Vora’s Increased Own Source Revenues Provide Improved Local Services
Intergovernmental Dialogue and Consultation Lead to Better Policies

By Elton Stafa and Erald Lamja – 

“Equal access to relevant, quality education creates pathways for greater economic growth, improved health outcomes, sustained democratic governance, and more peaceful and resilient societies”, states the U.S. Government Strategy on International Basic Education.

Throughout 2017 and 2018, USAID’s Planning and Local Governance Project in Albania (PLGP) partnered with the Ministry of Finance and Economy (MoFE), the Ministry of Education, Sport and Youth (MoESY) and local policymakers and experts to ensure that the full decentralization of preschool education at the municipal level is accompanied by a stable financing system that works to improve the quality and access to preschools.

As a result of our joint efforts, funding for preschool education teachers in 2019 will increase by 9.1% when compared to 2018, while the funds will be allocated to local governments, based primarily on the number of pupils – as required by the Albanian legislation and as recommended by the international best practices. These two changes allow for the hiring of at least 438 new preschool teachers (10% more) that will be allocated in those municipalities that have a more urgent need based on the preschool pupils to teacher ratio. This will reduce class sizes from an average of 18 to 15 pupils per teacher and high of 26 to 18 pupils per teacher in some extreme cases like the municipalities of Tirana, Kamez, Durres etc., creating therefore the preconditions for a more qualitative service.

Preschool education is the costliest – and arguably the most important for Albania’s future – of the new functions that were transferred to local governments in 2016. For three consecutive years, this function was financed with transitory earmarked specific transfers for every singly municipality, calculated on the basis of historical costs by the MoESY and the MoFE. The transitory period ends in 2018, and as of January 2019, the earmarked specific transfers will be transformed in unconditional transfers at full local discretion. Besides the transformation of earmarked grants into unconditional grants, Albanian policymakers at the national and local level needed to improve the method of allocating preschool education funds to each municipality.

Historically, funds were allocated on the existing number of teachers employed in the system in each municipality. On the other hand, the Albanian legal framework requires that funding preschools, should be allocated primarily on the number of pupils. The analysis conducted by PLGP shows that, the current system does not adequately reflect the social and demographic changes over the past 27 years in Albania and that this, coupled with the unequal enforcement of the of regulations on class sizes, have led to significant differences and disparities in preschool education quality in Albania.

To address these disparities, and ensure a more stable financing system, PLGP partnered with the MoFE and MoESY to conceptualize Albania’s new system for allocating funding for preschool education. As of 2019, the system will be based primarily on the number of pupils (60% on the number of pupils and 40% on the number of teachers). This will help improve the service by better reflecting the demographic changes of the past 27 years and at the same time smoothing out disparities within and across municipalities, while helping improving quality and access to preschools.

Ultimately, this reform positively impacts 70% of Albania’s preschool pupils living in half of Albania’s municipalities.

“This is not statistics, but a real opportunity to improve the situation in those communities that have a more urgent need for preschool teachers and provide for a better service for the youngest of our citizens,” states the Minister of Finance and Economy Arben Ahmetaj.


Photo by Erald Lamja

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