Effective Decentralization Policies

SUPPORT EFFECTIVE DECENTRALIZATION

In 2013, the Government of Albania established a working group of key stakeholders, including the PLGP, to prepare a series of legal reforms designed to transfer authority, responsibilities, and resources from the national government to local governments. Decentralization encompasses political decentralization, administrative decentralization, fiscal decentralization, and territorial decentralization and is intended to help secure a sustainable future and European Union membership for Albania. The most ambitious and visible achievement is the consolidation of 373 local governments into 61 in 2015.

The Planning and Local Governance Project approaches decentralization reform in a coordinated and holistic manner. The PLGP promotes an inclusive dialogue between the Government of Albania, local government authorities, civic associations, citizens, and others and helps build a bipartisan consensus for more equitable distribution of resources and improved delivery of public services. Indeed, the GOA often depends on the PLGP to bring stakeholders to the table when political divisions would otherwise keep them apart.

The PLGP conducts assessments, prepares background technical analyses, organizes study tours, drafts policy and legislative provisions, conducts training, and undertakes other activities needed to address such issues as: clarifying roles and responsibilities between the national and local governments; building administrative capacities at all levels; stimulating popular participation in local governance; assisting local governments advocate for themselves; and implementing effective fiscal decentralization.

The PLGP is a leader in providing technical assistance to the GOA. The PLGP spearheaded the drafting and finalizing of the National Crosscutting Decentralization and Local Governance Strategy, which was approved by the Council of Ministers in 2015, and the Law on the Organization and Functioning of Local Governments, which is expected to be approved by Parliament in _____________, and which defines the rights and responsibilities of the 61 newly-created local governments. ­­­­­­­

Fiscal autonomy is at the core of decentralization. If local governments are empowered to carry out decentralized functions effectively, they must have adequate financial resources and the authority to spend those resources as they choose. The PLGP has developed and disseminated detailed guidance on: the optimal size of intergovernmental transfers from the national government to local governments for general or specific uses; expansion of local revenues through property or other taxes or charges; municipal access to debt financing; and mechanisms to recover the costs of public investments or capture land value increases. With the support of the PLGP, public-private partnerships have assumed increasing importance for fiscal decentralization in Albania.

Notably, the PLGP proposed a new formula for allocating of unconditional grants from the national to local governments. The formula is explained in a policy paper, Creating an Equitable, Transparent and Predictable Unconditional Grant Formula, and can be modeled to show impacts to individual local governments under different scenarios of intergovernmental finances in a PLGP-developed spreadsheet. The PLGP has been asked by the GOA to help prepare the country’s first-ever comprehensive Law on Local Finance in 2016. A PLGP publication, Recommendations for a Draft Law on Local Finance, is helping initiate the process.

As decentralization progresses, the PLGP is training municipal councilors, the local government legislators, on such topics as: the legal framework for local governance, roles and responsibilities of mayors and councilors and mayors, citizen participation, constituent relations, territorial planning, economic development, budgeting, and planning.

PLGP activities also reduce space for corruption. By building transparency and citizen involvement into the public decision making process, and by supporting precise and inclusive regulations with clear responsibilities and a minimum of discretion, the PLGP lessens the opportunities for those in power to grab public resources for themselves.

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Designed by Durim Tabaku