An Impact Finance Model for Municipalities: The BES-Oriented Strategic Mandate Plan

Abstract

This paper proposes an Impact Finance model for Italian Municipalities, useful for combining the budget policies of local administrations with social and environmental objectives attributable to the Fair and Sustainable Wellbeing (Benessere Equo e Sostenibile, BES) indicators. Specifically, the BES-Oriented Strategic Mandate Plan provides: (i) a context analysis useful for defining the BES positioning of the Municipality, (ii) a BES-Oriented public budget analysis, useful for defining the direct impact of fiscal policies on social and environmental issues (iii) a matrix that allows a combined reading of the positioning and the budget, (iv) the use of interactions between BES domains to evaluate the indirect impacts of fiscal policies on social and environmental aspects . The proposed model allows local administrations to define strategic priorities and impact objectives and in particular to: adopt welfare strategies in relation to a benchmark; connect the activation of specific projects in a synergistic manner, referring them to one or more public expenditure items and to the related BES domain that is associated with them; evaluate the direct impact that municipal planning and individual projects have on public accounts; identify additional dimensions of well-being on which an investment will indirectly impact, offering an overall picture of the impact in terms of improving the living conditions of citizens; calculate the direct and indirect impacts on public spending (multiplier effect).