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Corruption Prevention at Local Level in Eastern Europe and Central Asia

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Corruption Prevention at Local Level in Eastern Europe and Central Asia OECD Anti-Corruption Network for Eastern Europe and Central Asia Corruption Prevention at Local Level in Eastern Europe and Central Asia OECD Anti-Corruption Network for Eastern Europe and Central Asia Corruption Prevention at Local Level in Eastern Europe and Central Asia About the OECD The OECD is a forum in which governments compare and exchange policy experiences, identify good practices in light of emerging challenges, and promote decisions and recommendations to produce better policies for better lives. The OECD’s mission is to promote policies that improve economic and social well-being of people around the world. Find out more at www.oecd.org. About the Anti-Corruption Network for Eastern Europe and Central Asia Established in 1998, the main objective of the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) is to support its member countries in their efforts to prevent and fight corruption. It provides a regional forum for the promotion of anti-corruption activities, the exchange of information, elaboration of best practices and donor coordination via regional meetings and seminars, peer-learning programmes, and thematic projects. ACN also serves as the home for the Istanbul Anti-Corruption Action Plan. Find out more at www.oecd.org/corruption/acn/. Please cite this publication as: OECD (2021), Corruption Prevention at Local Level in Eastern Europe and Central Asia. This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein are those of the authors and do not necessarily reflect the official views of the OECD, the governments of OECD member countries, OECD Anti-Corruption Network for Eastern Europe and Central Asia member countries, or Parties to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. This document and any map included herein are without prejudice to the status or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city, or area. © OECD 2021 3 4 1 Foreword This cross-country report on prevention of corruption at local level focuses on mechanisms, which strengthen integrity in local governments. The primary focus is on initiatives that originated and were implemented at the local level. The broader national anti-corruption frameworks are reflected as well in order to describe the context and take into account that local and national efforts often intertwine closely. The review focuses on Eastern European and Central Asian countries participants of the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) and features also examples from non-ACN OECD countries and international practices. Country responses to questionnaires and reviews of the draft report as well as extensive desk research form the empirical basis of the study. Regional seminars in Tirana (Albania) in December 2017 and in Vienna (Austria) in November 2018 served as opportunities to discuss research issues and fine-tune the research plan. The report was prepared in 2018. The purpose of this review is to identify trends, main challenges and practical solutions for preventing corruption at local level and propose regional recommendations. It serves as a reference point for policy reforms and reviews in this region. The report is prepared as part of the Work Programme for 2015-2019 of the Anti- Corruption Network for Eastern Europe and Central Asia within the OECD Directorate for Financial and Enterprise Affairs. 5 Table of contents Foreword 4 Abbreviations 7 Executive summary 8 1. Introduction 9 1.1. Objective 9 1.2. Methodology 9 1.3. Structure of the study 10 2. Prevention of corruption at the local-level in the context of international standards 10 2.1. The application of international anti-corruption standards to the local level 10 2.2. Anti-corruption principles in local and regional government standards and recommendations 12 3. Regional overview 16 3.1. The structure of the local governance: 16 3.2. Political features of the local governance: electoral systems and political competition 18 3.3. Decentralization, local expenditure and competences of the local governance 20 3.4. Levels of corruption and sensitive areas of integrity at the local level 24 4. Local anti-corruption policies 28 4.1. The analysis of vulnerabilities: risk assessments 28 4.2. Planning of activities in strategies, action plans and integrity plans 32 4.3. Monitoring and reporting mechanisms 39 4.4. Local integrity institutions 41 5. The political level of local governance 49 5.1. Rules for local political campaigns and the role of democratic political competition 49 5.2. Relations between local governments and the local media 50 5.3. Conflict-of-interest provisions 51 5.4. Prevention of clientelism 52 5.5. Prevention of nepotism 54 6. Service delivery 57 6.1. One-stop shops 57 6.2. E-services 58 6 7. Building and other permits 63 8. Territorial/urban planning 66 9. Planning and execution of local budgets 68 9.1. Transparency of local budgets 68 9.2. Public participation in budgeting 70 10. Procurement 75 11. Management of assets and municipally-owned enterprises 79 11.1. Management of assets 79 11.2. Governance of municipally-owned enterprises 80 12. Other practices of transparency 82 13. Promotion of local business integrity 86 14. Recommendations for the prevention of corruption at the local level 87 7 2 Abbreviations ACN – Anti-Corruption Network for Eastern Europe and Central Asia CRI – Corruption Risk Index EUR – Euro GDP – gross domestic product IF – Intervention Fund (Romania) NAC – National Anti-corruption Centre (Moldova) NGO – non-governmental organisation OGP – Open Government Partnership RF – Reserve Fund (Romania) UAH – Ukrainian hryvnia UNCAC – United Nations Convention against Corruption UNDP – United Nations Development Programme 8 3 Executive summary The study aims to identify trends, main challenges and practical solutions for preventing corruption at local level in the countries of the Anti-Corruption Network for Eastern Europe and Central Asia. The study focuses particularly on efforts initiated, adopted and implemented in local governments. Common practices: Integrity and anti-corruption plans have become increasingly used tools in various municipalities and often are mandatory according to the law or national anti-corruption plans. Often a risk assessment is envisaged as an initial stage in the process of developing a plan. Local governments generally carry out their own assessments of vulnerabilities although in some countries central anti-corruption agencies do it. Different monitoring and reporting mechanisms are employed regarding the implementation of anti-corruption measures. Some of these mechanisms are local but central anti-corruption or other executive bodies also commonly monitor the implementation at the local level. The study notes widespread although uneven progress in the area of service provision. One-stop shops are a common way to improve service delivery and reduce opportunities for corruption throughout the region. Progress in the area of e-services used to be slow. However, now there are rapid developments in several parts of the region and local governments in some countries offer a wide range of e-services. Innovative practices: As can be expected, municipalities throughout the region publish information on draft budget plans, adopted budgets and actual expenditure. In addition, some municipalities prepare special brochures with main budget data in an easily readable form. A new trend is to publish budget data on-line in innovative formats to visualise the information and permit interactive exploration of the data. The usefulness of involving the public in developing local budgets is widely recognized across the region and at least some form of consultation can be considered a current norm. An even deeper involvement of the public in the budget formation is granting certain decision-making rights to the population in the form of participatory budgeting. Allowing community members to decide directly on how to spend a part of a budget has become a popular mechanism in some countries of the region. The region also has some advanced practice cases where decisions, which grant permissions for the use of public spaces and construction permits, are published in an open-data format complete with extensive details to enable meaningful monitoring. Challenging areas: To name a few challenges, effective management of conflicts of interest at the local level represents common difficulties due to the small size of communities and situations where nobody can make a decision without being related to persons who would be affected. Solving this challenge by applying more relaxed rules creates a risk to systematically award resources to or otherwise favour the persons who are related to key decision makers. Ensuring adequate standards for the resolution of conflicts of interest in local governments in order to make sure that municipal resources are distributed and power is used in an impartial manner remains 9 a challenge, which will require attention throughout the region. This is important also in providing employment opportunities. The country responses generally reflect few initiatives at the local level regarding the fairness of political campaigns and the encouragement of political competition. The local practices mainly concern the placement of campaign posters and stands. Potentially local
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