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The Case of Accounting Information for Infrastructural Assets Reporting: Local Government Borrowings and Investment Choices in the Context of Moral Hazard and Local Government Politics

The Case of Accounting Information for Infrastructural Assets Reporting: Local Government Borrowings and Investment Choices in the Context of Moral Hazard and Local Government Politics

Dimu Ehalaiye, Nives Botica Redmayne, Fawzi Laswad
Copyright: © 2020 |Pages: 26
ISBN13: 9781522578208|ISBN10: 152257820X|ISBN13 Softcover: 9781799816348|EISBN13: 9781522578215
DOI: 10.4018/978-1-5225-7820-8.ch007
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MLA

Ehalaiye, Dimu, et al. "The Case of Accounting Information for Infrastructural Assets Reporting: Local Government Borrowings and Investment Choices in the Context of Moral Hazard and Local Government Politics." Financial Determinants in Local Re-Election Rates: Emerging Research and Opportunities, edited by Ana Maria Cunha, et al., IGI Global, 2020, pp. 176-201. https://doi.org/10.4018/978-1-5225-7820-8.ch007

APA

Ehalaiye, D., Redmayne, N. B., & Laswad, F. (2020). The Case of Accounting Information for Infrastructural Assets Reporting: Local Government Borrowings and Investment Choices in the Context of Moral Hazard and Local Government Politics. In A. Cunha, A. Ferreira, M. Fernandes, & P. Gomes (Eds.), Financial Determinants in Local Re-Election Rates: Emerging Research and Opportunities (pp. 176-201). IGI Global. https://doi.org/10.4018/978-1-5225-7820-8.ch007

Chicago

Ehalaiye, Dimu, Nives Botica Redmayne, and Fawzi Laswad. "The Case of Accounting Information for Infrastructural Assets Reporting: Local Government Borrowings and Investment Choices in the Context of Moral Hazard and Local Government Politics." In Financial Determinants in Local Re-Election Rates: Emerging Research and Opportunities, edited by Ana Maria Cunha, et al., 176-201. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-5225-7820-8.ch007

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Abstract

In a civil society, citizens require information to assist them in understanding and monitoring how public resources are managed. Accounting information produced by public managers allows such monitoring and helps citizens to participate in the political process when it comes to election or re-election of the politicians. This chapter discusses the case of investments in infrastructural assets and local government borrowing in New Zealand, with an emphasis on the role of accounting information in the context of moral hazard and fiscal accountability of local government politicians and leadership. The evidence in this chapter shows that New Zealand local governments tend to invest significantly more in visible infrastructural assets such as roads, land, and buildings. This confirms the moral hazard theory that local politicians may be prioritizing infrastructure investments that can be seen by their electorate as evidence of their performance in government, presenting a more favourable picture that leads to politicians' election or re-election on local government bodies.

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