literature of measuring financial condition of local governments by testing the validity and reliability of the Financial Condition Index (FCI). The FCI is a framework for evaluating financial condition that was initially developed by Groves, Godsey, and Shulman and later applied in US stateā€level studies by a number of scholars. The results from this article cast serious doubt on the applicability of using the FCI, and the four associated solvency dimensions, as an appropriate methodology for evaluating local government financial condition.

Suggested Citation

Clark, Benjamin Y., Evaluating the Validity and Reliability of the Financial Condition Index for Local Governments (Summer 2015). Public Budgeting & Finance, Vol. 35, Issue 2, pp. 66-88, 2015, Available at SSRN: https://ssrn.com/abstract=2623311 or http://dx.doi.org/10.1111/pbaf.12063

Benjamin Y. Clark (Contact Author)

University of Oregon - School of Planning, Public Policy & Management ( email )

Eugene, OR 97403
United States

HOME PAGE: http://bit.ly/BenClark

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
635
PlumX Metrics