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Drivers of Decentralisation Reform

There were additional external pressures from international financial organisations, such as the IMF with which Macedonia had arranged assistance packages, to reform the large, centralised and inefficient administration.6 By the end of the decade, among other reforms in the public sector, with the 1999 Public Administration Reform Strategy, the government was also considering decentralisation.7 The strategy was being implemented slowly, so it is difficult to judge how successful decentralisation would have been without the Ohrid Framework Agreement (OFA) provisions explicitly calling for decentralisation. Nonetheless, an awareness of the need to decentralise political power was growing among the political leadership, as the early resistance against it had subsided in view of the need for greater efficiency of the public sector.

In 2001, when the terms of the OFA were being negotiated, decentralisation was one of the major issues discussed. Decentralisation came as a substitute for territorial autonomy demands by the Albanian minority, since the Macedonian side was strongly opposed to any federal solutions or solutions involving territorial autonomy for the predominantly Albanian north-west parts of Macedonia. The attitudes of ethnic Macedonian political elites were still affected by the failure of the Yugoslav federation, where federalism was developed on the ethnic principle, discouraging them from pursuing a similar course in dealing with ethnic minorities in Macedonia. Federalism was seen as the first step towards secession, therefore one of the basic principles of the OFA denounces federalism, claiming 'there are no territorial solutions to ethnic problems'.8 This meant that decentralisation was

5 Florian Bieber, 'Power-sharing in Macedonia', in Power-sharing and OFA Implementation (Skopje: FES, 2008).

6 International Monetary Fund, 'Former Yugoslav Republic of Macedonia – Enhanced Structural Adjustment Facility Medium-Term Economic and Financial Policy Framework Paper, 1998–2000', 1997. Available at:

htm (accessed 20 November 2010).

7 Government of Republic of Macedonia, Strategy for Reform of the Public Administration, May, 1999. Available at: RJA_mk.pdf (accessed 20 November 2010).

8 Basic Principles, Framework Agreement, Ohrid, 13 August, 2001. Available at: (accessed 20 November 2010). the agreed instrument which would allow greater participation, access to political power and resources, and finally a form of self-government for Albanians in Macedonia. As a high-ranking DUI member described it: 'decentralisation has been the mechanism chosen to achieve what federalisation promises'.9 This statement summarises the feelings and expectations that Albanians had from decentralisation. After 2001, when decentralisation became one of the top priorities for the government, Macedonian and Albanian political elites had divergent hopes and expectations from decentralisation; Macedonians hoped it would make the state more efficient but feared it would lead to federalisation and secession, while Albanians hoped that decentralisation would allow self-government and access to resources similar to those of federal states.

Decentralisation reform was anchored in two major pieces of legislation, which restructured the distribution of political and administrative authority between the central and local levels of government. The Law on local selfgovernment increased the competencies of local government units and specified the institutional, legal, and financial tools at their disposal to pursue the new set of responsibilities. The Law on territorial organisation of municipalities re-drew the municipal map of Macedonia, cutting the number of municipalities from 123 to 86, in view of creating local government units capable of performing the newly devolved responsibilities. Adopted between 2002 and 2004, these two laws contain the core of post-conflict decentralisation reforms. Their negotiation and adoption witnessed major contestation within and across ethnic lines, as elaborated in the next section. The second case refers to an initiative to increase the funding sources for municipal budgets in 2007 and 2009. Several years after the initial decentralisation reforms were implemented, this case traces the changes in political elites' attitudes and approaches towards decentralisation, moving away from ethnically charged rhetoric towards more technical discussions over the merits of the legislative proposal.

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