From inclusion and transparency, to equity and quality: How can we improve local budget processes?

Authors: Dragan Tevdovski, Branimir Jovanovic, Viktor Mitevski, Viktor Stojkoski, Elena Trpkovska, Nena Manchev, Marija Kitanska Cvetkovska, Artan Sulejmani, Goran Mojanoski, Nevena Spasovska, and Ksenija Popovikj

The objective of this project is to investigate how equitable, inclusive, transparent and accountable budget processes are at local government level and to propose measures for their improvement. The analysis included four pilot municipalities in North Macedonia, selected to represent different geographic locations and socio-economic characteristics. We employed different methods to assess the current state of local budget processes: desk analysis for identification of legal procedures and the level of transparency of local governments’ websites; a representative citizen telephone survey to assess citizens’ attitudes; interviews with local government employees; and focus groups with civil society and representatives of marginalised groups. In general, we found that most of the citizens have not seen the main budget documents.

Public debates are organised with participants who may be biased and only confirm local governments’ positions, or are scheduled at the end of the budget preparation when it is too late to propose significant changes. At the same time, citizens’ participation through informal channels of communication is found to be frequent, but it is also used to drum up support for political parties, for instance through patronage activities. As a result, citizens in general are not satisfied with the quality of budget processes.

We constructed an index (Open Municipalities Index – OMI) that measures the different dimensions of the budget process, allowing comparison between municipalities. Using the index, we broaden the analysis to include all 81 municipalities in North Macedonia.

To conclude, we provide policy recommendations that include enhancement of financial literacy, legislative changes and pilot projects for participatory budgeting. The OMI can also be an important tool, which through competition, incentivises local governments to improve their local budget processes.

Note: The research report is available in English, Albanian and North Macedonian.

Policy brief: Tevdovski, Jovanovic, Mitevski, Stojkoski (2021) Improving local budget processes: from inclusion and transparency to equity and quality

Video Policy Brief: How can local governments involve citizens in the budget process?