DECENTRALIZATION IN ALBANIA

TOPICS Context Technical Issues in Social Sectors Accountability Country Situation Current Status of Decentralization Political Economy Governance and Corruption Capacity of Government Technical Issues in Social Sectors Education Health Social Protection Accountability

CONTEXT Albania meets none of Bahl’s correlates of decentralization—e.g., size of Maryland, 3 million people; ethnically homogeneous (small Greek minority) EU sees decentralization as indicator of political reform. Albania wants to join EU. Objectives otherwise unclear. Weak state, weak civil society Elected councils for 448 cities, municipalities, communes Regional level: voluntary association of council leaders Deconcentrated elements—e.g., 36 district education offices Decentralization process like Indonesia’s: went to laws

IT’S THE POLITICS, STUPID Ranking on Transparency International corruption scale deteriorating Prior to last election, opposition party dominated local elections Minister of Local Government and Decentralization = relative of current PM Huge rush to decentralize before next elections Deals cut in dead of the night, abrogating agreements on process “This is a fight over who gets the 10 percent”—and over political patronage to control outcomes of local elections

EDUCATION How expenditure responsibilities should be assigned fairly clear (see handout) Wholesale decentralization of sector a bad idea HUGE problem of getting from A to B Political consensus about allocation of responsibilities among levels of government (regional problem) Financing and broader incentive framework Identifying and targeting limited # of capacity deficits

HEALTH: Three Current Issues for Decentralization Policy Defining the Role of Health Insurance Institute in Decentralization Process Defining Planning, Management and Ownership of Primary Health Care Services  Defining the Roles and Functions of Local Government in Public Health

Social Protection Main social safety net programs: Cash assistance Pensions Social care services

CASH ASSISTANCE: Structure Means-tested Nationally funded by conditional grants Locally administered Designed to accomplish nationally specified objectives

CASH ASSISTANCE: Performance Targeting less effective than it should be Reason: No effective accountability process to check if local allocation of funds matches national criteria

CASH ASSISTANCE: Policy Options Introduce new evaluation and compliance processes Tension with new decentralization policy Devolve responsibility for goal-setting as well as for program administration No longer a national anti-poverty program     

PENSIONS A Complication Pensions might play as large a safety-net role as cash assistance in rural areas. But administered at national level.      Not targeted by income level.

HOLDING ALL PLAYERS ACCOUNTABLE Using acceptable process for assigning expenditure responsibilities? Clear understanding of assignments by all levels of government and among citizens? Responsibilities and resources fiscally aligned? (empirical studies to estimate operating costs) Published performance audits (e.g., PETS): Who got the money What did they do with it? How do resources vary between service delivery areas? Report cards on dimensions of service delivery hard to observe (e.g., learning outcomes)