FINANCIAL RESILIENCE OF MUNICIPALITIES IN PERIODS OF ECONOMIC INSTABILITY AND FINANCIAL DECLINE

Abstract

This article, based on the literature on financial resilience and using panel data for the municipalities of Minas Gerais, from 2000 to 2021, analyzes the extent to which vulnerability factors and anticipatory capacity influenced coping capacity. It uses proxies of financial resilience variables, the socioeconomic environment and dummies related to the 2007-2008 crisis, the 2014 crisis and the COVID-19 crisis. The results partially confirmed the hypotheses that vulnerability factors and anticipatory capacity influence municipalities' coping capacity. These findings are important for the literature and for public management practitioners, since municipal finances, in the light of financial resilience, can provide local governments with a better understanding of their vulnerabilities. They can also contribute to the development of anticipatory and coping capacities, providing support for decision-making, structuring and planning the governance mechanisms needed to deal with future crises.