LPSA Expert Working Group on Europe & Central Asia – Open Meeting – September 2026

The LPSA Regional Working Group for Europe & Central Asia (ECA) held its open meeting on September 30, 2026. The session was moderated by Mr. Adrian Ionescu, Co-Chair of the LPSA ECA Regional Working Group and Technical Advisor on Public Administration at UNDP Moldova.

The meeting brought together practitioners and experts from across the region to discuss how local government performance can be monitored in ways that support better service delivery, accountability, strategic planning and continuous improvement, while preserving local autonomy.

In his opening remarks, Mr. Ionescu highlighted the need to balance local government autonomy with the responsibilities of central government for minimum service standards, equitable access to services and fiscal sustainability. He outlined several practical questions for the discussion, including what performance data should measure, how it should be used, how municipalities should be compared fairly, and how monitoring systems can encourage improvement without creating excessive administrative burdens.

Mr. Karl Annus (Estonia), Project Manager at the Ministry of Regional Affairs and Agriculture, Estonia opened the presentations with the “Minuomavalitsus.ee” (“My Municipality”) platform, a digital platform for monitoring and benchmarking local government performance. The platform covers 78 municipalities and 18 public service fields, using more than 700 indicators organized into basic, advanced and excellent levels. The indicators cover areas ranging from water and waste management to youth work, culture and the local business environment. Performance is presented through a 0–9 scale, allowing municipalities to assess their position and identify areas for improvement. The platform serves three groups: local officials, who gain a benchmark and a healthy, data-driven incentive to improve; central government, which gets a bird’s-eye view of where support is needed; and residents, who can use the data to engage with officials.

Mr. Annus explained that data comes from around 30 national registries, annual questionnaires to municipalities and a biennial resident satisfaction survey covering all service fields. The satisfaction survey involves more than 10,000 participants and costs approximately €60,000. An important feature of the Estonian approach is the involvement of different stakeholders in developing and reviewing indicators. Working groups include municipal and ministry representatives, NGOs, unions and academics, while the indicators are reviewed by a Local Service Evaluation Council.

The platform is increasingly used in practice. Municipalities use the data for strategic planning and performance discussions, while some mayors use the dashboard in reviews with municipal departments. The data are also used in public discussions and, in some cases, by ministries in targeting or determining eligibility for specific support programmes. A 2023 World Bank survey indicated that 57% of surveyed officials used the dashboard several times a year and 60% considered it directly useful for their work.

Mr. Peter Riis (Denmark), Chief Consultant at the Economic Secretariat of Local Government Denmark (KL), presented Denmark’s “Know Your Municipality” benchmarking system. Denmark’s system focuses primarily on providing local politicians and managers with accessible information that can be used to support decision-making. The annual publication gives five to six key indicators per service area, compares each municipality with the other 97 and with the national average, and adds “why is this interesting?” boxes and discussion questions for councils. The publication covers financial, operational and service-related indicators, including expenditure per pupil, school performance, employment outcomes and employee sickness absence. Each indicator is accompanied by explanatory information and questions intended to stimulate discussion among municipal councils.

Mr. Riis emphasized that the publication is deliberately produced in printed form so that councillors and managers can use a common set of figures during council discussions. It is complemented by online dashboards that are updated more frequently and provide opportunities for more detailed analysis and trend comparisons. Municipalities also have access to a login-protected section with more detailed information about their own performance.

A key enabling factor is Denmark’s standardized and mandatory chart of accounts, which ensures that financial information is comparable across municipalities. Data are drawn from Statistics Denmark, relevant ministries and KL’s own data collection. Municipalities primarily use the benchmarking information during annual budget discussions, comparing expenditure across service areas and considering whether spending and service levels are consistent with political priorities and the experience of comparable municipalities.

Mr. Viktoras Sirvydis (Lithuania), Expert at Lithuania’s Central Project Management Agency (CPMA), presented an integrated analytical framework developed to support municipal planning and financial management. Developed under an EU RRF Project: “Assessment of Municipalities’ Opportunities to Increase Revenue through Analytical Tools Development”, the framework combines a Quality of Life Index, a Revenue Gap Analysis Tool, and an Expenditure Gap Analysis Tool. The tools are increasingly used by municipalities for strategic planning, budgeting, and policy analysis.

The Quality of Life Index was developed from a large pool of potential indicators and currently uses 40 representative indicators covering areas such as living conditions, entrepreneurship, healthcare, education, demographic and civic engagement, and public infrastructure and safety. To support meaningful comparisons, municipalities are grouped into four peer clusters, including large cities, resort municipalities, rural municipalities and peri-urban/developed municipalities.

The expenditure gap analysis uses econometric models to compare actual expenditure with an estimated level of expenditure based on relevant input and output indicators. The approach is applied across several functional areas, including education, social protection, economic affairs, housing, culture and general administration. For example, education expenditure can be assessed against factors such as the number of pupils and teachers, school size and floor area, helping municipalities identify potential inefficiencies in their service networks.

The revenue gap analysis examines differences in tax rates, tax bases and tax reliefs and estimates potential revenue implications. Interactive Power BI tools allow municipalities to model different scenarios, such as changes in tax rates or service demand, and assess their potential budgetary effects.

Methodology to assess the sustainability and institutional capacity of local governments in R.Moldova

Mr. Adrian Ionescu (Moldova), Technical Advisor on Public Administration at UNDP Moldova presented the draft “Methodology to Assess the Sustainability and Institutional Capacity of Local Governments in the Republic of Moldova,” developed in support of Moldova’s ongoing territorial-administrative reform. The proposed framework aims to assess the viability, financial capacity, and institutional performance of local governments through a comprehensive assessment system totaling 200 points.

The methodology consists of three main dimensions: ATU viability, financial performance, and institutional and service-delivery capacity. The assessment draws extensively on existing statistical and budgetary information while also examining human resources, governance capacity, infrastructure, and access to public services.

The methodology is intended to provide an objective basis for monitoring local government performance, supporting reform implementation, and identifying municipalities requiring additional assistance. Preliminary findings suggest that many municipalities face challenges related to sustainability and administrative capacity. Participants discussed the potential incorporation of citizen satisfaction measures, while recognizing practical considerations related to costs and implementation.

In a written contribution submitted ahead of the meeting, Ms. Zsuzsanna Farkas (Hungary), Head of Department and Technical Advisor, Urban and Regional Development Deputy Secretariat, Ministry of Rural and Local Development, shared the Hungarian experience and her observations on what a monitoring system should take into account. It sets out five dimensions of monitoring system development. The first is an inventory of available datasets: who produces each dataset and at what territorial level, how often it is updated and how much cleaning it needs, how comparable the data and indicators are, and whether an indicator can be derived from existing databases or requires new data collection. The second is agreement on a common set of core indicators, supplemented by sectoral indicators, while avoiding an excessive indicator system so as to save local capacities for analysis. The third is the participation of local actors in indicator review, including their involvement in the selection and interpretation of data and a periodic check of outliers, to establish whether they reflect a data error, extended functions or a service or financial problem.

The fourth dimension is the interpretation of monitoring results. Good performance should be made visible and transferable to others; shortcomings call for joint analysis, assistance and an improvement plan, with administrative measures reserved for serious and persistent problems. The fifth is reporting back to local decision-makers, with feedback on the reported data that compares each municipality with others in a similar position and helps to identify the causes of differences in order to support improvement.

Presently in Hungary there are parallel settlement level databases, but there is no single platform that presents access to, the cost, quality and outcomes of all local public services in a uniform way. The Ministry’s objective is to have coordinated sectoral datasets that allow comprehensive analysis, supported by a databank for the collection, management and cleaning of data. This information should be made accessible to all actors, at different government tiers and functions enabling more comprehensive analysis and evidence-based decision-making

The Q&A and discussion focused on how municipalities use performance monitoring systems in practice and the extent to which benchmarking influences local decision-making. Participants agreed that strategic planning and budget preparation are among the most important practical applications across all country experiences presented.

A recurring theme was the challenge of measuring service quality. While financial and output indicators are generally available and relatively easy to monitor, developing reliable indicators that capture service quality and outcomes remains a significant challenge across countries. Participants also discussed the importance of ensuring local ownership of monitoring systems and using benchmarking results to stimulate learning rather than merely ranking municipalities.

Another key point of discussion concerned the role of performance monitoring in supporting territorial reforms, improving resource allocation, and strengthening accountability between local governments, citizens, and central government institutions.

Key Lessons

• Benchmarking can support better local decision-making when information is presented in a clear and accessible way and is connected to strategic planning and budgeting. Financial data and service performance indicators should be evaluated jointly.
• Peer comparison needs to account for differences between municipalities. Lithuania’s clustering approach demonstrates the importance of comparing municipalities with sufficiently similar characteristics.
• Comparable financial data are essential. Denmark’s standardized chart of accounts provides a strong foundation for meaningful expenditure comparisons.
• Performance monitoring should focus not only on measurement, but also on use. The practical value of monitoring systems depends on whether municipalities use the results to inform planning, budgeting, management and public discussion.
• Service quality remains a major methodological challenge. Quantity, coverage and expenditure are generally easier to measure than outcomes, quality and citizen experience.
• Citizen feedback can strengthen performance monitoring, but representative satisfaction surveys can be costly, particularly where monitoring covers a large number of local governments.
• Usability and simplicity are critical. Complex monitoring systems risk limiting their practical value if local politicians and managers cannot easily interpret and apply the results.

We need your help to make this meeting a success: If you have any updates about decentralization or local governance reforms in your country; updates about new research; or information about local government projects that you would like mentioned during the open meeting, please email the Working Group co-chairs at eca@decentralization.net so that a brief announcement can be made at the beginning of the meeting.

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