Vilnius claims the top position in the Lithuanian Municipal Performance Index for a third year in a row, surpassing Klaipėda and Kaunas city municipalities. Though Vilnius has maintained the top ranking, the port city of Klaipėda is catching up fast. Sound financial management, cost-effectiveness and the lowest debt among city municipalities make Klaipėda a particularly strong competitor. As regards the top three district municipalities, Klaipėda has once again forged ahead of Kaunas, and Palanga took the third place, thus improving its standing by 3 positions since last year. In general, the 2017 Municipal Performance Index shows that the gap between economically strong and poor regions is widening.

Compiled since 2011, the Lithuanian Municipal Performance Index ranks the performance of municipal governments in three overarching categories: municipalities for citizens, municipalities for investors, and municipal governance and administration. The Index measures the extent to which local governments create favorable living conditions, promote freedom of thought, encourage investments, and foster good governance and provides separate rankings of six city municipalities and 54 district municipalities of Lithuania.

This year’s best-performing municipalities are distinguished by economic activity, the creation of more well-paid jobs, a lower number of welfare dependants, and lower emigration levels. The capital city of Vilnius which attracts two thirds of foreign investment has a relatively low unemployment rate and is the only city with a growing working population. The index also shows that district municipalities neighboring the biggest cities are better-off as more and more people chose to work and live there.

Overall, key indicators show positive trends in both city and district municipalities: the average monthly wage has increased by 9 percent, the unemployment rate has decreased by 8 percent, and the number of welfare dependants has declined by 20 percent. On the other hand, municipal indebtedness, emigration, and shrinking investment remain among the key problems of some less well-off municipalities. One third has lost over 2 percent of their population and some have merely attracted one euro in investment per capita.

2017 rankings:

Top city municipalities: Vilnius, Klaipėda, Kaunas, Šiauliai and Panevėžys.

Top 5 of 54 district municipalities: Klaipėda, Kaunas, Palanga, Druskininkai, Mažeikiai.

The 2017 Lithuanian Municipal Performance Index (in Lithuanian) is available for download here.

In the index, municipalities score if they:

• do not live beyond their means and ensure efficient management and transparency of public finances;

• ensure freedom of choice and promote competition between service providers;

• decrease the tax burden and create favourable business conditions;

• manage assets effectively and sell assets unrelated to the performance of their core functions;

• engages with the private sector in the performance of their functions;

• reduce the administrative and bureaucratic burden.

In 2014 the LFMI’s Municipal Performance Index won the prestigious $100,000 Templeton Freedom Award which recognizes the most exceptional and innovative contributions to the understanding of free enterprise, and the public policies that encourage prosperity, innovation and human fulfilment via free competition.