Local governments lack resources and capacity
Recommendations of international organizations to Bulgaria more often focus on problems at the national level - from corruption through the judiciary to the quality of lawmaking. A newly published analysis by the Organization for Economic Co-operation and Development (OECD) instead focuses on the specifics of local government, the challenges of decentralization and the growing inequality between different parts of the country and the capital.
In the first place, the analysis posits that Bulgaria has achieved significant progress in its socioeconomic development in the three decades after the fall of the socialist regime. As expected, this also comes with the transformation of the over centralized institutions to the multi-level system of government and decision-making. Nonetheless, OECD analysts denote that despite the shortening distance with the economic development of the EU, the country still trails behind, and continues to struggle with significant issues such as income inequality and poverty.
Among the worrying tendencies set out in the report, are the deepening socioeconomic differences among the different parts of the country relative to the average European level after Bulgaria’s entry into the EU, despite the big investment in regional development, financed by the cohesion funds. The analysis describes the case of Bulgaria as an “island of prosperity”, in which there is a small well-developed territory and a backward periphery - the big developmental differences between the capital and the other regions. This also applies to the entire southwestern planning region, which concentrates almost 50% of the national GDP, with a tendency for the share to grow; the same applies to Sofia (capital). The authors denote the development of Plovdiv, Varna and Burgas as alternative economic centres, balancing out the capital, but beyond them the rest of the country remains behind in terms of development.
As a whole, the report contends that regional development has achieved “mixed success”. According to the authors, the country put effort into the adoption of a more integrated approach to regional policy, but this effort was hampered on the one hand by the economic problems following the 2008 crisis, and on the other - by the deepening social and demographic problems of a number of regions. Another problem which stands out is the centralized (“top-down”) approach towards the development of regional policy, which often excludes the regional government from the process.
The analysis accentuates the condition that despite the programs and strategies for decentralization, Bulgaria remains strongly centralized. The municipalities - regarded as the only level of real decentralization - realize only 20% of the public expenses (or 7% of Bulgarian GDP). This contrasts sharply with the EU average of 34% (15% of GDP). Fiscal decentralization is considered the weakest link of the decentralization process, although deficits in the political and administrative decentralization can still be observed.
Low fiscal autonomy and restricted municipal budgets create a critical challenge to local governments. They hamper the delivery of quality services, investment and their independent development. Especially considering the fact that municipal spending is defined largely by the central government. Furthermore, the analysis perceives problems in the administrative capacity and the democratic process on the local level.
On a general level, the OECD authors recommend some steps for the achievement of real decentralization, better regional development and improvement in the activity of the local government:
● Transitioning to an integrated local-level approach to regional politics. According to the analysis, regional policy should take into account the particularities of the different districts in the country, and focus on the decision-making process of local governments. An emphasis is put on the quality of the decision-making process, the transparency and the coordination between the local governments.
● Improvement of the municipal decentralization: greater capacity and resources and better municipal governance. The authors indicate a necessity to reform the current goals of municipal decentralization and the measures for their achievement. Significant are also the improvement of the coordination mechanisms between the different governmental levels, more effective administrative decentralization, an increase in the fiscal decentralization and responsibility of the local government.
● Reform of the local government with the goal of increasing the capacity and the achievement of the regional aims. The report regards as necessary the clarification of the roles of the different levels of local government. According to the authors, the districts should operate as deconcentrated territorial administrations, whose role is vertical and horizontal integration and control over the municipalities, but not the direct management of regional development.
A big part of the OECR report’s conclusions coincide with the ones made by the IME within the year-long work of the Institute in the sphere of local government and regional development. More for the current recommendations of the IME for real decentralization can be found on the specialized website for fiscal decentralization dvenasto.bg
