IDENTIFYING MOTIVATION OF THE LOCAL GOVERNMENTS TO IMPROVE THE SUSTAINABILITY TRANSPARENCY.

• Author: Galera, Andres Navarro

1. Introduction

   The sustainability of governmental actions is a current issue of great concern in research into the online communication between governments and citizens. Various international organizations (European Union, 2011; USAID, 2008) have recommended that governments should inform citizens about the sustainability of their actions in environmental, social and economic areas. One of the most recent statements made in this respect was by the IFAC (2013b) in its recommendations to the G20 leaders concerning the promotion of accountability and sustainability through the adoption of international standards and integrated reporting. Furthermore, there is growing interest among stakeholders regarding the sustainability of public services, together with greater concern among public entities to enhance public confidence in them, by publishing details of their sustainability commitments (IFAC, 2013a).

   Most previous studies have focused on analyzing the role of government websites as tools for information disclosure (Gandia and Archidona, 2008), especially financial information (Carcaba Garcia and Garcia-Garcia, 2010; Gallego-Alvarez et al., 2010). In contrast, insufficient attention has been paid to the dissemination of information on governmental commitments to sustainability and, particularly, to the factors that may enhance such commitments by local governments. Indeed, the lack of empirical research in this area means that much remains to be examined concerning the dissemination of information on the sustainability of government policies (Guillamon et al., 2011). Based on the international pronouncements (IFAC, 2013b) and previous academic studies (Dumay et al., 2010; Guthrie et al., 2010), we study the question of sustainability transparency, defined as the online publication by local governments of information regarding the sustainability of their actions, for the general awareness of the stakeholders.

   The aim of this paper is to contribute to our understanding of the factors that may favor greater transparency in local governments' actions with respect to sustainability. To do so, we analyze the information provided on the websites of local governments in Nordic countries, performing a statistical analysis of its relation with 14 variables, divided into socio-demographic and economic-financial variables. Specifically, we tested whether these local governments publish on their websites the indicators recommended by major international guidelines for sustainability reports (social, economic and environmental). In this analysis, we calculated transparency indices, which were taken as the dependent variables for our study. In this study, governments that disclose more information about sustainability are considered more transparent, and those publishing less information in this respect, less transparent.

   This article is divided into five sections, including the introduction. The next section presents theoretical arguments about the use of web pages and online communication to disclose information on government sustainability. This section provides the conceptual framework for our empirical study. In the third section, we explain the rationale for our sample of local governments and for the choice of variables, and defend the appropriateness of the statistical tool employed. The fourth section then discusses and analyses the empirical results obtained. The fifth and final section is dedicated to presenting the conclusions drawn from these results.

2. The use of websites and online communication concerning governmental sustainability

   Bertot et al. (2010) and Pina et al. (2010) observed that e-government and the use of websites enable citizens to take a more active role in public affairs, through greater transparency, as they can be informed about the activities of public bodies and their contribution to social and economic development, a key aspect of governmental sustainability.

   This interest in the communication of sustainability information has led to the publication of international guidelines for the disclosure by public bodies of their commitments on sustainability. The main guidelines have been developed by AccountAbility (2008) and the UNGC (2009), but the most significant is the document published by the Global Reporting Initiative (GRI, 2006, 2013), and specifically for public administrations, the 'Supplement for Public Agencies' (GRI, 2010).

   According to Guthrie and Farneti (2008) and Mussari and Monfardini (2010), few empirical or theoretical investigations have been conducted into governmental practices regarding sustainability reporting by public organizations and how it can be managed. Various theoretical bases may be proposed to justify the implementation of sustainability-promoting practices, but they are generally addressed in terms of Legitimacy Theory (LT) (Marcuccio and Steccolini, 2009) or of Stakeholder Theory (ST) (Deegan and Unerman, 2006). LT observes the actions taken by managers, usually through information disclosure, aimed at changing perceptions of government in order to increase the legitimacy of its actions and existence. According to ST, the longterm existence of an organization needs the support and approval of its stakeholders (Liu and Ambumozhi, 2009). According to LT, poor performance by an entity may oblige it to disclose more information, in order to explain these results (Marcuccio and Steccolini, 2009). Under ST, different groups of stakeholders and their demands may have an impact on a local government's behavior, pressuring it to provide information.

   Previous research has shown that LT and ST may provide an appropriate theoretical framework to explain the behavior of governments in relation to transparency, as an essential element of accountability. Deckmyn (2002) considers transparency a starting point in building public understanding, participation and involvement. From a cultural perspective, Curtin and Meijer (2006) believe that the relationship between transparency and legitimacy should be considered, due to the changing environment, in order to ensure success, survival and resources. Accordingly, and taking into account the aims of this paper, we believe the selection of LT and ST may be useful, first, as a conceptual basis on which to select possible explanatory variables, and second, to empirically test their usefulness for explaining the level of transparency by governments.

   In local governments, high levels of debt and deficit often result in financial crisis. In such a situation, to maintain or restore legitimacy, or in response to the demands and needs of stakeholders, governments could become more transparent about the sustainability of their actions, as suggested by Marcuccio and Steccolini (2009) on the basis of LT and ST. Therefore, it is interesting and timely to study whether certain factors could favor governments' interest in disclosing information about the sustainability of their actions (Marcuccio and Steccolini, 2009; Navarro et al., 2010).

   However, these two theories are not without criticism. In their empirical study Campbell et al. (2003) demonstrated the limitations of the traditional theories supporting information disclosure, due to the diverse perceptions of those responsible and the variety of channels of communication available for the disclosure of information. Campbell et al. (2003) and Deegan (2002) concur that although LT may explain, in part, the motivations for disclosing information about sustainability, it does not fully account for the performance of organizations in this area. Moreover, Curtin and Meijer (2006) highlighted several weaknesses: few citizens have access to information and those who do, face an excess of it. Putting too much information in websites may even have an adverse effect, encouraging policymakers to maintain strict procedures and avoid innovative solutions or raising stakeholders' hopes.

   Stakeholder theory, too, has been called into question as a theoretical framework justifying the disclosure of sustainability information because, as shown by Elsakit and Worthington (2012), many studies have demonstrated the existence of a gap between the levels of information disclosed by organizations and its usefulness to stakeholders.

   To conclude this section, we define the scope attributed to the term 'sustainability transparency' in the context of this empirical study. In accordance with international pronouncements (CIPFA, 2007; European Conference on Sustainable Cities and Towns, 2004; European Union, 2011; IFAC, 2013a, 2013b; USAID, 2008) and previous academic studies (Dumay et al., 2010; Guthrie and Farneti, 2008; Guthrie et al., 2010), sustainability transparency is viewed as the online disclosure of information concerning the sustainability of the actions of local governments, in order to keep stakeholders well informed.

3. Empirical study of local governments in Nordic countries

   The aim of this research is to study information dissemination with respect to sustainability in the field of local government, identifying explanatory factors for levels of disclosure regarding economic, social, environmental and governance issues. The empirical analysis carried out to achieve this goal is based on the following assumptions, based on previous research, which may be viewed as the pre-study hypotheses. On the one hand, that governments are motivated to legitimize their actions before citizens; secondly, that local governments enjoy greater proximity to citizens and address a larger number and a greater diversity of stakeholders; thirdly, that there are initiatives to standardize the content of information on sustainability; and finally, that local government websites constitute an important instrument for communicating with stakeholders.

   3.1. Sample selection

   We analyzed the websites of the 16 most populous local governments in Denmark, Finland, Sweden and Norway (4 cities per country). The...