Local Governments Debt

Living reference work entry
DOI: https://doi.org/10.1007/978-3-319-31816-5_2309-1



  • Debt is a liability in which a creditor has a claim on the debtor.

  • Debt instrument is a financial claim that requires payment(s) of interest and/or principal by the debtor to the creditor at a date, or dates, in the future.

  • Total gross debt (“total debt” or “total debt liabilities”) consists of all liabilities that are debt instruments.

  • Net debt is calculated as gross debt minus financial assets corresponding to debt instruments.

  • Domestic debts are debt liabilities owed by residents to residents of same economy.

  • External debts are debt liabilities owed by residents to nonresidents.

  • Interest is the cost (expense) that the debtor incurs for the use of the principal outstanding.

  • “Golden rule” of balanced budget prescribes that local authorities should never take on debt to cover current expenditure; it allows, or even...


Local Government Public Debt Golden Rule Capital Budget Fiscal Federalism 
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Authors and Affiliations

  1. 1.Research Centre in Political Science (CICP)University of MinhoBragaPortugal