BLOCK BY BLOCK - IT’S GOOD TO BUILD WELL - models of organisation of local self-governance - Publisher Enterprise Development Agency – EDA Banja Luka [email protected] www.edabl.org For the publisher Zdravko Miovčić Editor dr Zdravko Zlokapa Proof-reader (BiH edition) Ivan Jevđović English Translations Amira Sadiković Ulvija Tanović Proof-reader (English edition) Florence Graham Design Nenad Savković Layout Ivan Jevđović Printed by GRAFID d.o.o. Banja Luka For the printer Branislav Ivanković Print-run 500 Publication of this book was supported by the Open Society Fund BiH and Local Governance Initiative Budapest BLOCK BY BLOCK IT’S GOOD TO BUILD WELL – models of organisation of local self-governance – EDA 2008 PUBLISHER’S FOREWORD Th e book you have before you is preceded, and precedes itself, by various research projects and publications. It is preceded by a comprehensive and complex analysis of the situation in local governance and self-governance in BiH, published under the same title in 2005, and BiH local self-governance development strategy, published in 2006 and supported by a consensus among the most concerned domestic and international stakeholders. Th e analysis fi rst identifi ed the problem in the basic model of local self-governance applied in both entities: a confl ict between uneven territorial structure on one hand, and uniform structure of competences on the other. Subsequently, the research methods used focused on this problem in order to create a fundamental precondition for designing substantial functional and fi scal decentralisation. Th us, a relevant programme was designed, managed by EDA, the development agency from Banja Luka, supported by the Open Society Fund BiH and Local Governance Initiative Budapest. In terms of concepts, dealing with a fundamental problem requires a change in the current territorial and functional model: harmonisation of territorial struc- ture (fragmentation or merger of municipalities) or diff erentiation of competences (between rural and urban municipalities, between municipalities and cities); or, at the same time, mutual adjustment of both territories and functions? What should be the choice? Where to start? We have decided to postpone experiments until we have studied the experiences of countries of shared communal past, which are already in the “experimental stage” (Slovenia, Croatia and Macedonia), as well as experiences from Denmark, a key representative of the Scandinavian model of “wellbeing” and an advocate of the pragmatic approach to decentralisation and local self-governance organisation. “Block by Block – It’s Good To Build Well” contains six chapters. Th e fi rst fi ve are case-studies of countries selected on the basis of certain similarities and diff erences, and the last one is a conceptual overview and an introduction to further research. However unwise, there oft en seem to be simple solutions for complex problems in this country, and experiments take place in reality instead of with models or on paper. Hoping to contribute to changing this socially dangerous habit, together with the editor and the authors who worked hard on their superb contributions, we believe that this publication initiates serious professional, as well as political debates on fundamental issues of development of local self-governance in BiH. Table of Contents PUBLISHER’S FOREWORD AN ORGANISED HOUSE - STRONG COMMUNITY Local Self-governance in Denmark Introduction – Background on Denmark . .11 Reforms in Organisational Structure and Task Distribution in the Public Sector . 13 Overview of Municipalities . 14 Overview of Municipalities by Size in Selected European Countries . 15 Overview of Regions . 17 Overview of Competences as of 1 January 2007 . 18 Special Aspects . 20 Local Democracy – Results in (self) Governance . 26 SMALL AND SMALLER WHAT IS THE SMALLEST? Local Self-Governance in Slovenia Introduction . 37 Division of Municipalities into City, Suburban and Rural Ones . 44 Municipal Bodies . 61 Municipal Financing . 63 Administrative Capacities of Municipalities . 68 Municipal Bodies Election System . 71 Internal Decentralisation of Municipalities . 72 Conclusions . 76 BIT BY BIT BUT WHERE TO? Local Self-governance in Croatia Introduction to Local Self-governance in the Period from 1990 to 2007 . 79 Overview of Local Units in the Republic of Croatia and Division into Counties, Cities and Municipalities . 88 Examples of Local Units of Diff erent Categories . 90 Overview of Legal Competences of Local Units and Self-governance Aff airs . 93 Special Aspects . .100 Instead of Conclusions . 122 TRIAL AND ERROR EXPERIENCE Local Self-Governance In Macedonia Introduction to the State of Local Power in the Republic of Macedonia from 1990 to 2007 . .125 Overview of Municipalities in the Republic of Macedonia and Th eir Classifi cation into Urban, Suburban and Rural Municipalities . 137 Examples of Municipalities from Various Categories . .140 Overview of the Legal Competence of Municipalities and the Extent of Th eir Implementation in the Analysed Municipalities . .142 Special Aspects of Upcoming Categories . .148 Conclusion . 175 IT WON’T BUILD BY ITSELF Local Self-Governance in Bosnia and Herzegovina Introduction . .179 Entities, Cantons, Municipalities... .180 Territory, Population and Development . 193 What Municipalities Do And Don’t Do? . .199 Inter-Municipality Cooperation . .202 Decentralisation only as far as the municipal level! What about below that? . 204 Is it too early for a conclusion? . 206 COMPARATIVE OVERVIEW OF LOCAL SELFGOVERNANCE More or Less Competences – Depends on What? . .210 Territory and Local Self-Governance . 212 Local Elections and Th e Structure of Local Government Bodies . 215 Local Finances and Spending Public Funds . 217 APPENDICES Municipality Competences in Bosnia and Herzegovina . .222 Characteristics of Countries Included in the Analysis . .238 Comparative Overview of Countries according to Governance Indicators (World Bank) . .242 AUTHORS RESOURCES Dragan Milinković AN ORGANISED HOUSE A STRONG COMMUNITY – Local self-governance in Denmark – INTRODUCTION BACKGROUND ON DENMARK Denmark is the oldest kingdom in the world. It is an island state of 43.094 km2, comprising the Jylland peninsula and 474 islands, the largest of which are Sjælland, Fyn, Lolland, Falster and Bornholm. Th e Faeroe Islands and Greenland are parts of Denmark, though self-governed (autonomous) and are not part of the European Union (hereinaft er: the EU) or the European economic area, i.e. the EU Treaty with the Kingdom of Norway, the Republic of Island and the Duchy of Lichtenstein, and will thus not be covered in this paper. 1 Laws adopted by the Danish National Assembly (Folketinget) do not, as a rule, apply to the Faeroe Islands or to Greenland, but their eff ect may include them. Th e Danish Constitution (Grundloven) was adopted on 5 June 1849 2 and was amended in 1866, 1915, and most recently on 5 June 1953. Danish municipalities also date far back because in its Chapter VIII (old § 96, current § 82), the 1849 Constitution contains a provision on municipal (self) governance: “Th e right of municipalities to manage their own aff airs independently, under state supervision, shall be set by law.” Th is means that the legislator defi nes, 1 Ministry of Science, Technology and Innovation, www.workindk.dk 2 Th is date is celebrated as the Constitution and Statehood Day. 12 BLOCK BY BLOCK IT’S GOOD TO BUILD WELL within a wide scope, the content of municipal (self)governance, both in terms of tasks assigned to municipalities, and in terms of setting the boundaries of unwritten (common) municipal aff airs. Th erefore, municipal (self)governance cannot be abolished in full. Population of Denmark: EXPRESSED 1990 2000 2006 IN: Population on 1 Janu- million 5.14 5.33 5.43 ary Immigrants and their percentage 4.2 7.1 8.5 ancestors From non-Western percentage 2.2 4.8 6.0 countries Source: Danmarks Statistik: “Danmark i tal 2007”, www.dst.dk/Statistik/ags/DKital.aspx Th e only recognised minority is German (Nordschleswigerе), of some 15–20 thousand persons settled in the south of the peninsula in Sønderjylland.3 Th e offi cial language is Danish, English is spoken by almost the entire population, and many people speak German as well. Danish, Norwegian ands Swedish are quite similar and native speakers understand each other. Th e offi cial religion is Lutheranism (95% of the population), governed by the People’s Church (Folkekirken). Th ere are 3% of other Christian religions and some 2% of Muslims.4 Th e currency is the Danish crown (hereinaft er: DKR), and although it is an EU member state, Denmark is not part of the Euro-zone, as its population opted out at the referendum held on 28 September 2000: of 87.6% of the total votes, 53.2% were against.5 3 www.landesregierung.schleswig-holstein.de/coremedia/generator/Aktueller_20Bestand/StK/Information/ Grenzregion__SH__DK/RegionSyddanmarkSchleswig__DK.html and the Ministry of Health and Home Aff airs: www.im.dk/im/site.aspx?p=238 4 www.cia.gov/cia/publications/factbook/geos/da.html 5 www.eu-oplysningen.dk/dkeu/dk/afstemninger/afstemning/2000/ AN ORGANISED HOUSE A STRONG COMMUNITY 13 REFORMS IN ORGANISATIONAL STRUCTURE AND TASK DISTRIBUTION IN THE PUBLIC SECTOR Th e 1970 public sector reform decreased the number of municipalities to 275 and the number of districts to 14. It also reorganised the regular tasks and duties and the state assigned greater infl uence and more tasks to municipalities and districts. Th e public sector has been gradually decentralised since then. Th e latest public sector reform took eff ect as of 1 January 2007 and it introduced huge changes. It comprises three key elements: 1. it established a new map of (self)governance with 98 municipalities, instead of the previous 271 municipalities and 5 regions; 2. it introduced a new distribution of tasks; 3. it introduced a reform of fi nancing and harmonisation. Th e previous distribution of tasks was no longer purposeful in several areas, and municipalities and districts were not large enough to perform the tasks assigned to them by law, etc.