Aisling Lyon

i PREFACE AND ACKNOWLEDGEMENTS iii LIST OF TABLES ix LIST OF FIGURES xi ACRONYMS AND ABBREVIATIONS xii CHAPTER 1:1INTRODUCTION 1 Defining Decentralisation 3 Why Do Governments Decentralise? 7 Threats to Successful Decentralisation 10 Literature Review 14 Methodology 27 Structure of Thesis 37 CHAPTER 2:42BACKGROUND TO MUNICIPAL DECENTRALISATION IN THE REPUBLIC OF MACEDONIA 42 Introduction 42 Horizontal Inequalities and the Structural Causes of Ethnic Conflict 44 Horizontal Inequalities in the Republic of Macedonia, 1991 – 2001 47 A Nation under Threat: the State’s Response to Albanian Grievances ......... 69 The Institutional Design of Decentralisation within the Ohrid Framework Agreement 75 Decentralisation and its Ability to Address Horizontal Inequalities 82 Summary 85 CHAPTER 3:88DECENTRALISATION AND THE STRENGTHENING OF CONSENSUAL,88PARTICIPATORY LOCAL DEMOCRACY 88 Introduction 88 Decentralised Governance and Conflict Management 90 Decentralisation and the Creation of Local Tyra...

The decentralization process in the Republic of Macedonia has been widely regarded as a success story by regional and international actors alike. It is frequently considered a suitable non-territorial model of ethnic conflict management that can be replicated elsewhere. By increasing the number of competences administered at the municipal level, in addition to replicating the central government's system of consociational power-sharing locally, the reforms seek to provide local, culturally diverse communities with greater control over the management of their own affairs and resources. This paper will begin with a theoretical discussion of how municipal decentralization may offer an institutional solution for managing and preserving cultural diversity within unitary states. It will seek to position Macedonia's decentralization reforms within the ongoing theoretical debate between integrationists and accommodationists, and will offer some initial observations on how the reform&...

This article examines whether fiscal decentralisation in the former Yugoslav Republic of Macedonia between 2005 and 2012 has been achieved at the expense of economic and territorial cohesion. It examines the presence of longstanding socioeconomic disparities and rural under-development, before considering whether fiscal decentralisation has: facilitated a more equitable distribution of public resources; created the optimal conditions for expanding citizens’ access to basic services; and reduced socioeconomic disparities between urban and rural areas. The article argues that unless carefully designed and implemented, fiscal decentralisation reforms can have unintended consequences and may actually exacerbate socioeconomic disparities rather than reduce them.

This article examines whether devolving responsibility for the provision of public services such as education in the Former Yugoslav Republic of Macedonia can satisfy the demands of non-majority groups for greater autonomy over their own affairs. How education systems are designed and delivered is of particular importance to minority ethnic communities since education is crucial for reproducing (and re-creating) the identity of a group. Without the transmission of the aspects of their identity through education, non-majority cultures may disappear. The review begins with the principal arguments in favour of and against devolving responsibility for the provision of education to local communities. An assessment of the Macedonian education system prior to decentralisation follows, accompanied by a discussion of the decentralisation reforms introduced in 2005. Three key theoretical arguments will then be considered within the Macedonian context: (a) whether decentralisation facilitates the provision of heterogeneous local public services; (b) decentralisation’s ability to enhance participation and transparency in decision-making regarding the delivery of services; and (c) whether decentralisation ensures a more equitable and transparent distribution of public resources. The article argues that the decentralisation of primary and secondary education to the municipal level in Macedonia has enabled local communities to more effectively meet the diverse needs of citizens. Persistent challenges, unless adequately addressed, may however undermine the benefits of reform in the longer term.

This article examines whether decentralization in the Republic of Macedonia has contributed to widening effective political participation and strengthening democracy at the local level between 2005 and 2012. It begins by demonstrating the debate regarding political decentralization and its ability to mitigate ethnic conflict by facilitating the effective participation of national minorities in local institutions. An assessment of the largely consociational power-sharing mechanisms envisaged locally then determines whether decentralization has contributed to: improving the political representation of diverse groups in local decision-making processes; deepening local democracy by providing opportunities for residents to participate in local governance; and enhancing the transparency, accountability, and responsiveness of municipal governments. The opportunities Macedonian citizens have for participating directly in local decision-making processes are also evaluated. This article argues that whilst political decentralization has expanded the potential space available for citizens to participate in local governance, it has not guaranteed the participation of local communities, or that their participation is both equitable and effective. Advocates of decentralization have failed to sufficiently appreciate the extent to which the over-dominance of some political parties, which lack internal democracy, along with the pervasiveness of patronage-based politics, may undermine the reform’s potential benefits.

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.

Ten years on from signing the Ohrid Framework Agreement, is the Republic of Macedonia’s peace process, of which municipal decentralisation is a primary component, broadly benefitting all communities equally? To what extent is municipal decentralisation and minority protection mechanisms administered at the local level preserving Macedonian society’s multi-ethnic character, or has the country taken a step closer towards the development of a bi-national state? There were definitely ‘winners’ as a result of the Ohrid Framework Agreement, but were there also ‘losers’, and who are they? The decentralisation process in Macedonia has widely been regarded as a success story by regional and international actors alike. It is frequently considered a suitable model of ethnic conflict management that can be replicated in other regional contexts, such as for Serbs living in neighbouring Kosovo. Decentralisation sought to offer limited autonomy to Macedonia’s ethnic communities, in particular the ethnic Albanians. By increasing the number of competencies administered at the municipal level, the reforms aimed to provide local, culturally diverse communities greater control over the management of their own affairs. This paper seeks to apprise the minority rights protection mechanisms contained in the 2001 Ohrid Framework Agreement, particularly those at the municipal level, along with implementation of the wider of decentralisation reforms. The paper will also consider the claim that the protection mechanisms envisaged in Ohrid and the process of decentralisation to date has not benefitted all Macedonia’s ethnic communities equally. Instead, it has reinforced steps towards bi-nationalism at the expense of genuine multiculturalism.

"Ten years on from signing the Ohrid Framework Agreement (OFA), is the Republic of Macedonia’s peace process, of which minority protection at the municipal level is a primary component, broadly benefitting all communities equally? To what extent are the minority protection mechanisms administered at the local level preserving Macedonian society’s multi-ethnic character, or has the country taken a step closer towards the development of a bi-national state? There were definitely ‘winners’ as a result of the OFA, but were there also ‘losers’, and who are they? This paper seeks to apprise the minority rights protection mechanisms contained in the 2001 OFA, an important element of the EU’s Copenhagen Criteria, and in particular those at the municipal level. "

The decentralization process in the Republic of Macedonia has been widely regarded as a success story by regional and international actors alike. It is frequently considered a suitable non-territorial model of ethnic conflict management that can be replicated elsewhere. By increasing the number of competences administered at the municipal level, in addition to replicating the central government’s system of consociational power-sharing locally, the reforms seek to provide local, culturally diverse communities with greater control over the management of their own affairs and resources. This paper will begin with a theoretical discussion of how municipal decentralization may offer an institutional solution for managing and preserving cultural diversity within unitary states. It will seek to position Macedonia’s decentralization reforms within the ongoing theoretical debate between integrationists and accommodationists, and will offer some initial observations on how the reform’s implementation thus far have diverged from the original intentions of the Ohrid Framework Agreement. 

Key words: Decentralization; cultural pluralism; consociationalism; Macedonia; accommodation; integration."

This Chapter provides the context in which to examine whether decentralisation has contributed to the management of ethnic conflict in Macedonia. Guided by the concept of horizontal inequalities, it identifies factors unique to Macedonia which influenced the decision to devolve responsibilities to the municipalities after 2001. This chapter also examines the particular institutional design that Macedonia’s decentralisation took, and demonstrates how its combined use of consociational and integrative measures was intended to address the concerns of the ethnic Albanian and Macedonian communities simultaneously.

This Chapter examines the political aspects of decentralisation and considers whether the reform has widened effective political participation and strengthened democracy at the local level. It examines whether decentralisation in Macedonia has addressed political and cultural horizontal inequalities by: (a) improving the political representation of diverse groups in local decision-making processes; (b) deepening local democracy by providing opportunities for local residents to participate in local governance; and (c) enhancing the transparency, accountability and responsiveness of municipal governments. This chapter also assesses whether the largely consociational power-sharing mechanisms envisaged at the local level have promoted multiculturalism at the expense of gender equality.

This Chapter examines administrative decentralisation and considers whether devolving responsibility for the provision of public services can satisfy the demands of non-majority groups for greater autonomy over their own affairs. It focuses on the provision of primary and secondary education in Macedonia, and considers whether decentralisation has: (a) facilitated the provision of heterogeneous local public services; (b) enhanced participation and transparency in local decision-making regarding the delivery of services; and (c) ensured a more equitable and transparent distribution of public resources.

This Chapter assesses fiscal decentralisation from a political economy perspective and considers whether the reforms have enhanced the fiscal autonomy of Macedonian municipalities. It begins by considering how the short-term political calculations of national governing parties may have influenced both the design and implementation of fiscal decentralisation. The chapter then evaluates: (a) the extent to which municipalities are dependent on central government for their revenues; (b) the ability of municipalities to make independent decisions over spending; and (c) the ability of municipalities to set independent financial contracts with private actors, such as creditors and employees. An appraisal of inter-governmental fiscal relations is necessary to determine whether the political and administrative dimensions of decentralisation examined in the previous two chapters are conceivable in the absence of sufficient fiscal autonomy and resources.

This Chapter considers the apparent conflict between subsidiarity and solidarity, and examines whether the fiscal autonomy ensuing from decentralisation has been achieved at the expense of economic and territorial cohesion. It does this by examining whether decentralisation in Macedonia has addressed socio-economic horizontal inequalities by: (a) facilitating a more equitable distribution of public resources throughout Macedonia; (b) creating the optimal conditions for expanding citizens’ access to basic services (thereby reducing social exclusion); and (c) reducing longstanding socio-economic disparities between urban and rural areas.

Ethnic inequalities in divided societies can exacerbate social divisions and lead to conflict. Reducing these inequalities could have a de-escalating effect, yet there is little consensus on how this can be achieved most effectively and sustainably. Decentralisation is held to improve inter-ethnic relations in multi-ethnic states by allowing territorially concentrated groups greater autonomy over their own affairs, and the case of the Republic of Macedonia offers an example of the successes and failings of decentralisation.

Decentralisation and the Management of Ethnic Conflict offers new insight into the dynamics of conflict management through decentralisation, using an in-depth case study of decentralisation in the Republic of Macedonia between 2005 and 2012. Guided by the concept of horizontal inequalities, the volume identifies the factors which influenced the decision to devolve responsibilities to the municipalities after 2001.Taking an integrative approach to studying the political, administrative, and fiscal dimensions of decentralisation and its implementation, the book investigates whether these institutional reforms have indeed contributed to the reduction of inequalities between Macedonia’s ethnic groups, and what the obstacles were in those areas in which decentralisation has not reached its full potential. The key lesson of the Macedonian case is that attempts to solve internal self-determination conflicts through decentralisation will fail if local self-governance exists only in form but not in substance.

This book contributes to a more nuanced understanding of the challenges facing different forms of decentralisation in the long term, and as such represents a significant contribution to Conflict Studies, Development Studies and Political Science more generally.