Municipalities in the six Western Balkan countries have made progress in legal approximation with the European Union, but continue to lack funding, staff and technical capacity to implement European standards. Weaknesses are most pronounced in the administration of EU funds, public procurement, social services, corruption prevention and environmental protection, according to a study by NALAS, the network of local authority associations in South-East Europe.
The study, which covers the year 2025, analyses Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. The assessment focuses on five negotiation chapters that directly affect local government: public procurement, social and employment policies, regional policies and structural funds, rule of law and fundamental rights, and environment and climate change. The report finds that large cities and capitals have more income, specialists and administrative structures to adapt to EU requirements. Small and rural municipalities have more difficulties in project preparation, procurement, social services, water and waste management and the implementation of anti-corruption measures.
Meanwhile, local fiscal autonomy has weakened. In 2006, own revenues, allocated taxes, and general grants accounted for 83% of local budgets in the region. By 2021, their share had dropped to 70%.
The lack of capacity to prepare and implement European projects is one of the common problems of the six countries. Small administrations have difficulties in completing documentation, preparing technical projects, carrying out procurement according to EU rules and securing co-financing.
In Bosnia and Herzegovina and Kosovo, preparation for regional policies and structural instruments is still assessed as being at an early stage. Albania, Montenegro, North Macedonia and Serbia are classified as moderately prepared, but all have shortcomings at the local level.
The report warns that these weaknesses could also hinder the use of the €6 billion Growth Plan for the Western Balkans. The ability to absorb funds and implement reforms has yet to be proven, while limited consultation of municipalities by central governments could affect the quality of projects.
NALAS recommends the creation of funds that would assist municipalities, especially those with fewer resources, with co-financing, pre-financing, feasibility studies, environmental assessments, and technical documentation.
The study highlights that corruption continues to be a problem in all six countries, especially in public procurement, finance, energy, transport, health, water, infrastructure, natural resources and education.
NALAS recommends the mandatory involvement of local governments in the drafting of legislation to be implemented by municipalities, as well as in negotiation groups, thematic committees and structures that program IPA funds.
Administrative procedures should be standardized, especially in procurement, financial management, environmental assessments and anti-corruption measures. The report also calls for a review of decentralization laws to clearly define responsibilities and sources of funding. Municipalities should have funds for co-financing and pre-financing projects, as well as support for the preparation of feasibility studies and technical documentation./ Monitor
