How Fiscally Distressed Local Government Authorities Can Create Public Value

Abstract

Fiscally distressed local governments face a critical challenge – how to create and deliver public value and sustain it. Drawing from the works of Porter (1995) and Moore (1995), this study highlights the concept of organizational strategy and the need to look into the “hidden” strategic advantages of fiscally distressed local authorities as a coherent approach for creating and delivering public value. To this end, case studies of local authorities in Israel that had been scrutinized by an investigation committee appointed by the Ministry of Interior were analyzed. This investigation committee eventually suggested replacing the heads of the local authorities with temporary nominated management committees until new elections were conducted. Findings on value creation are provided in the conclusions.

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