THE FISCAL DECENTRALIZATION AND LOCAL ECONOMIC DEVELOPMENT, THE CASE OF MACEDONIA
THE FISCAL DECENTRALIZATION AND LOCAL ECONOMIC DEVELOPMENT, THE CASE OF MACEDONIA

Summary/Abstract: The purpose of the paper is to analyze the process of fiscal decentralization and the local economic development (LED) in Macedonia. The progress of the process of fiscal decentralization, the elimination of the regional disparities and local economic development were the main political and institutional reforms in Macedonia after the internal conflict of 2001. In the first level, the paper analyses the level of fiscal decentralization in Macedonia with countries of Western Balkans (WB) and the countries of EU. In the second level the paper analyses the level of fiscal decentralization and the level of disparities between municipalities and regions and the level of LED in Macedonia. The findings of the author of this study are consistent with the findings of international and local researchers in this field. The actual level of fiscal decentralization and the ineffective implementation of the law on equal regional development have deepened the local and regional disparities and are the major obstacle for LED in municipalities in Macedonia. The period of analysis includes (2006-2015), a period sufficient to make competent findings based on the real effects of the implementation of fiscal and regional reforms in Macedonia based on: the law on municipalities, the law on territorial division of municipalities, the law on municipal finance and the law on equal regional development. The author of this paper shares the conviction that the main responsibility for the inadequate level of LED is consequence of low level of fiscal decentralization. In particular, the deepening of local and regional disparities as responsibility belongs to all Macedonian governments led by the ethnic and political Macedonian majority.

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