|The need for IMC in Central and Eastern Europe|
|Obstacles to IMC in Central and Eastern Europe|
|The need for a national policy to promote IMC|
|Financial incentives for IMC|
|Capacity building and expert assistance|
|Information and knowledge management|
Following the break-up of the socialist bloc, the Soviet Union and Yugoslavia, many Eastern European countries and former Soviet republics initiated policies aiming at the establishment of local self-government (or re-establishment in the countries that were part of former Yugoslavia). These policies were accompanied by a process of territorial reorganization that resulted in the establishment of a large number of local self-government units.
Whereas the number of municipalities in Hungary was reduced to 1,300 during the communist period, it increased to 3,100 in post-communist reforms. In the Czech Republic, there has been a 50 percent increase in the number of municipalities following the democratic reforms, from 4,100 to about 6,000. Armenia, with a population of 3.2 million, had 300 municipalities in Soviet times. This number was multiplied by three after the introduction of a local self-government system. Currently, Albania, with a population of slightly over 3 million, has 65 municipalities as well as 309 communes with an average population of 5,200.
This high level of territorial fragmentation constituted a major challenge for the efficient and effective performance of municipal functions, particularly in contexts where decentralization reforms were initiated. This is the reason that many of the post-socialist countries implemented a process of territorial consolidation (Lithuania in 1996 and Georgia in 2006). In others, however, such reform was politically very sensitive and was not implemented (Armenia) or was only partially implemented (FYR of Macedonia in 2004). Box 5 illustrates the impact of municipal fragmentation on local development in Armenia.
Box 5: Armenia - The impact of municipal fragmentation on local development
Armenia's 1995 Constitution laid the legal foundation for local self-government reforms in the country. To summarize, Armenia has ten sub-national jurisdictions at the regional level and 915 self-governed municipalities of which 866 are rural and 49 are urban. There are 36 municipalities with populations of less than 100 inhabitants; 163 municipalities with less than 300; and 176 municipalities with less than 500. More than 93 percent of municipalities have total populations of less than 5,000. Given that economies of scale tend to be relevant in this size range for local jurisdictions, the excessive fragmentation in Armenia has resulted in large development disparities and a lack of administrative and fiscal capacity. Thus, municipal fragmentation is a major constraint for the development of local service delivery mechanisms, sustainable development and further decentralization.
IMC is currently ranking high on the list of priorities of many central governments in CEE, since municipal fragmentation is increasingly considered one of the factors preventing decentralization from being fully translated into cheaper and better public services for citizens. In addition, all the countries of CEE are faced with serious development challenges that require massive investments in infrastructure, business promotion or environmental protection. These often call for regional/sub-regional approaches. In the Western Balkan countries and Turkey, which benefit from EU pre-accession financial support, IMC is considered critical to access EU funds for local development, particularly for public utility services and infrastructure (Box 6).
Box 6: Poland - IMC to access EU funds
In Poland, local unions formed by groups of municipalities were formed to access EU funds. The Union of the Upper Raba Communities and Krakow was created to deal with water degradation in the Raba River basin by constructing sewage treatment plants and building sanitary pipelines. As a Union it was able to mobilize EU pre-accession funds, something which the member municipalities would not have been able to do individually for this type of project.