1. DECENTRALIZATION IN ALBANIA

2. 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

3. 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

4. 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

5. 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

6. 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

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

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

9. 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

10. 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     

11. 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.

12. 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)