Political-electoral aspects and the financial resilience of Brazilian local governments: perspectives during the pandemic crisis

Objective: We examined whether the financial resilience of Brazilian local governments (LGs) was affected by political-electoral aspects during the Covid-19 pandemic.Method: We used a mean comparison with secondary data on the finances and political field information of 621 LGs in Brazil between the years 2017 and 2020.Originality/Relevance: This is the first study to examine the influence of political-electoral aspects on financial resilience capacity in LGs. Results: Our findings indicate that the partisan alignment and the ideological position between mayors and the Brazilian president, also the electoral mandate, are the main reasons that support or reduce the capacity of these LGs to cope with shocks and crises. Theoretical/Methodological contributions: Our paper make a double contribution to the financial resilience literature: exploring a different aspect that shapes this capacity, and examining how LGs in an underdeveloped country coped with the crisis generated by the pandemic.Social/Management contributions: With the particular interest of society at large, our results may be useful to help identify the position, preparedness, and role of LGs managers in times of crisis.

GOVERNMENT FINANCIAL RESILIENCE AND COPING WITH COVID-19

Governmental financial resilience is characterized by the way in which government entities face and recover from financial crises or shocks, being manifested from interactive dimensions. In view of the shock generated by COVID-19, the present research seeks to assess whether vulnerability and the ability to anticipate (resilience proxies) are correlated with the ability to cope with the virus (measured by the number of tests per inhabitant). To determine possible correlations, Spearman's correlation test was used, since the sample did not respect normality in its distribution, to measure the relationship between variables. The evidence points to a negative correlation between the dependence on intergovernmental transfer (vulnerability) and the ability to generate savings (anticipation capacity) and the capacity to cope with COVID-19. Despite methodological limitations, the research provides a potential contribution to advancing the observation of the interaction between the financial and social aspects of resilience, especially in view of the role that accounting plays in shaping different forms and paths for government financial resilience, providing answers short- or long-term shocks, anticipating them through planning and control mechanisms, which can contribute to the development of governance practices based on this literature.