Fiscal Decentralization in the Western Balkan Countries, The Case of the Republic of Macedonia

Abstract

The prolonged economic and political transition in the Western Balkan countries has left significant negative consequences on the functionality of the economic system. The enthusiasm seen from policymakers and citizens that the implementation of the economic liberalization and stabilization coupled with a lot of structural reforms would create functioning market economy and functioning institutions were not realized in a considerable level even after two decades of transition. Structural reforms essentially aimed to create functioning central and local institutions which would help the economy to achieve high economy rates whereas the citizens will get help in coping with the high cost of the transition in the function of enduring the increasing unemployment and poverty. In order for these economic, political and social objectives to be realized they were implemented among other reforms and reforms in the functioning of local democracy and growth of local financial autonomy. The paper aims to give an objective answer regarding the real level of fiscal decentralization and to recommend new ideas for advancing this process in perspective based on EU's best practices through a comparative approach of the level of fiscal decentralization in Macedonia compared to European Union countries and Western Balkan. DOI: 10.5901/mjss.2014.v5n13p347