Local government financial banktuptcy: an empirical analysis in light of recent legislative innovations

In general, a company may cease to exist when no longer has any of the characteristics that determine its existence, but in the case of the local authority, it must necessarily live in the communities served and to ensure goods and services are indispensable and essential. This creates a situation of profound disparities in the treatment of the crisis of local authorities, as well as the need for a specific legal framework like Italian local governments bankruptcy legislation. The purpose of this paper is, first, to give adequate contextualization to local governments financial bankruptcy, especially in relation to recent regulatory action in this area (Legislative Decree no. 149/2011 and Legislative Decree no. 174/2012). For this reason, after having explained the main problems regarding the need to find economical conditions also in local government (as public companies), we wanted to build an empirical analysis that could put the state in relation to financial difficulties with the condition deficitarietà of structural local authorities. The main objective of synthetic empirical investigation is to give adequate consideration to the systems of preventive controls in local authorities that , many times, fail to grasp the real danger of any symptoms of difficulty of management. Finally, in the concluding section attempts to summarize some considerations on the experience gained over twenty years of application of the institution of insolvency.