Decision-Making in Local Governments During Municipal Bankruptcy

Abstract

The purpose of this paper is to provide a comprehensive analysis of decision-making in local governments during municipal bankruptcy. This study analyzes 12 municipalities that went through Chapter 9 from 2008 to 2025 to evaluate decision-making in local governments during municipal bankruptcy. This paper uses the multi-case study approach to test the Taxonomy of financial and budgeting practices during fiscal emergency and bankruptcy in Chester, PA; Fairfield, AL; Perla, AR; Detroit, MI; San Bernardino, CA; Stockton, CA; Jefferson County, AL; Central Falls, RI; Prichard, AL; Westfall Township, PA; Vallejo, CA; and Gould, AR. This study provides recommendations to fiscally struggling municipalities on how to exit a fiscal stress situation quickly and efficiently. The paper is intended as a resource for researchers, practitioners, and policymakers, focusing on financial health and fiscal stress in local governments.

Keywords

municipal bankruptcy fiscal emergency framework

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