Fiscal Monitoring and Municipal Fiscal Health

The fiscal health of municipal governments is essential for delivering core services and maintaining local economic viability. The near bankruptcy of U.S. cities such as New York in 1975 and Detroit in 2013 underscores the importance of intergovernmental fiscal monitoring systems. While many countries have implemented such systems, their effectiveness and potential externalities remain insufficiently understood. This pioneering study examines the fiscal impacts of fiscal monitoring systems through a comparative analysis of 10 cities in each of these four countries: Australia, Mexico, South Korea, and the United States. These countries provide a valuable basis for comparison due to their significant variations in fiscal monitoring systems, governance systems, and economic environments. By analyzing different monitoring approaches, assessing fiscal structures, comparing municipal responses to fiscal distress, and exploring the interactions between monitoring systems, institutional settings, and environmental factors, this study contributes to academic literature and offers critical insights for sustaining municipal fiscal health.