Akim A. Tairou (ESA-CERAG, Universite de Grenoble II)
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.
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Publisher Info
Paper provided by EconWPA in its series Public Economics with number
9705002.
Length: 40 pages Date of creation: 11 May 1997 Date of revision: Handle: RePEc:wpa:wuwppe:9705002
Note: Type of Document - LaTex/PostScript; prepared on PC WIN 95 : WinEdt + emTeX + dvips; to print on HP/PostScript; pages: 40 ; figures: No figures Contact details of provider: Web page: http://129.3.20.41
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Find related papers by JEL classification: H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
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