Fiscal decentralization: success or failure in case study Macedonia

Starting from the 90 - ies of the last century, Macedonia was engaged in a
complex process of transition and that means implementing a number of crucial
reforms, including
establishment and strengthening of local democratic institutions.
In this context, in 1995 lawmakers in the Assembly
of Macedonia adopted the Law on Local Government, with which were determined
public responsibilities of the units of the local government.
Shortly afterwards, was adopted the Law on Territorial Division of the Republic of
Macedonia and the laws that regulate public utilities and so the normative aspect
of the legal framework for local government was complete. One of the main parts
in the decentralization process was fiscal decentralization.
In this paper will be explain and analyze the concept and the processes of fiscal
decentralization in Republic of Macedonia. The concept of fiscal decentralization
involves the establishment of funding mechanism for municipalities that is
transparent and based on
objective criteria and standards. With the transfer of responsibilities
on Municipalities parallel is done and transfer of funds to carry out this
responsibility by the Budget of the Republic of Macedonia and the budgets of the
units.
According ZELS, fiscal decentralization is implemented in two phases,
based on several principles.
The process of fiscal decentralization is important for the economic benefits of the
units of the local government, and for the whole national economy.
In this paper are shown empirical and statistical data for progress from the date
of starting of the process of fiscal decentralization in Macedonia.
General, we can conclude that from the last three years process of
decentralization progressed with a very slow pace.
However, the progress in 2010 and points of improvement detected in this report
provide solid basis for further properly creating and directing the policies of
decentralization in function of encouraging and intensified implementation and it
is very important to faster the processes of fiscal decentralization.
From this study also we can conclude several negative points which make slower
the fiscal decentralization as: unqualified human resources, less financially
strongest of the unit. At this point upraises several recommendations as: need of
regional connection of smaller and less economic powerful municipalities and
redistribution of their public services, need of development of strategy for
providing conditions in function of balanced regional economic development of
smaller municipalities, which are ignored on behalf of developing large
municipalities.
Key words: local government, fiscal decentralization, process, moving,
recommendations.