Composite Index of Local Fiscal Stability, Efficiency, Sustainability, and Livability

Citizen-centric local governance requires fiscally stable and efficient local governments that contribute to sustainable and livable communities. The central research objective herein is to provide an assessment of the progress made by local governments across four dimensions: fiscal stability (F), efficiency (E), sustainability (S), and livability (L), using a composite index that relies on quantitative indicators. This study compares 12 countries divided into two regions (Central Eastern versus South Eastern Europe) that share similar historical, legal, and socio-economic backgrounds but differ in the pace of reforms. The progress of each country and region is compared in a broader context of 35 European countries. More specific research questions include determining: what the most influential factors are for explaining significant cross-country differences; whether a greater reliance on property taxes has been associated with more FESL progress; what frontrunning countries have in common; and whether larger fiscal resources and their more efficient use automatically translate into progress in promoting the sustainability and livability of communities.