(De)centralization in Central and Eastern Europe under examination

A review of (de)centralization experiences in Central and Eastern Europe

To centralize, or to decentralize, that is the question. But is it really? Do we not already know the answer? The less central government in everyday matters, the better, right? The more power is given to local authorities, the faster things get done, correct? The only problem is that not everyone feels the same way. What is the perfect balance between the two, if the latter cannot be fully achieved?

Through the ages, European states have had various ideas about to what extent their domains shall be governed via a central authority. The more recent push for decentralization in all aspects of governance – from fiscal policy, to administration – appears to be a perfect manifestation of the highly attractive and appealing concept of subsidiarity.

The same rule applies not only to individual states, but also to the make-up of the European Union itself. After all, as an institution it is governed chiefly from the center, yet aspiring to be perceived as a federation, encouraging member states to take responsibility for their own actions, while at the same time setting the agenda for further development from Brussels (or Strasbourg). These and other paradoxes are embedded in the constant struggle between the two ideas, thus making the search for the ever so elusive golden means a means of tug-of-war negotiations between the proponents of centralization and advocates of decentralization.

In 2018, the 4liberty.eu Review—a platform supported by the German Friedrich Naumann Foundation—investigated a number of national perspectives regarding (de)centralization from Central and Eastern Europe, including experiences from Hungary, Ukraine, Bulgaria, Poland, the Czech Republic, Slovenia, Estonia and Bosnia and Herzegovina. The full articles are available through the links below.

No Freedom Allowed: Consolidation of Power in Hungary through Centralization (Mate Hajba)
Centralization, decentralization in Hungary. How to best approach the subject? How best to describe a country, which at the moment has no other long-term goal other than the consolidation and retention of power for the governing Fidesz party?

Fiscal Decentralization in Ukraine: Is It Run Smoothly? (Oleksandra Betliy)
The governance system at the local level in Ukraine for many years has had built-in conflict as it does not clearly define the responsibilities of elected local authorities and the local administrations, which are a part of the executive branch of power.

Elusive Road to Fiscal Decentralization in Bulgaria (Yavor Alexiev)
Fiscal decentralization is often viewed as a niche issue that mostly concerns administrative and regional development policies. However, it has broader social and economic implications, which are often overlooked, especially in countries with a heavily centralized government structure such as Bulgaria.

Centralization of Taxes, Decentralization of Competences: Is There a Way Out for the Local Government in Poland? (Marek Szolc)
Creation of functioning local government in 1990 after a long period of centralized governance during the communist regime is considered to be a major achievement of the democratic transformation which took place after 1989.

State Decentralization in Poland Has Been Successful, but There Is Still Room for Improvement (Aleksander Laszek and Rafal Trzeciakowski)
Decentralization in Poland was implemented in two stages – in 1990 and in 1999. The early reforms passed down central government tasks as well as some revenue-raising authority, giving it limited autonomy regarding real estate taxes, local fees, and other minor taxes.

Regional and Local Self-Governance: How Decentralization Developed in the Czech Republic (Krystof Krulis)
In the 1990s, the Czech Republic undertook a process of gradual transformation that resulted in the development of institutions of a liberal democratic state and economy based on market principles. An essential part of this process consisted in recreation of truly decentralized corporations of public law.

Planning for Shrinkage? Battle Between the Slovenian State and the Municipalities (Simona Kukovic)
Slovenia is one of the most centralized countries in the European Union with a one-tier local government system. While the country ratified the European Charter on Local Government in 1996, the charter was never fully implemented.

Local Government Reform in Estonia (Arto Aas)
Estonia became a rapidly developing, open, and Western-minded Nordic country. The e-government model and the digital society of Estonia are also an example for many developed countries in the West nowadays.

The Curious Case of (De)Centralization in Bosnia and Herzegovina (Admir Čavalić, pp 96-113)
Bosnia and Herzegovina is an exceptional case for liberal debate over decentralization. The political and legal order created by the international community in Dayton, Ohio (1995) resulted in a country divided into two parts, with one district. Half of the country, called the entity of Republika Srpska, is extremely centralized with only a small percent of local (municipality) political power. The other half, the entity of the Federation of Bosnia and Herzegovina, is extremely decentralized and consists of ten cantons with ten cantonal prime ministers and more than one hundred cantonal ministers.