Fiscal Transparency and Accountability in Local Self-Government Units: Evidence from North Macedonia
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Abstract
The debate on the openness of governments and local self-government authorities toward improving transparency has become a fundamental postulate of democratic governance—not only in the Republic of North Macedonia but more broadly. Creating an efficient and transparent control system over public spending should prevent misuse of public funds and help combat the high incidence of corruption. Therefore, the aim of this research is to analyze the fiscal transparency and accountability of local self‑government units in the Republic of North Macedonia. A key novel contribution of this study is the integrated application of the PEFA framework and the Index of Open Municipalities (IOM), two complementary yet rarely jointly employed methodologies, to assess municipal fiscal transparency. By combining a performance-based expenditure assessment (PEFA) with an institutional openness index (IOM), the study offers a multidimensional evaluation of transparency. The research relies on publicly available data for a representative sample of 16 municipalities over a three-year period (2021–2023), supplemented by primary data obtained through interviews and structured survey questionnaires. Another innovative aspect of the study is the comparative perspective across municipalities, particularly the systematic differentiation between urban and rural local governments. This approach draws attention to structural disparities in transparency practices that remain largely unexplored in the domestic literature. The findings confirm that fiscal transparency is not merely a normative obligation but a key mechanism for strengthening accountability, inclusiveness, and responsible governance at the local level. Although positive trends have been observed, the analysis shows that the average level of transparency in Macedonian municipalities remains unsatisfactory. Significant differences were noted between urban and rural municipalities, with the former demonstrating higher levels of transparency across all dimensions. By integrating PEFA and IOM and by introducing a comparative assessment between different types of municipalities, this study provides new empirical evidence and a more comprehensive analytical framework for evaluating fiscal transparency at the local level in North Macedonia.
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