Fiscal Decentralization- Part of the Fundamental Reform of Public Administration in Albania

Fiscal Decentralization- Part of the Fundamental Reform of Public Administration in Albania

The continuing centralized nature of public administration in Albania could be attributed to a transition period, but since this phenomenon is not unique to Albania, it was necessary searching for underlying reasons for this system of regulation, organization, and financing of public affairs and administration.

It is generally accepted that the provision of  NFT  public services to citizens cannot be left entirely to the market. In fact, direct government control over public administration with regard to public services is more or less inevitable. The issue is who should provide for these public services–state administration or self-governing bodies–and at what level–local, regional, or central.
The present situation in Albania is that the central government directly, or by means of district and regional offices, provides in the end of 2006 for approximately 70 percent of all public services to citizens. Funding decisions about these services are made solely at the central level; the district and regional offices have no significant decision making power or influence regarding funding amounts or destinations. Furthermore, regional self-governing bodies are not yet operational, and local self-governing bodies are very limited in their ability to make the necessary policy and budget decisions on major public services such as education, social care, health services, culture, and transportation.

An important precondition for the rationalization of public administration is speedy completion of the property transformation process and transfer of the state’s responsibilities for the majority of economic activities to the private sector, and partly to the municipalities, as follows:

o forestry: the state + transfer to municipal ownership,

o agriculture: privatization + transfer to municipal ownership,

o transportation: the state + regional self-governing bodies,

o health care: the state + municipal and regional self-governing bodies,

o education: the state + municipal and regional self-governing bodies,

o culture: self-government + the state,

o recreation: the state + self-government,

o telecommunications: privatization + state participation,

o road network: local and regional self-governing bodies + the state

o management of water supplies: local self-governing bodies + the state.

The aim is:

o to decrease the degree of provision of private property by the public sector,

o to limit interference of public administration with private properties,

o to decrease the operating costs of state administrative bodies, and

o to determine the powers and competencies of state administration and self-governing bodies at their respective levels.

1. Reforming Relations between the State and Local Self-Governing Bodies

1.1 The Role of the State in Public Administration

Obviously, supporters of collectivist doctrines and liberal principles will have a different view of the role of the state in public administration. But the recommendations for reform of public administration in Albania takes decentralization into account and anticipates a significant decrease in the role of state institutions in the management of public affairs as compared with the present situation and a transfer of most public service responsibilities to regional self-governing bodies.

The state’s role in the new structure of public administration should be limited to supporting, controlling, and organizing tasks with respect to the following:

o securing the country’s external independence (in terms of foreign policy and national defense, including civil protection at all levels);

o maintaining law and order (e.g., selected areas of security, education, trade, water supply, medical and hygienic supervision);

o protecting civil rights and freedom;

o social legislation; and

o creating conditions for a healthy economy (currency policy, system of insurance, a tax policy that allows for improve of administration, financial administration, economic policy, participation in regional policy, energy policy, and national transportation policy).

These tasks shall be performed by central bodies of the state and their regional offices (i.e., local state administration institutions). All remaining tasks should be the responsibility of local and regional self-governing bodies.

1.2 The Role of Self-Governing Bodies in Public Administration
While the execution of state power is territorially defined by the frontiers of the state, self-governing bodies regulate public responsibilities within the framework of their territory and competence in compliance with the constitution and the law. As the legislator, the state continually tries, by means of law, to provide limitations for self-governing bodies; therefore, it is necessary to ensure the status of self-governing bodies through the following types of provisions:

o Institutional. Ensure that citizens are represented through free elections at the state, regional, and municipal levels. Regional and municipal representatives must have the right to regulate all appropriate issues within the framework of the law and consistent with their responsibility. City and municipal associations must take an active part in representing their constituents to the government, parliament, and other organizations and associations to ensure that the constitutional rule of the republic conforms to democratic rights and rules. Self-government, as an organizational form, is largely exempt from such control except where the court is entitled to arbitrate on a case of impingement upon the law. The sovereign rights of self-governing bodies are personal sovereignty, sovereignty of the organization, sovereignty in planning, financial sovereignty, regulatory sovereignty, and taxation sovereignty with regard to local and regional taxes.

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