The paper starts by analyzing the legal, financial and administrative environment under which municipalities in the Netherlands operate. Afterwards, it goes on to review the public reform processes in Dutch Local Government characterized by the incorporation of "private" sector instruments and practices into public management (Hood, 1995). According to some researchers (Van Helden and Bogt, 2001; Yesilkagit and De Vries, 2002; Sadowski, Nucciarelli and De Rooij, 2009 and De Vries, 2008), this process also known as "New Public Management" , might have increased the vulnerability and the level of uncertainty of Dutch municipalities. The last section of the document, discusses the special bylaw that local governments have in the Netherlands regarding risk management, an instrument deemed innovative, yet in the need of improvement (Boorsma and Haisma, 2005) given the best practices and the specialized literature of risk management.