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Fiscal Decentralization In Albania: Effects Of Territorial And Administrative Reform

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  • Mariola KAPIDANI

    () (University of Tirana, Faculty of Economy, Department of Finance, Albania)

Abstract

The principle of decentralization is a fundamental principle for the establishment and operation of local government. It refers to the process of redistributing the authority and responsibility for certain functions from central government to local government units. In many countries, particularly in developing countries, fiscal decentralization and local governance issues are addressed as highly important to the economic development. According to Stigler (1957), fiscal decentralization brings government closer to the people and a representative government works best when it is closer to the people. Albania is still undergoing the process of decentralization in all aspects: political, economic, fiscal and administrative. Decentralization process is essential to sustainable economic growth and efficient allocation of resources to meet the needs of citizens. Albania has a fragmented system of local government with a very large number of local government units that have neither sufficient fiscal or human capacity to provide public services at a reasonable level (World Bank). However, recent administrative and territorial reform is expected to have a significant impact in many issues related to local autonomy and revenue management. This paper is focused on the progress of fiscal decentralization process in Albania, stating key issues and ongoing challenges for an improved system. The purpose of this study is to analyze the effects of recent territorial reform, identifying problems and opportunities to be addressed in the future.

Suggested Citation

  • Mariola KAPIDANI, 2015. "Fiscal Decentralization In Albania: Effects Of Territorial And Administrative Reform," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 14(3), pages 29-36.
  • Handle: RePEc:pts:journl:y:2015:i:3:p:29-36
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    More about this item

    Keywords

    Fiscal decentralization; Local autonomy; Local revenues; Territorial reform.;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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