Forms of government and municipal financial performance

The authors examined the impact of municipal government structures on the bond ratings of municipalities in the USA. While their initial analysis suggested that the mayor–council system has a negative impact on municipal bond ratings, the application of Nelson and Svara’s (2010) government typology demonstrated that the political influence of a mayor on the appointment of the chief administrative officer is a driving factor that negatively affects bond ratings, regardless of the government being a mayor–council or a council–manager form.