The Propensity of Being “Openness” of Italian LGAs. A Study of Possible Relationships with Financial Performance

Abstract

Tools of Web 2.0 and Open Data source have witnessed a massive improvement and become the most used platforms to divulgate information and to shrink the gap between Local Government Authorities (LGAs) and their stakeholders. The aim of this work is to test the effect of financial performance on the Openness of the Italian LGAs, in order to assess transparency and participation for improving accountability. Our results show no significant relationship between “Openness” and traditional performance focused on financial autonomy but, on the other hand, we find a strong association between “Openness” variables and a score deriving from the ten financial performance indexes (“Financially Distress” Score). Notice that the use of only one traditional financial indicator is not able to explain the relationship while a more complex indicators derived from a set of 10 financial ratios (as we call “Financially Distress” Score) is considered more appropriate.

Appendix—The Proxies of “Openness”

Open Data. The open data are commonly defined as data that can be accessed and used freely by anyone, without copyright restrictions, patents or other forms of control that limits playback, typically with only obligation to mention the source and share them with the same type of license under which they were originally released. The open data constitute can be downloaded from the Internet free of charge and are designed to implement interoperability of systems and organizations and constitute an essential prerequisite to the implementation of open government, especially through the use of new information and communications technology. It is important to cite the evolution of the concept of corporate transparency, following the enactment of D.Lgs no. 150/2009, is defined as “total accessibility […] of information on every organization’s aspect”, a much broader notion than that contained in the Law no. 241/1990, which governs the right of access to administrative documents.

Web 2.0 Tools. Internet is emerging more and more as the preferred tool of communication and has been deeply renewed compared to the first decade. In fact, the corporate website is no longer the only point of access to information. With the development and spread of social networks, the Web has become in fact in a virtual place of interaction, relationship and dialogue in which information is spread with great speed and second viral mode that use the paths designed by the same social networks. Citizens are more and more informed through their networks of relationships, in which nodes can communicate almost instantaneously, in particular through social media, using the multimedia language, allowing them to exchange large amounts of information in the form of text, still images and audio-visual. The social media and The YouTube Channel represent the two most innovative source of information through the web 2.0 which enhance the accountability of the institution.