The former Yugoslav Republic of Macedonia gained independence from former Yugoslavia in 1991. The country name is now North Macedonia. North Macedonia is a parliamentary democracy. The Parliament is unicameral. The Head of State is the President of the Republic and the Government is led by a Prime Minister. The former Yugoslav Republic of Macedonia applied for EU membership in 2004 and became a candidate in 2005.
North Macedonia is a unitary State comprising two levels of governance: central and municipal. It used to be a decentralised country during the Yugoslav period. Once it gained independence, several changes occurred concerning the territorial organisation and Municipalities’ competences were reduced. The decentralisation process started again with the adoption of a Law on Local self-government in 1995. Under the so-called ‘Ohrid Framework Agreement’ of 2001, a new Law on Local Self-Government was approved in 2002 and foresaw the transfer of some administrative competences to the Municipalities. Finally, a Law on territorial organisation of local self-government was adopted in 2004 and initiated the actual transfer of some competences to local self-government units. Since the transfer of competences has not yet been completed, it is foreseen that during the 2011-2015 period, some new competences will be transferred from the central to the local level, namely in the field of planning and health care[1]. In the field of (construction) land, the main objective is to transfer to a local level the management of the (construction) land. This process is still ongoing, so at the moment several Municipalities have full competence to manage (to sell, to lease, to exchange etc.) the land.
As of today, there are 84 Municipalities (opstina) plus the City of Skopje. The latter is recognised as having a special status and consists of 10 Municipalities (which are part of the overall number of 84 Municipalities). Moreover, there are 8 statistical Regions for planning purposes only. Within the municipalities local (rural) or urban communities may be established. The main goal of the local/urban communities is to enable the concerned residents to address issues, take positions and prepare proposals for issues of an immediate and daily nature to the Municipalities.
The principle of local self-government is enshrined in the Constitution (Articles 8,114-117 and Amendments XVI and XVII). The control of legality over municipal acts is carried out by the central authorities. Municipalities have the right to appeal to the Constitutional Court if the State authorities encroach on their prerogatives.
Besides the Constitution, the division of powers between the different levels of governance is specified by some specific laws:
- the 2002 Law on Local Self-Government[2];
- the 2004 Organic Law on territorial organisation of local self-government[3];
- the 2004 Special Law on the City of Skopje[4]; and
- the 2004 Law on financing the units of local self-government[5].
The distribution of competences among the different levels of governance is further described in numerous other laws.
Municipalities’ revenue is derived from their own revenue sources (including local taxation, fees, charges and fines) – approximately 40% – and from grants – approximately 60%[6]. Only 15% of their revenue is used for development initiatives, the remaining 85% being spent on administrative costs. These data reflect a high degree of centralisation and a lack of financial sustainability at the local level. Also, Municipalities may borrow at home and abroad, with the consent of the Ministry of Finance.
Fiscal decentralisation started in July 2005 and is still ongoing; the law on Local Government Finance created a two-phase process for fiscal decentralisation. In the first phase, local government units were made the owners of social sector functions and were given earmarked grants to pay for the costs of maintaining these facilities.
Under the second phase, local government units that met specific conditions would become responsible for maintaining these facilities but also for paying the wages of their employees[7]. As of today, only 1 out of 85 municipalities has not yet entered into the 2nd phase of fiscal decentralisation.
1.1. Central level
- Overall legislation and execution;
- Security and defence;
- Foreign policy;
- Organisation of civil service, and
- Spatial plan.
1.2. Regional level
1.3. Local level
- Urban planning;
- Communal activities;
- Local economic development;
- Environmental protection;
- Water supply and sewerage;
- Local economic development;
- Transport (local roads);
- Culture;
- Tourism;
- Sport and recreation;
- Social welfare and health protection (including children protection);
- Education (preschool, primary and secondary education);
- Civil protection (disaster protection and assistance);
- Fire-fighting, and
- Affairs which are delegated from the state bodies to the Municipalities.
[1] Government portal, Decentralization and regional development
[2] Law on Local Self-Government, Official Gazette 05/02.
[3] Organic Law No.55/04 on the organisation of local self-government units of 16 August 2004, Official Gazette 55/2004, 12/2005, 98/ 2008.
[4] ZAKON ZA GRADOT SKOPJE [Special Law on the City of Skopje of 16 August 2004], Official Gazette 55/2004, 158/2011.
[5] Law on financing the units of local self-government of 16 August 2004, Official Gazette, 61/04, 96/2004, 67/2007, 156/2009, 47/2011.
[6] Constitution Official Gazette 52/1991, Article 114; Law on financing the units of local self-government of 16 August 2004, Official Gazette, 61/04, 96/2004, 67/2007, 156/2009, 47/2011.
[7] Levitas, T. Local Government Finances and the Status of Fiscal Decentralization in Macedonia: A Statistical Review, 2008-2011, Urban Institute Center on International Development and Governance, IDG Working Paper No. 2011-02, May 2011.
