While a significant body of literature exists on local government efficiency, much less is known about its effectiveness, especially financial performance and resident satisfaction. To address this gap in the empirical literature, the present paper uses system‐wide official annual data on resident satisfaction in the Victorian state local government system in Australia to investigate the relationship between annual net operating results and overall citizen satisfaction. In addition, in order to garner a deeper understanding of this relationship, we evaluated the assumption in the ‘near‐to‐zero balance’ public accounting literature that local residents prefer an insignificant annual balance in operating performance compared to substantial annual losses or surpluses. We found that there is a significant negative association between overall satisfaction and its components and financial performance for Victorian local government as a whole. However, this association is largely restricted to rural councils with surpluses. By contrast, we find no relationship between satisfaction and near‐to‐zero balances. We conclude by considering the implications of our findings for both the public accounting literature and local government policymaking.

中文翻译：

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一切都在心：维多利亚州地方政府体系中的市民满意度和财务绩效

尽管存在大量有关地方政府效率的文献，但对其有效性尤其是财务绩效和居民满意度的了解却少得多。为了弥补经验文献中的这一差距，本文使用了澳大利亚维多利亚州地方政府系统中有关居民满意度的全系统性官方年度数据，以调查年度净运营结果与整体公民满意度之间的关系。此外，为了加深对这种关系的了解，我们评估了“接近零余额”的公共会计文献中的假设，即与大量的年度亏损或盈余相比，本地居民更喜欢微不足道的年度经营业绩。我们发现，维多利亚州地方政府的整体满意度及其构成与财务绩效之间存在显着的负相关关系。但是，该协会主要限于有盈余的农村议会。相比之下，我们发现满意度与接近零的余额之间没有关系。最后，我们考虑了我们的发现对公共会计文献和地方政府决策的影响。