Stimulating Municipalities in Albania, Kosovo

The two projects of Swiss Agency for Development and Cooperation, respectively DEMOS in Kosovo (Decentralisation and Municipal Support) and BtF, “Bashki te Forta” (Strong Municipalities) in Albania, recently held a joint workshop where the participants discussed and compared their approaches in helping local governments.
In this interview, Ertan Munoglu, project manager of DEMOS, answers a few questions regarding the current situation in this sector, on both countries.

-Two SDC Projects DEMOS from Kosovo and BtF from Albania implemented from Helvetas Swiss Inter-cooperation completed a joint workshop with the participation of Albanian experts and governance representatives here in Albania, during which it was observed that although the aim was the same (change behaviour through use of performance systems), two countries have adopted different approaches. It is stated that “the stick and carrot” system for reform and development is a preferred technique used by EU institutions for non-EU countries like Albania and Kosovo. Which one do you think works best in relation to your experience?
-We are aware that our countries, but also countries in the Western Balkans in general, are not at the desired level of democratic governance and good public management. So our objectives are to support local institutions to improve performance and provide better services to citizens.
‘Carrot and stick’ is an approach used for a long time in different contexts, but always with the objective to motivate parties involved to move in a certain direction. The results of this approach vary, and in the latest EU accessions it was seen that some countries ‘loosened up’ once becoming members of the EU. Some scholars argue that the focus should be on carrots rather than on sticks, and this is the approach we have chosen in Kosovo and Albania, namely working with incentives or ‘carrots’ in the EU jargon.
We learnt that Albania has already integrated performance elements in its primary legislation. It introduced what is known as ‘performance budgeting’, linking performance with financial resources. Application of performance budget system by local councils will improve accountability and transparency leading to better service delivery for citizens, without using any stick.
In Kosovo, performance management is only part of secondary legislation, and we are trying to upgrade it from the legal point of view in order to have highersustainability of the system. In addition, we established a financial incentive mechanism, offering grants to municipalities that perform better, which we hope will stimulate elected representatives and civil servants to improve their performance in public function. The focus is not on blaming and shaming, but rather on promoting good examples and progress and demonstrating that positive changes can be made if there is willingness to do so. A similar mechanism is thought to be introduced in Albania, after the performance budgeting system is consolidated. Such incentive mechanisms are not new, but they are usually applied to less developed countries.
In this light, our approach in the Western Balkans can be seen as an alternative method and as such very exciting for all of us involved.

-In general parlance performance is not used very much in both countries. Can you please elaborate on why are performance systems important to the citizen?

-Performance systems are used in various ways; however, their implementation leaves a lot to desire. This is most visible in public service where one can notice non-meritocratic recruitment and/or non-consequential performance appraisals.
In Kosovo the Ministry of Local Government Administration has developed a Performance Management System (PMS) for municipalities. This system is running for about 10 years and it was upgraded a few times to reflect the changes deriving from the legal framework, to make it a more robust system with regard to quality control, but also to respond to the needs of municipalities. The purpose of this system is to provide an overview of municipal annual performance, promote and incentivise the good work of municipalities, learn what was done well and what requires further improvement. The system measures municipal performance on a vast number of municipal responsibilities and a performance report is published annually by the Ministry. The report is used by different parts of society, like media, NGOs, etc, but also for policy making purposes. Citizens can access the reports easily and compare their own with other municipalities.
The financial incentive is put on selected indicators of the PMS, addressing processes that support democratic governance and good management of municipal affairs. This requires that municipalities are transparent and respond to citizen demands, that decisions are made in consultation with citizens, that there is accountability from the municipal executive to the legislative, etc.
Similarly, in Albania municipalities are working with communicationtools, such as performancebased citizen budgets, to better reach and include citizens. Such tools help implementation of legally foreseen performance instruments, contributing to a culture of law enforcement as a critical prerequisite for a democratic state.
This way, performance systems are important for citizens in two ways: i) they stimulate municipalities to improve their work, be more democratic and responsive to citizens; ii) incentives based on performance enable better service to citizens.

-What can we learn from you?

-Objectives of the system need to be very clear and communicated properly. The ultimate goal we want to achieve in both countries is change of behaviour of public officials as well as citizens. We are aware that it takes a long time for this to happen, therefore, communication should be continuous and very targeted to nudge people in the desired direction.
We learnt that for such approaches to work, results should be attainable and the system needs to be seen as fair by all parties, especially by municipalities and local councils. The rules of the game and quality assurance mechanisms ought to be established from the outset. Should any part of the system (for example criteria, results or any other rule of the game) change discretionally, the ‘carrot’ will become unattractive and thus irrelevant.
Lastly, the system should be owned by and engrained in the government systems. One should avoid building parallel systems which compete with each other.The data should derive from governmental systems rather than from a project, performance assessment, communication and other processes should be (co)managed with the responsible institutions both at local and national level.The relationship between performance and financial resource allocation seems to be strong and has proven in many countries to have contributed to better services for citizens, and as such it should be strengthened further.

-What is next for both projects?

-We were happy to dwell deeper into differences and commonalities of the systems in Kosovo and Albania. Kosovo has a bit longer experience in this matter, but we are both at very early stages of developing such systems. We learnt a lot from each other, but there is a huge potential to learn much more. We should exchange more often, together with our partners from the government side, and discuss new developments.
We are blessed to have such an opportunity where we can use each other also as a sounding board. We’ve already agreed to intensify relations between involved authorities on performance issues on both countries.We are talking about changing human behaviour in very complex systems, so sharing results and lessons is very important. We are both very interested to see what this alternative method proves in our contexts and hopefully be able to share positive changes with others in the region and beyond. / ADN

*DEMOS is a Swiss Development Cooperation project co-financed by Sweden and “Bashki te Forta” is an SDC Project. Both projects are implemented from Helvetas Swiss Inter-cooperation (HSI). In Albania Bashki t� Forta joins efforts to support municipalities with Local Finances Project of the State Secretariat for Economic Affairs. For more information, Www.bashkiteforta.al, and http://helvetas-ks.org.