What makes a good local government? The Municipal Governance Scorecard

As the closest public administration unit to the citizens, local governments are the cradle of democracy. Numerous studies emphasize that in societies where trust in institutions is high, the quality of life is also better. In a world where trust in democracy and governments is decreasing, enhancing citizen trust and participative democracy at the local government level is critical to improve this situation. Good governance is the key to improve trust to institutions.

“What gets measured gets improved” is among the fundamental principles of quality management. Measuring the governance culture at local governments is a crucial step to start improving to improve the trust of citizens. Obviously, measurement alone is not enough and it is essential to learn from good examples and implement them. Therefore, in 2017, the Argüden Governance Academy developed the Municipal Governance Scorecard (MGS) model to measure governance culture at municipalities.

Municipal Governance Scorecard (MGS) model

During its development, MGS was carefully crafted to align with numerous national and international principles, models, and regulatory standards in order to make it easily adoptable for use in different geographies:

• Good Governance Principles for citizen-centric Public Sector (UN, Council of Europe, OECD)
• Council of Europe Principles of Good Governance and the European Label of Governance Excellence (ELoGE)
• United Nations (UN) Sustainable Development Goals
• Organization for Economic Co-operation and Development (OECD) Quality of Life Index
• European Foundation for Quality Management (EFQM) Excellence Model
• International Financial Reporting Foundation – Integrated Reporting (IFRS )
• Relevant National Legislation in Türkiye (5393, 5216, 5018, etc.)
• National, Regional, and Sectoral Development Plans

Organizations are typically subjected to performance evaluations based on the outcomes of their activities during the recent past. However, it is crucial not only to assess WHAT results were achieved, but also to focus on HOW they are achieved to assess their impact on building trust. Gaining the trust of stakeholders for recurring activities every year significantly improves performance in the future.

MGS does not measure the performance of municipal activities such as service delivery and investments, but rather focuses on measuring if the activities conducted are done in a way that builds the trust of citizens. Performance is context specific and may be influenced by many uncontrollable factors such as the diversity and needs of citizens living within municipal boundaries, resources of the municipality, and the level of previous investments. However, good governance approach and processes that establish trust are more easily comparable among municipalities, trigger peer learning to ensure continuous improvement in performance over the long term.

Citizens’ perspective

A distinctive feature of this research is that it is not a perception measurement, particularly as perceptions may be unduly influenced by recent events not relevant to the subject.  It is neither conducted by posing questions to municipalities, as such an approach may bring biased results. Instead, MSG evaluates the culture of good governance from the citizens’ perspective based on information directly disclosed to the public. Conducting the research from the “citizens’ perspective” means that any citizen can assess the information and documents that are publicly disclosed by the municipality and examine how inclusive, transparent, accountable, and fair the municipal decisions are. This approach also encourages improving the quality of information presented to citizens in terms of transparency and accountability to gain their trust.

Therefore, MGS aims to sustain and improve the trust of citizens by measuring the culture and practices of good governance in municipalities, contributing to the improvement of sustainable development and quality of life. This governance measurement innovation, developed in 2017 and first implemented in 2018 for İstanbul district municipalities, was showcased as a global best practice by the United Nations (UN) and the Organization for Economic Co-operation and Development (OECD). In Türkiye, some of the insights and recommendations presented in the research have already been implemented by local governments as well as civil society organizations.

Istanbul municipalities improved 10 percent

After five years, the MGS model was utilized to analyze the Istanbul district municipalities, again. The Municipal Governance Scorecard 2023 aimed to revisit the culture and practices of good governance in the 37 district municipalities of İstanbul. By comparing the research results with those of 2018, it provides an opportunity to highlight the changes that occurred, identify areas that have improved over the last 5 years, and shed light on enhancements to be made in the upcoming period.

According to the 2023 research results, Istanbul District Municipalities have achieved approximately a 10% improvement in governance performance over the last five years, with the average score increasing from 5.0 to 5.6. Looking at the past five years, there district municipalities started to adapt innovative governance practices such as Integrated Reporting, Participatory Budgeting, publishing the Municipal Council minutes of meetings publicly, sharing information about their asset values, and obtaining the right to use the European Label of Governance Excellence (ELoGE). While these good practices are becoming implemented, some setbacks have also been observed compared to 2018, including a decline in seeking public opinion during service planning, sharing information about properties, publishing Municipal Commission reports, and a decrease in the employment of internal auditors.

Seven key areas for good governance

MSG provides development recommendations in seven key areas for municipalities to improve good governance practices and enhance citizen trust:

1. Adoption of a Data-Driven Governance Approach:
   Decision-making, resource utilization, implementation, and communication processes should involve data-enhanced decision-making.
2. Increasing Information Quality Sharing:
   As the basis for decisions, information should be presented actively to various stakeholders in a clear, accurate, complete, and accessible manner.
3. Inclusive Stakeholder Engagement:
   Consultations in strategic planning, budget preparation, and service design processes should encompass all relevant stakeholders and all stakeholders that may be potentially impacted are consulted and informed.
4. Empowering Meaningful and Effective Stakeholder Engagement:
   Goals, resources, and constraints should be shared with the stakeholders prior to the consultation process. At the end of the process, decisions on which recommendations will be implemented, and reasons for these decisions should be shared with the stakeholders.
5. Adoption of an Integrated Governance Approach:
   Utilization of data and information about how different stakeholder groups may be affected economically, environmentally, and socially in the short, medium, and long term should be considered when making decisions, ensuring a fair balance and public disclosures should include all material impacts to various stakeholders.
6. Ensuring Continuous Learning and Development:
   Establishment of institutional processes for monitoring, comparing, evaluating, learning, and continuous improvement regarding the outcomes of decisions. Transparent sharing of these evaluations with stakeholders.
7. Learning from Good Practice Examples:
   Monitoring and adapting good governance practices at national and global levels according to the municipality’s needs and implementing them.

In summary, the Municipal Governance Scorecard provides an opportunity for the candidates in the upcoming municipal elections and for various NGOs with societal concerns to assess the governance approaches adopted by municipalities to enhance citizen trust. The MGS offers insight for local governments in terms of good practices and applicable tools to improve the quality of life in the preparation of post-election 5-year strategic plans, budgets, and service designs. It serves as a valuable resource for shedding light on approaches that contribute to building citizen trust and the overall improvement of living standards.