1 / 23

Sustainable Decentralization in Croatia: C ross Cutting Issues

Sustainable Decentralization in Croatia: C ross Cutting Issues. The World Bank. Introduction (Comparative Size of Local Governments). Introduction (the administrative structure). Introduction II (fragmented local administrative units). Introduction II (fragmented local administrative units).

callie-reynolds
Download Presentation

Sustainable Decentralization in Croatia: C ross Cutting Issues

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Sustainable Decentralization in Croatia:Cross Cutting Issues The World Bank

  2. Introduction(Comparative Size of Local Governments)

  3. Introduction(the administrative structure)

  4. Introduction II(fragmented local administrative units)

  5. Introduction II(fragmented local administrative units)

  6. Introduction(Change in the number of LG units in selected EU countries)

  7. Introduction III(Structure of local revenue)

  8. Croatia: allocation of shared taxes

  9. Croatian Decentralization(Cross Cutting Issues) I —Achievements since 2001 II —Main Current Challenges III—The ways ahead: strategic directions IV—Building Blocks for Policies and Inst. Reforms: • Definition of responsibilities, and the legal and administrative frameworks • Intergovernmental fiscal relations and incentives to perform • Capacity building, accountability and fiduciary management

  10. I—Achievements Towards Decentralized Administrative Structure in Croatia The achievements: • Major decentralization push in 2001 (education, health, social assistance) • Legal framework broadly in line with LG European Charter • Local surtax piggybacking the national shared PIT • Allocation of shared PIT according to residence of taxpayer • Assignment of responsibilities according to delivery capacity • Establishment of a consultative “Decentralization Commission” at the State Administration Central Office (2004) Main message: The decentralization process in Croatia is neither complete nor sustainable yet, and important challenges on IFR have to be resolved for an efficient and effective public service delivery.

  11. II—The Main Challenges on: • Legal framework • Administrative structure • Functional responsibilities and competences • Revenue Assignment • Fiscal imbalances and the transfer system • Access to borrowing, indebtedness, and debt management • Autonomy, transparency and the accountability framework

  12. Challenges on the legal framework • Overly complex and still incomplete • Inadequate implementation

  13. Challenges on the Administrative Structure • Fragmented administrative structure and uneven capacity • Dual subordination of SNG executive authorities • Inadequate “supervisory” and “conflict resolution” mechanisms • Unregulated SNG civil service • Weak intergovernmental coordination and cooperation

  14. Challenges on Functional Responsibilities and Competences • Unclear definition of responsibilities and inadequate incentives • Inefficient expenditure allocation • Inadequate criteria for setting minimum service delivery standards

  15. Challenges on the Revenue Assignment • Inadequate revenue autonomy • Ineffective non-tax revenue and real estate taxation • Inequitable profit tax sharing mechanism • Considerable disparities in revenue capacity

  16. Challenges on Fiscal Imbalances and the Transfer System • Unpredictable transfer system • Complex and ineffective central “controls” • Limited scope and perverse incentives of the equalization transfer system • Lack of transparency on capital investment transfers

  17. Challenges on the Access to Borrowing, Indebtedness, and Debt Management • Majority of SNG hardly are creditworthy, but high indebtedness on account of contingent liabilities, arrears, and off-budget operations • Underdeveloped municipal capital market • Unsystematic and unreliable SNG debt management

  18. Challenges on Autonomy, Transparency and the Accountability Framework • Autonomy and transparency are low • Fiscal reporting system unreliable • Lack of monitoring system for public service delivery • Weak citizen participation and vulnerable accountability framework

  19. III—Ways Ahead A - Strategic Directions • Completion of reforms initiated in 2001, by specifying responsibilities, enhancing local decision-making, and improving accountability B - Principles underpinning the strategy • Commensurate resource to follow functional decentralization • Local authorities empowered by incentives (and sanctions) to perform, and made accountable to citizens • IGF relations be predictable, promote hard budget constraints, and encourage effective and efficient service delivery C - Fundamental Institutional Arrangements • “Decentralization and Local Governance Strategy” • A standing “Inter-Minist. Steering Committee on Local Governance” • A permanent “Technical Secretariat” on decentralization

  20. IV—Policy & Inst. Reforms-Building Block 1:(Definition of responsibilities, legal and administrative framework) a. Assigning functional responsibilities • clarifying specific responsibilities and authority to perform • establishing proper incentives to increase efficiency • setting up service standards based on outcome/output & measurable perform. criteria b. Rationalizing the legal framework • streamlining and consolidating regulations • drafting secondary legislation • stabilizing intergovernmental fiscal relations c. Enhancing the administrative structure • fixing up supervision and conflict resolution mechanisms • eliminating dual-subordination of local executive authorities • regulating the status of SNG civil servants and employees • addressing inefficiencies from the fragmented SNG administrative structure

  21. IV—Policy & Inst. Reforms-Building Block 2:(Intergovernmental fiscal relations & incentives to perform) a.Improving revenue autonomy • discontinuing profit tax sharing on a derivation basis • streamlining local non-tax revenue legislation • adopting a well-designed property tax as a local tax • Mitigating fiscal imbalances • eliminating bureaucratic rigidities & empower local authority • increasing transparency and efficiency on capital grants • broadening scope of equalization grants • Accessing capital markets responsibly • strengthening debt management and monitoring systems • developing institut. framework and strengthening prudential rules • enhancing regulation for SNG to access borrowing • Improving conditions for absorption of EU funds • encouraging municipal capital market (Laws: Bankruptcy, Fiscal Responsibility) • rationalizing the fragmented administrative units

  22. IV—Policy & Inst. Reforms-Building Block 3:(Capacity building, accountability and fiduciary management) a. Promoting capacity building • encouraging on-the-job training in tandem with decentralization • adopting a uniform national training strategy for SNG b. Establishing a consistent accountability framework • eliminating unfunded mandates and ensuring macroeconomic consistency (through hard budget constraints) • strengthening report and evaluation systems (incl. internal and external audit) • promoting bottom up pressure mechanisms c. Monitoring the decentralization process • enhancing Government capacity on collecting, evaluating and disseminating SNG key performance indicators.

  23. Thank You The World Bank

More Related