Evaluating the Impact of Urban Good Governance Indicators on the Sustainability of Municipal Revenue Sources

Rapid urbanization in Iran, accompanied by severe financial challenges for municipalities, has led to excessive reliance on unsustainable revenues such as construction-related charges. The present study was conducted to evaluate the impact of urban good governance indicators on the sustainability of municipal revenue sources. The research employed a mixed-methods (qualitative–quantitative) and applied–developmental design. In the qualitative phase, semi-structured interviews were conducted with 10 urban management experts, and through thematic analysis, 16 indicators were identified across two main themes: “urban good governance” (11 indicators including transparency, accountability, rule of law, citizen participation, enhancement of public trust, and social capital) and “revenue resource management” (5 indicators including continuous general charges, service fees, and government transfers). The fuzzy Delphi technique confirmed all indicators in two rounds. In the quantitative phase, by distributing questionnaires among approximately 384 managers and experts, the effects of these indicators on revenue sustainability were examined using multiple regression analysis. The regression assumptions were met, and the model, with a coefficient of determination of 0.978, demonstrated a strong and positive effect of good governance indicators; the strongest effects were observed for “enhancement of public trust,” “rule of law,” and “transparency.” The findings indicate that strengthening good governance can reduce dependence on volatile revenues and lead to diversification toward sustainable revenue sources. It is recommended that municipalities prioritize digital transparency programs and citizen participation initiatives, and that policymakers revise the Sustainable Revenue Law with an emphasis on these indicators.