Challenges to Municipal Fiscal Autonomy in Macedonia

Abstract

This article assesses the impact of recent decentralizing reforms on the fiscal autonomy of Macedonian municipalities. It begins by considering how the short-term political calculations and intra-party dynamics of governing parties may have influenced both the design and implementation of fiscal decentralization. The article evaluates the revenue, expenditure, and contractual autonomy of Macedonian municipalities. It argues that the political-economic context within which fiscal decentralization has been conceived and implemented thus far has not been conducive to enhancing the fiscal autonomy of the municipalities. The research confirms that, while constitutionally guaranteed decentralization processes may be harder to reverse than others, it is not impossible. Advances in either administrative or political decentralization can be undermined by tightening controls over fiscal relations.