LPSA Expert Working Group on Europe & Central Asia – Open Meeting – December 2023

December 13, 2023 (10:00 EST 15:00 GMT/ 16:00 CET/20:00 UZT)

LPSA’s Regional Working Group on Europe & Central Asia (ECA) Open Meeting took place on December 13, 2023, (10:00 EST/ 15:00 GMT/ 16:00 CET/ 20:00 UZT). The meeting was opened and moderated by Glen Wright, who serves as one of the co-chairs of the working group. The focus of the meeting was Municipal service provision in fragmented local government systems from Central-Eastern Europe.

Michal Placek (Czech Republic) introduced the book on Fiscal decentralization reforms, which examines the impact of fiscal decentralization reforms on local government efficiency in Central and Eastern European countries. He analyzed the technical efficiency of municipalities in relation to various fiscal factors (e.g. own source revenues, debt) and political variables.  Among the policy recommendations he emphasized, that New Public Management approach suggests merging municipalities for efficiency, but this is politically and geographically challenging, so alternative solutions have to be developed. He pointed out that proxy methods, digital tools for enhanced citizen participation, better municipal administration and cooperation between sectors are needed.

Tamas Szabo (Hungary) elaborated on the lack of capacity and inter-municipal cooperation in Hungarian villages and highlighted the decreasing mandatory competences since 2011. He argued that most municipalities rely on external financial support from the European Union and the Hungarian central government, making public service development difficult. The new Hungarian Act on Local Governments in 2012 enhanced inter-municipal coordination, focusing joint municipal offices and also using voluntary schemes on wellbeing issues, public utilities, economic development, and local housing policy. Highlighted the negative correlation between IMCs and economic conditions of the municipalities.

Jan Marusinec and Martin Valentovic (Slovakia) advocate for the central government’s effort to boost inter-municipal cooperation in Slovakia by implementing joint municipal offices. They specified that these offices share resources, support municipalities, and execute administrative tasks on behalf of the central government. Alternative solutions are under development as Integrated Shared Service Centers. Data centre of communities and towns have been built for municipalities, and Ministry of Finance has developed an integrated platform financial reporting system for municipalities, enabling direct data entry and automatic consolidation.

Daniel Klimovsky (Slovakia) provided valuable insights into the drivers and obstacles of inter-municipal cooperation in Slovakia from the perspective of local governments. The country is extremely fragmented, with numerous small municipalities and a high urban population concentration. He specified that inter-municipal cooperation and diversity of fiscal autonomy at the local level are needed, as municipalities are strong in terms of competences and powers, but most rely on state transfers. Larger municipalities can use their own sources of revenue, while smaller ones need more equalization funds.

All the discussions were followed by Q&A sessions. Gábor Péteri, who serves as one of the co-chairs of the working group, concluded the meeting by scheduling the next quarterly meeting. 

No.Agenda ItemContributorSlide Deck
1.Welcome & IntroductionGlen WrightN/A
2.Fiscal Decentralization & Efficiency: Small Municipalities in the Czech RepublicMichal PlacekView
3.Lack of Capacity & Inter-Municipal Cooperation Among Hungarian VillagesTamas SzaboView
4.Central Government Effort to Boost Inter-Municipal Cooperation in SlovakiaJan Marusinec
Martin Valentovic
5.Drivers & Obstacles of Inter-Municipal Cooperation in Slovakia: the Local Governments PerspectiveDaniel KlimovskyView
6.Q&A and Summary of MeetingGlen WrightN/A
7.Closing Remarks & Next StepsGabor PeteriN/A

Reminder: You can join any LPSA Expert Working Group free of cost and receive reminders and updates by opting-in to one or more working group as part of your LPSA Membership registration.