National Transition Fund for Territorial Reform - Economic costs, what is expected to be brought about by the new division of Albania
The new administrative-territorial reform is expected to be accompanied by a significant increase in costs for local government. Referring to the majority report on the reform, it is expected to be inevitably accompanied by financial, administrative and organizational costs. However, according to the report, from international experience, these costs are mainly temporary, while the benefits stemming from a more efficient organization of governance are long-term in nature and have a positive impact on economic development, the quality of public services and fiscal sustainability.
According to the draft, transition costs can be grouped into several main categories.
First are the institutional costs, which are related to the establishment and functioning of temporary transition structures, the preparation of bylaws, technical assistance, public consultations, and inter-institutional coordination.
Second are human resource costs, which include administration training; professional development programs; personnel mobility; harmonization of organizational structures; possible administrative reorganization costs.
Third are the costs of digital systems. Institutional transformation requires the adaptation of information systems, the integration of administrative records, the development of new reporting platforms, and the modernization of financial management systems.
Under the terms of the proposed reform, this category represents one of the most strategic investments.
Fourth, there are the costs of asset transfer, which include the process of inventorying, revaluation, registration and transfer of public assets, which require considerable financial and administrative resources. The same category also includes costs related to harmonizing existing contracts, transferring obligations and resolving legal issues that may arise during the process.
Fifth are the costs of communication and public participation, where it is recommended to finance a dedicated communication, information and consultation program with citizens, business, civil society organizations and academic institutions throughout the implementation period.
For this reason, to avoid fragmented financing of the reform, it is recommended to create a National Transition Fund, administered by the central government and dedicated exclusively to financing implementation costs.
According to the draft, this fund should be multi-annual in nature and finance: investments in administrative systems; capacity development programs; technical assistance to municipalities; digital transformation; studies and reform monitoring.
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