Macedonia: Local Government Efficiency and Ethnic Fragmentation

Abstract

Since its independence in 1991, Macedonia has experienced three distinct periods of decentralisation. This chapter presents the process of territorial organisation in Macedonia during these three periods, as well as the trends and developments of the revenues, expenditures, and the horizontal equalisation design. The third period, beginning in 2005, gained momentum following the post-Ohrid Framework Agreement (OFA) new Constitution and was marked by an ethno-political impact on the efficiency of public service delivery at the local government level. The analysis shows that the expensive preferential policies adopted during decentralisation in post-OFA Macedonia might not be matched with the level of development of the social capital in the country.