Impact of Local Self-Government Institutions on Creating a Business-Friendly Environment

Abstract

The chapter objective is to demonstrate application possibilities of Multi-Criteria Analysis (MCA) in the specific local economic development problem in Serbia that refers to assessment of Local Self-Government (LSG) institutions' capabilities to act in order to create business-friendly environments and increase entrepreneurial activities. The primary aim of the chapter is to formulate an adequate multi-criteria model for evaluation of institutional cooperation between business councils, as representatives of local authorities and the business community in observed LSG units. Results indicate inadequate quality and functionality of the business councils, although cooperation has been established between the business councils, as a local government institution, and representatives of business community. Data analysis is conducted using relevant statistical methods. For multi-criteria analysis of subjective preferences of Local Economic Development (LED) offices has been applied Analitic Hierarchy Process (AHP).