articles Ratings /ratings/en/research/articles/250224-institutional-framework-assessments-for-local-and-regional-governments-outside-of-the-u-s-13426608 content esgSubNav
Discover more about S&P Global’s offerings
Register Reset Password
In This List
COMMENTS

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

Instant Insights: Key Takeaways From Our Research

COMMENTS

WAEMU Sovereigns Can Weather Mounting Global Geopolitical And Trade Risks

COMMENTS

Credit FAQ: China's Two Sessions: No Surprises In Push To Unlock Growth

COMMENTS

CreditWeek: What Are The Risks To Emerging Markets’ Sound Credit Performance?


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, and uses to apply, 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 German States (no change), New Zealand Municipalities (we revised the assessment to "very predictable and well balanced" from "extremely predictable and supportive"), and Polish LRGs (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 records 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 changes 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 55 IFs in 34 countries worldwide.

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

Institutional Framework Assessments As Of Feb. 24, 2025

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  

  • Institutional Framework Assessment: French Polynesia (no publication)

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

Primary Credit Analysts:Felix Ejgel, London + 44 20 7176 6780;
felix.ejgel@spglobal.com
Lisa M Schineller, PhD, New York + 1 (212) 438 7352;
lisa.schineller@spglobal.com
Ryan Tsang, CFA, Hong Kong + 852 2533 3532;
ryan.tsang@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

No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.

 

Create a free account to unlock the article.

Gain access to exclusive research, events and more.

Already have an account?    Sign in