Kosovo has made progress in local governance over the last decade. For instance, the political leadership at municipal level is more citizen-oriented and has a clearer vision for its development. However, several issues remain. Municipal financing is inadequate, local democratic practices and culture are underdeveloped and municipal service provision is insufficient. The outbreak of Covid-19 pandemic is confronting municipalities with additional short and longer-term challenges.

The protracted political polarisation leading to frequent changes of national government and low efficiency of the parliament over the last three years has hindered the advancement of envisaged reforms, including those pertaining to municipal funding. The mandate of the newly elected municipal leaderships (elections in Fall 2021) will be mostly parallel (3 out of 4 years) to that of the recently elected central level government, thus potentially creating a period of political stability.  

Municipalities improve their democratic governance.

Theory of change:

Greater citizen engagement, a stronger oversight and a policy framework that assures sustainable and credible rule-based financing of municipalities, including the Municipal Performance Grant (MPG), will provide increased incentives and pressure to improve municipal governance and management. This is expected to result in an improved local democratic governance, better services and citizens’ satisfaction.   

• All 38 municipalities of Kosovo (direct beneficiaries), covering the entire population of over 1.8 million (indirect beneficiaries). Of 38 municipalities, 10 are Serb-majority populated, including four in the North of Kosovo, which are less integrated in the Kosovo systems compared to other municipalities.
• The Ministry of Local Government Administration (MLGA), the Ministry of Finance, Labour and Transfers (MLFT) and the Association of Kosovo Municipalities (AKM).  

1. The Municipal Performance Grant is credible, effective and fully institutionalised.
2. Local oversight and citizen engagement mechanisms are functional.
3. The policy framework is more conducive to rule-based financing of municipalities.
4. The Association of Kosovar Municipalities is effective in advocating on behalf of municipalities and in serving the needs of member municipalities.

Erwartete Resultate:  

• Sufficient capacity is developed in MLGA and municipalities to fully manage performance systems and processes.
• MPG is open to public scrutiny.
• Strengthened capacities of municipalities for citizen engagement.
• Strengthened capacities for oversight and monitoring of municipalities (by relevant municipal committees, local media, etc.).
• Support is provided to draft, implement, and monitor the policy framework for rule-based financing.
• AKM successfully implements its Strategic Plan 2021-2025. 

Resultate von früheren Phasen:  

Experience from two previous DEMOS phases shows that introducing a mechanism and adequate incentives within the country system for improved municipal performance holds promising potential for achieving relevant, effective and sustainable systemic change. During DEMOS II, the MPG mechanism was further developed and up-scaled for a country-wide outreach (all 38 municipalities). Four MPG cycles were successfully implemented and the average performance scores of municipalities have improved. The Ministry of Local Governance Administration (MLGA) took over the ownership of MPG and is increasingly handling its management with support by DEMOS.

Results of phase II include: i) municipalities have implemented capital investment projects which have beneficial effects for over 600,000 citizens in 32 municipalities in Kosovo (50% women and 20% minority communities); ii) 35 municipalities were able to increase property tax collection and the rates are higher among high performing municipalities;
iii) more than 70% of surveyed citizens consider that municipal service delivery has improved in the last three years; iv) AKM has effectively represented municipal interests in dialogue with the central level.

• Helvetas Swiss Intercooperation (HSI) (phase I awarded through open tender) for outcomes 1, 2 & 3.
• Association of Kosovar Municipalities (AKM) (core contribution) related to outcome 4.

• Democratic Society Promotion (DSP);
• SAEK (anticorruption programme);
• SDC Health projects and SECO financed IFC project operating at municipal level;
• Projects: USAID/KSCA, GIZ/CER, etc.