Over recent decades, nations worldwide have been struggling with public finance difficulties and other organizational and functional challenges that, inter alia, led to the EU Fiscal Stability Treaty in 2012. Under various reforms, poor-performing local authorities are subject to continuous pressure to employ turnaround management strategies – strategies borrowed from the private sector that are assumed to be effective in public-sector contexts. Based on insights from institutional theory, we argue not only that turnaround management strategies have been either poorly matched to the causes of failure in the government sector or poorly implemented, but that turnaround management strategies will almost always tend to fail in the public context. Based on survey data collected in local authorities, we empirically verify this argument. Theoretical and practical lessons for improving reforms in the government sector and other public organizations that face crisis are suggested.
