1 MACEDONIAN DECENTRALISATION MODEL: Context and Challenges of the Decentralised Service Delivery...

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MACEDONIAN DECENTRALISATION MACEDONIAN DECENTRALISATION MODEL:MODEL:

Context and ChallengesContext and Challenges of the Decentralised of the Decentralised Service DeliveryService Delivery

Case StudyCase Study

UNDP Regional Project UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service DeliveryWestern Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery

Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

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Republic of Macedonia - Profile

Country area 25.333 sq kmPopulation density 79/km2Population bellow the age of 14 21,8%Urban population 59,8% State system Parliamentary democracyLevel of democracy according to Freedom House FreeParticipation of women in the Parliament 29.17%Ethnic affiliation Macedonians: 64.2%; Albanians: 25.2%; Turks: 3.9%;

Roma: 2.7%; Serbs: 1.8%; Bosniaks: 0.9%; Vlachs: 0.5%

Religion Orthodox: 64.78%Muslim: 33.33%Catholic: 0.35%

Unemployment rate 36.7%Human development level (index and place) 0.793 (60)GDP/citizen 2,243$ (6,850 PPP in $)

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Development contextDevelopment context

Macroeconomic stability Larger degree of trade liberalization 33.54% of the population bellow the poverty line Extremely high unemployment rate The growth: around 4% annually (in average)

In 2007:

The growth was around 6% Gradual increase of the economic reforms Macedonia on the 4th place among the ten top economic reform countries worldwide in 2007 (recognized by the World Bank)


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Key factors for political stability

The Ohrid Framework Agreement - OFAFunctioning of the rule of law

Progress made

Implementation of the legislative part of the OFAEquitable representation of communities in public administrationImplementation of the decentralisationLast parliamentary elections held in democratic manner Political dialogue on issues of fundamental national importance Legal framework for strengthening the independence and the effectiveness of the judiciary is largely in place More efficient and effective policy for fight against corruption and other forms of crime

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State system

Parliamentary democracy

Type of government

Central government Only one layer of local government

Local Government

84 municipalities (local self-government units) The City of Skopje (with 10 municipalities functioning on its territory)

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Broad challenges faced by the country Broad challenges faced by the country

EU integrationCandidate country for European Union (EU) membership - achieved Concrete date for start of the negotiations expected in 2008

NATO accessionInvitation for membership expected (forthcoming NATO Summit, April 2008 in Bucharest – Romania)

Implementation of the Ohrid Framework Agreement - OFAFurther regulation of the use of languages of the communitiesResolving the status of ethnic – Albanian ex-combatants

Socio-economic contextHigh degree of the poverty Extremely high unemployment rate Corporate restructuringAttraction of foreign direct investments Labour market and education reforms


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Specific challenges of the decentralisation process

Decrease disparities between municipalitiesDecrease disparities between municipalities

Ensure appropriate balance among different stakeholdersEnsure appropriate balance among different stakeholders

Ensure an appropriate balance between resource appropriation and spending needs Ensure an appropriate balance between resource appropriation and spending needs

Ensure an appropriate degree of capacity in various fields, on both central and local levelEnsure an appropriate degree of capacity in various fields, on both central and local level

Build partnerships and ensure accountabilityBuild partnerships and ensure accountability

Provide adequate solutions for more dynamic local developmentProvide adequate solutions for more dynamic local development

Increase Increase the standard of municipal tax collection as well as the capacity of the the standard of municipal tax collection as well as the capacity of the municipalities to manage state-owned land. municipalities to manage state-owned land.

Increase the Increase the number and competence of the municipal staffnumber and competence of the municipal staff


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Capacity development issues(1)

Recruitment and promotion of the civil servants still not sufficiently implemented by objective and merit-based criteria

Lack of a strong commitment to meet the announced objectives o More transparent, professional and depoliticised public administrationo Better organised public services

Implementation of the police reform - underway

Law on freedom of information – under implementation

Regulatory Guillotine – launched

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Capacity development issues(2) The ministries are preparing strategic plans but very few are implementing themCapacity to prepare legislation, and hence the quality of draft laws, continues to be unevenThe transparency of the legislative drafting process remains limited and prior consultation of stakeholders unsystematic Activities of civil society are still hampered by lack of finance and heavy dependence on foreign sources of financingThe standard of municipal tax collection throughout the country is dissatisfactory as well as the capacity of municipalities to manage state-owned land The number and competence of staff of municipalities are insufficient.

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Primary client on national level

Ministry of Local Self-Government (MoLSG)

Secondary clients on national level

Ministry of Finance (MoF), Ministry of Transport and Communication (MoTC), Ministry of Environment and Physical Planning (MoEPP), Ministry of Health (MoH) Ministry of Education and Science (MoES)

Primary client on local level

One urban and one rural municipality

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The mandate of the Ministry of Local Self-Government To follow the development and propose measures for promotion of the local self government;To follow the status of the territorial division and developing standards for the size, population and the needs of the local self-government units To propose the system, policy, measures and instruments for achieving a more balanced regional development and for encouraging the development of the economically underdeveloped areasTo attain and use the resources allocated for economically underdeveloped areasTo carry out supervision over the legality of the work of the organs of the local self-government units and the City of Skopje

The mandate of the municipalities

To execute their constitutionally and legally determined competences

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Country policies, rules and norms – Milestones

Ohrid Framework Agreement - signed in August 2001 Amendments of the Constitution – adopted in November 2001In January 2002, a new Law on Local Self-Government was enacted. End of 2003 - Programme for Implementation of the Decentralisation Process 2004-2007 - adoptedAnother 40 laws adopted until 1 July 2005April 2005 - Detailed Plan for Transfer of Competences and Resources (DPTCR) - adopted 30,221 employees and 548 institutions transferred as of 1 July 2005In the area of education (over 25,000 teachers and support staff are transferred ) Municipalities are responsible for employing approx. 40 % of public employees, whereas before the process started, local government accounted for less than 5 %. September 2007 - Programme for Implementation of the Decentralisation Process 2008-2010 - adopted

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The major competencies which have been decentralised

The management and maintenance of primary and secondary schools;The management and maintenance of old age people’s homes and kindergartens;The management and maintenance of local cultural institutions;The management and maintenance of the fire and rescue services;Urban Planning and construction (permitting procedure and transfer of Ministry of Transport and Communication Units responsible for local urban planning)

The fiscal aspects of decentralisation

Transfer of ear-marked (first phase) and block grants (in the second phase of the fiscal decentralisation) to fund education, welfare, fire and rescue services and cultural institutions; Tax shares and the raising of own revenues by the municipalities. Presently the property taxes seems to be the strongest fiscal instrument of the municipalities. The chosen concept lacks clear fiscal equalization tool and favors the urban compared to rural municipalities.

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Priorities of the Ministry of Local Self-GovernmentThe start up of the coordination and the implementation of the Programme for implementation of the decentralisation process 2008 -2010 and the related Action Plan for 2008Coordination of the preparation of 18 laws (mainly changes in the existing laws) and 23 by-laws through the Decentralisation Working Group and the ten thematic Sub-GroupsCoordination of the resolving of the disputes related to the not yet transferred immovable goods with disputed right of ownershipTo assist together with the Ministry of Finance the remaining 33 municipalities and the City of Skopje to enter into the second phase of the fiscal decentralisation

Priorities of the Ministry of FinanceAssist all municipalities, and especially the small and the rural municipalities, to enter the second phase of the fiscal decentralisation;Establish functional and objective financial monitoring system of the realisation of the earmarked, the block and the capital grants by the municipalities; Establish minimum service standards (where they currently do not exist) and reassess the basis of aligning the service delivery based on minimum service standards with the financial capacities of the municipalities as the most proper manner to calculate the costs of the servicesConsider and determine measures for improvement of the grants and develop effective fiscal equalisation system


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Modes of operation, civic engagement, etc. within and across sectors (1)

The Decentralisation Working Group (DWG) - highest inter-ministerial body headed by the Minister of Local Self-Government and focused dominantly on monitoring and reporting to the Government. 16 Different ministries and central government agencies as well as the ZELS are represented.

10 Sectoral sub-groups, for each transferred competence - coordinated by the Ministry of Local Self-Government, members are representatives from the line ministries and ZELS. The Sub-Groups are the level where most of the practical and detailed work is undertaken, and their tasks include the monitoring, assessment of risks, overview of the laws and by-laws and reporting to the DWG


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Modes of operation, civic engagement, etc. within and across sectors (2)

Basis for the coordination between the stakeholders:

A Memorandum of Co-operation with the Association of the Local Self-Government Units (ZELS) which regulates consultation over government decisions and legislation

A Memorandum between the Ministry of Local Self-government, the Association of the Units of Local Self-Government (ZELS) and the Civil Service Agency on co-ordinating the training for the municipal administration which established the Trilateral Committee made-up of these three bodies as the coordinating mechanism for training efforts

A Commission for the Following of the System of Financing of the Municipalities, a body set up according to provisions of the Law on the Financing of the Municipalities. The Commission is made up of representatives of ZELS, the Ministry of Finance and the Ministry of Local Self-Government

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Minister Minister

Unit for Internal audit (3)Unit for Internal audit (3)

State Secretary (1)State Secretary (1)

Sector for sustainable local self-government

development (2)

Sector for sustainable local self-government

development (2)

Sector for Cabinet affairs and international

cooperation (2)

Sector for Cabinet affairs and international

cooperation (2)

Sector for European Union (2)

Sector for European Union (2)

Sector for balanced regional development and

inter-municipal co-operation (2)

Sector for balanced regional development and

inter-municipal co-operation (2)

Unit for planning and co-ordination of the

decentralisation process (8)

Unit for planning and co-ordination of the

decentralisation process (8)

Unit for balanced regional development (6)

Unit for balanced regional development (6)

Unit for negotiations and integration (4)

Unit for negotiations and integration (4)

Unit for support to the activities of the

Minister’s cabinet (7)

Unit for support to the activities of the

Minister’s cabinet (7)

Unit for capacity building of the LSGUs (5)

Unit for capacity building of the LSGUs (5)

Unit for development of inter-municipal and

cross-border co-operation (9)

Unit for development of inter-municipal and

cross-border co-operation (9)

Unit for implementation of

IPA (8)

Unit for implementation of

IPA (8)

Unit for international cooperation (4)

Unit for international cooperation (4)

State Inspectorate State Inspectorate

Bureau for Economically

Underdeveloped Areas (25)

Bureau for Economically

Underdeveloped Areas (25)

Inspectors (4)Inspectors (4)Deputy Minister Deputy Minister

State advisors (4)State advisors (4)

Unit for efficient local governance and sustainable

development of the municipalities (9)

Unit for efficient local governance and sustainable

development of the municipalities (9)

Unit for coordination, monitoring and evaluation (4)

Unit for coordination, monitoring and evaluation (4)

Sector for general affairs (2)

Sector for general affairs (2)

Unit for normative-legal affairs, human resources

and IT (14)

Unit for normative-legal affairs, human resources

and IT (14)

Unit for strategic planning and

budget (4)

Unit for strategic planning and

budget (4)

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