The Virtuous Circle of Local Government Financial Sustainability
A mental model is a representation people hold in their minds of how things work in the real world. A good mental model simplifies complex systems in a way that helps people make more informed and better decisions. Finance officers can improve their own thinking and support others in making better decisions by creating and sharing stronger mental models for complex public finance topics.
This model depicts a cycle of financially sustainable local government, which highlights the role of quality and efficient services. As long as all the arrows are “green” — meaning each part of the cycle is working as it should — the circle continues. If any of the arrows turn “red,” indicating a breakdown in one part of the cycle, the circle is broken, and trouble may follow.
Publication Date: August 2025
