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Institutional Framework Assessments For Local And Regional Governments Outside Of The U.S.
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Institutional Framework Assessments For Local And Regional Governments Outside Of The U.S.

This report does not constitute a rating action.

Here S&P Global Ratings provides the institutional framework assessments it derives from the application of the criteria "Methodology For Rating Local And Regional Governments Outside Of The U.S.," published July 15, 2019. This commentary is intended to be read in conjunction with those criteria.

Key Publication Information

  • This article is related to "Methodology For Rating Local And Regional Governments Outside Of The U.S.," published July 15, 2019.
  • Since our last publication, we updated the institutional framework assessments for Ukrainian Regions (no change).

Institutional Framework Assessments

The institutional framework (IF) is the set of formal rules and laws, as well as practices, customs, and precedents, that shapes local and regional governments' (LRGs') institutional arrangements and influences their policies in public finance. Our assessment considers historical track record and some of the future changes that are likely to shape the framework. The IF assessment is mostly qualitative (as stated in paragraph 13 of the LRG criteria).

Factors in our assessment are (as stated in paragraph 15 of the LRG criteria):

  • Predictability;
  • Revenue and expenditure balance; and
  • Transparency and accountability.

We use consistent descriptors to highlight the IFs we view as more susceptible to potential change over the medium term. Commentary and credit reports reference IFs with a higher likelihood of receiving an improved (lower) assessment in the medium term as having an improving trend. IFs with a higher likelihood of experiencing a weakening (higher) assessment in the medium term have a weakening trend. For assessments that we expect to remain unchanged, we describe in the reports that the IFs have a stable trend.

The list below shows our scale, assessments, and trends for 56 IFs in 35 countries worldwide, including those for the U.S. states.

We currently have a weakening trend on three IF assessments and an improving trend on two IF assessments. We see stable trends for all other frameworks.

Institutional Framework Assessments As Of Sept. 18, 2024

Group 1 (extremely predictable and supportive); average score: 1.0-1.5

Stable trend 

Weakening trend 

Group 2 (very predictable and well balanced); average score: 1.75-2.25

Stable trend 

Group 3 (evolving but balanced); average score: 2.5-3.0

Improving trend  

Stable trend 

Weakening trend  

Group 4 (evolving and unbalanced); average score: 3.25-3.75

Stable trend  

Group 5 (volatile and unbalanced); average score: 4.0-4.25

Stable trend  

Group 6 (very volatile and underfunded); average score: 4.5-5.0

Stable trend  

Related Criteria

Analytical Contacts:Felix Ejgel, London + 44 20 7176 6780;
felix.ejgel@spglobal.com
Susan Chu, Hong Kong (852) 2912-3055;
susan.chu@spglobal.com
Lisa M Schineller, PhD, New York + 1 (212) 438 7352;
lisa.schineller@spglobal.com
Hugo Soubrier, Paris +33 1 40 75 25 79;
hugo.soubrier@spglobal.com
Methodology Contact:Valerie Montmaur, Paris + 33144207375;
valerie.montmaur@spglobal.com

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