PLGP Discussion Paper: On Developing a New National Decentralization Strategy for Albania

While most countries have initiated administrative-territorial reform, improved the functional and expenditure assignments, empowered local governments with additional fiscal capacities, and provided for the use of borrowing by the local governments, this has not been fully developed in Albania. In comparison with other countries in the region Albania is near the lowest levels in terms of fiscal capacity of its local governments. The period from 2005 to 2013 was marked by stalled reforms. During this time, there were some limited initiatives to reform the administrative-territorial structures, but these efforts were not sustained. The existing legal framework for merging local government units (LGUs) was not fully utilized, and the process of administrative-territorial restructuring was not completed. As a result, the administrative-territorial structures in Albania remained largely unchanged, with many LGUs operating at a level that was not conducive to effective governance and service delivery. The establishment of the Minister of State for Local Issues (MSLI) in 2013 marked a new period of reform efforts. The MSLI was tasked with developing a new crosscutting decentralization and local governance strategy, which would provide a framework for the reform of the administrative-territorial structures and the assignment of functions to LGUs. The MSLI also established an inter-institutional working group to support the development of this strategy. The development of inter-institutional arrangements to support decentralization is a critical component of the reform process. The MSLI has established a number of working groups and task forces to support the development of the new decentralization strategy, including a working group on administrative-territorial reform and a sector working group on local government finance. These groups have been tasked with developing recommendations for the reform of the administrative-territorial structures and the assignment of functions to LGUs. The reform of the administrative-territorial structures and expenditure assignments is a key component of the decentralization process. The existing administrative-territorial structures in Albania are characterized by a large number of small LGUs, which can make it difficult to deliver services effectively. The current system of expenditure assignments also creates a number of challenges, including a lack of clarity around the assignment of functions to LGUs and a lack of transparency in the allocation of resources. The current levels and size of the administrative-territorial structures in Albania are a major challenge to the reform process. There are currently 61 municipalities and 373 communes in Albania, which can make it difficult to deliver services effectively. The existing legal framework for merging LGUs is not fully utilized, and the process of administrative-territorial restructuring is not completed. The Albanian Association of Communes (AAC) has conducted a study on the feasibility of merging LGUs, which has identified a number of potential benefits, including improved efficiency and effectiveness in service delivery. However, the study has also identified a number of challenges, including the need for a clear legal framework and the need for adequate resources to support the merger process. The working group on administrative-territorial reform has developed a number of recommendations for the reform of the administrative-territorial structures, including the merger of LGUs and the establishment of a new system of expenditure assignments. The recommendations also include the development of a new system of public-private partnerships (PPPs) and inter-municipal cooperation (IMC) to support the delivery of services. The reform of the revenue assignments and intergovernmental transfers is also a critical component of the decentralization process. The current system of revenue assignments in Albania is characterized by a lack of clarity around the assignment of functions to LGUs and a lack of transparency in the allocation of resources. The current system of intergovernmental transfers also creates a number of challenges, including a lack of clarity around the allocation of resources and a lack of transparency in the decision-making process. The development of a new system of revenue assignments and intergovernmental transfers is a key component of the decentralization process. The new system should provide a clear and transparent framework for the assignment of functions to LGUs and the allocation of resources. The new system should also provide a clear and transparent framework for the decision-making process around intergovernmental transfers. The roadmap for decentralization is a critical component of the reform process. The roadmap should provide a clear and transparent framework for the implementation of the decentralization strategy, including the reform of the administrative-territorial structures, the assignment of functions to LGUs, and the development of a new system of revenue assignments and intergovernmental transfers. The roadmap should also provide a clear and transparent framework for the monitoring and evaluation of the decentralization process. The development of a comprehensive set of fiscal decentralization policies is