Transparency in local government: Theory and evidence

Transparency is vital to good governance as it ensures accountability, integrity, and citizen participation. However, measuring transparency remains a challenge due to the ambiguous nature of human language. Traditional measurement approaches rely on binary or categorical dimensions, which can lead to limited insights and inaccurate policy decisions. To address this challenge, we develop a transparency indicator based on multiple metrics. On the one hand, fuzzy metrics are employed to quantify categorical dimensions; on the other hand, standard metrics are used to compute the overall transparency indicator. The notion of transparency is contrary to the binary principle of having a property or not, that is, to be transparent or not. In our case, we apply a novel methodology designed for formative measurement and partially compensatory models using a set of qualitative dimensions. This tool provides a measure of how close (observations close to 1) or far (observations close to 0) each observation (in this setting, the municipality) is from the analyzed concept. This is calculated for each indicator while preserving the metric structure. In the municipality setting, this approach captures the complexity of transparency and can better identify areas for improvement in local governments. In a second step, we analyze the political, economic, and social determinants of this transparency index, relying on spatial econometric techniques to account for spatial dependencies and to ensure the accuracy of our findings. We use a novel dataset that comprehensively measures transparency at the municipal level in the Valencian region. As far as we know, this is the first database that covers all municipalities in the region. By capturing the complexity of transparency, our approach can better identify areas for improvement and lead to more effective policy interventions. We argue that traditional approaches that rely on binary or categorical variables may oversimplify the concept, resulting in inadequate policy solutions that fail to address the real challenges faced by local governments.