Local Governments Managing Austerity: Approaches, Determinants and Impact

The global financial and economic crisis that hit Western countries between 2007 and 2008 has generated an extensive literature. Several policy responses are now recognized, based on the way governments reallocate scarce public resources across budget categories; these approaches have a differential impact on the sustainability of cuts and on performance and trust. What determines the choice of one approach over another is a relevant, yet unexplored, research question. The article highlights the factors driving the adoption of specific crisis management approaches. A conceptual model and key propositions derived from the literature are applied to the case studies of six local governments. A comparative analysis of the interactions among internal and external determinants through a multi‐year timeframe provides valuable insights that improve our understanding of crisis management.