Studies have shown that political variables can influence the volume of government debt and have recommended investigating the joint effects of diverse factors on the risk of local government default. Considering the relation between economic management and political constraints, this paper examines the joint influence of political and systemic factors on the risk of loan default by Spanish local governments. To do so, we analyze 148 city councils for the period 2006-2011, using a logit model with panel data and an artificial neural network. The empirical results indicate that the financial risk of local governments is affected both by political factors specific to each case and, simultaneously, by systemic variables for the country. Specifically, political variables such as the mayor not having economics-related university studies, the under-representation of female councilors in the municipal corporation, municipal government by a party with a progressive ideology, and ideological alignment between the municipal and the regional government are all associated with greater financial risk. Moreover, rising national unemployment, an increased sovereign risk premium, the impact of the electoral cycle, and that of declining economic growth are all factors that may increase the risk of default. The findings presented are of great potential interest for governments, managers, national and international fiscal authorities, financial regulators, and citizens at large, because an understanding of the significance of these variables can help authorities make appropriate decisions to prevent and/or overcome problems related to municipal insolvency.

中文翻译：

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分析地方政府财务风险的政治和系统决定因素

研究表明，政治变量会影响政府债务的数量，并建议调查各种因素对地方政府违约风险的共同影响。考虑到经济管理与政治约束之间的关系，本文考察了政治和系统因素对西班牙地方政府贷款违约风险的共同影响。为此，我们使用具有面板数据和人工神经网络的logit模型分析了2006-2011年期间的148个市议会。实证结果表明，地方政府的财务风险既受每种情况特定的政治因素的影响，又受国家系统变量的影响。具体来说，政治变量，例如市长没有与经济学相关的大学学习，在市政公司，市政政府中，具有进步意识形态的政党中女议员的代表人数不足，以及市政当局与地方政府之间的意识形态一致性，都与更大的财务风险相关。此外，国家失业率上升，主权风险溢价增加，选举周期的影响以及经济增长下降的影响都是可能增加违约风险的因素。提出的发现对于政府，管理人员，国家和国际财政当局，金融监管机构以及整个公民具有巨大的潜在利益，因为对这些变量的重要性的理解可以帮助当局做出适当的决定，以预防和/或克服与之相关的问题。市政破产。