Municipal Development in Eastern Serbia


Country/region Topic Period Budget
Serbia
Governance
nothemedefined
Decentralisation
Domestic revenue mobilisation
Democratic participation and civil society
01.05.2021 - 31.07.2025
CHF  5’300’000
Background

Serbia is witnessing democratic backsliding, which is further accentuated by the Covid pandemic. Yet, there is still space to promote democratic practice from the bottom up at the local level. Despite an improved legal framework for citizen participation, i.e. for decision-making on local budgets, LGs do not yet routinely consult citizens or when they do, the quality of the process is often poor.

Meanwhile, LGs have limited fiscal autonomy, with property tax being one of the few own source revenues they can spend in line with their own (and citizens’) priorities. While there is a strong interest from LGs to increase their revenues through property tax collection they currently don’t have the capacity to complete the property registration process. Given Serbia’s electoral (closed-party list) and income tax system (direct deduction from the salary), the accountability link between LGs and citizens is rather weak, with the locally collected and spent property tax being an important exception.

Objectives Local governments’ (LGs) financial autonomy and trust between citizens and LGs is strengthened through enhanced democratic practice and citizen-oriented services.
Target groups The primary target group of the intervention are 100 Serbian LGs (out of 170). The secondary group are informal citizens’ movements, community councils (Mesna Zajednica-MZs) and local CSOs and media.
Medium-term outcomes

Outcome 1: Local governments ensure inclusive local participation of citizens/taxpayers in decision-making to provide improved demand-based service delivery.

Outcome 2: Local governments collect and manage property tax and other revenues administrated by local governments more transparently and efficiently to increase and sustainably secure own source revenues.

Outcome 3: Supported legal and policy reforms lead to sustainable, efficient and transparent local democratic processes and local own source revenues.

Results

Expected results:  

1) 44 supported LGs improve the quality of inclusive citizen participation practices in own source revenue spending;

2) 100 LGs institutionalise citizen participation mechanisms and regularly involve citizens in decision-making;

3) The registration of taxable residential properties in 44 LGs increased by 15% on average by the end of the programme;

4) Legal and policy reforms adopted by national decision-makers trigger systemic quality changes in the domain of participation or taxation.


Results from previous phases:  

1) Capacity building to LGs and performancebased incentives resulted in a permanent increase of property tax revenues by 20% in 44 supported LGs, or 5.15 million CHF in 3 years.

2) The newly introduced IT system by MED 2 for property tax collection managed by the government, allowed for greater transparency of property ownership and due taxes. With the new system, natural and legal persons can pay and track their property tax electronically.

3) Partner LGs (41/44) applied citizen participation mechanisms by adopting local good governance action plans and citizens were able to reap direct benefits from participating in local decision-making. They held more than 100 consultations with citizens (over 1000 men and 1000 women) to identify local priority projects and revised rural development, health (incl. reproductive health), social inclusion, gender equality and employment policies for both women and men. Nine LGs continued to budget citizens’ participation in the year after the support has ceased.


Directorate/federal office responsible SDC
Credit area Swiss cooperation with Eastern Europe
Project partners Contract partner
Private sector
Swiss Non-profit Organisation
  • HELVETAS Swiss Intercooperation
  • Foreign private sector North


Other partners

Swiss Helvetas Intercooperation

Local Governments as sub-contracting partners

Coordination with other projects and actors The programme will closely coordinate with UNDP on local assemblies; ACT on civil society and participation; SECO RELOF on participatory budgeting and SwissPRO on the implementation of good governance principles.
Budget Current phase Swiss budget CHF    5’300’000 Swiss disbursement to date CHF    4’445’109
Project phases Phase 3 01.05.2021 - 31.07.2025   (Current phase) Phase 2 01.05.2017 - 31.12.2021   (Completed) Phase 1 15.06.2012 - 31.03.2017   (Completed)