This chapter identifies local self-government units (LGUs) in the Federation of Bosnia and Herzegovina (FBiH) that have achieved significant success according to the development index (DI). By employing a comparative analysis with quantitative data sources, this chapter focuses on understanding and identifying the possible underlying explanation behind the success of FBiH’s LGUs. As such, the chapter investigates the key characteristics that distinguish highly developed LGUs and explores the factors contributing to their development, with a particular focus on the possible roles of local policies. Utilizing a mixed-methods approach, the chapter examines the relationships between business knowledge, fear of failure, political stability, and housing affordability, and how these factors correlate with the LGUs’ DI. The results show that LGUs with higher development levels tend to foster environments that encourage entrepreneurial growth, reduce psychological barriers to innovation, and provide political and economic stability. Moreover, housing affordability emerges as a critical challenge in these areas, indicating the need for targeted policies to support youth in accessing affordable housing. This chapter highlights the role that LGU policies might have in shaping these variables, suggesting that local governments are not merely passive actors but active drivers of economic growth. The findings underscore the importance of policy strategies that address both individual skills and systemic barriers, ultimately contributing to the sustainable development of LGUs. As such, the chapter offers a valuable framework for policymakers, researchers, and local authorities, enabling them to understand and replicate successful practices in their own LSGs.