159 administration provided at local or regional level
and an examination should be made of the pos-sibility of harmonizing the territorial competence of organs providing public administration tasks and functioning at district level. On the basis of the result of the examination, a strategy should be elaborated concerning the general administ-rative category of the small region of public ad-ministration, and, within this framework, the main provisions concerning its tasks, organization, management, territories of territorial competence, and financing should be elaborated.
Responsible: ministers concerned
• for the coordi- Minister Heading the nation: Prime Minister’s Office
Deadline: on-going
III/8.
With regard to regional development:
a) The detailed regulations relating to the operation of the county area development councils, territorial development councils, and regional development councils as well as their legal supervision should be elaborated.
Responsible: according to Government Resolution No. 2313/2000.
(XII. 20.) Korm.
Deadline: according to Government Resolution No. 2313/2000.
(XII. 20.) Korm.
b) A proposal should be drafted concerning the ela-boration of uniform organizational and opera-tional regulations and procedural rules for the monitoring committees.
Responsible: according to Government Resolution No. 2134/1999.
(VI. 11.) Korm.
Deadline: according to Government Resolution No. 2134/1999.
(VI. 11.) Korm.
the work program arising out of the document entitled “Hároméves megállapodás a közalkal-mazotti szférában” [‘Three-year agreement in the public employee sector’],
• Government Resolution No. 2003/1995. (I. 20.) Korm. determining the 1995 operative plan of the government commissioner for the moderni-zation of the public administration system.
161
NOTES
1 For the comparative analysis the Hungarian Study uses the ‘Synthesis Paper 2000’ written by EC on the preparation of the candidate countries for the accession to the EU and the OECD country reports assessing the Hungarian experiences comparing the best practices, see: ‘OECD Reviews of Regulatory Reform: Regulatory Reform in Hungary’, Paris, 2000. And ‘OECD Territorial Reviews: Hungary’ Paris, 2001.
2 The Hungarian Study uses as a pattern the ‘TOR of 1999-2000, and 2001–2002 for Public Administration Development Program’ accepting by the Central Government in 1999 and 2001. To show the response of the Hungarian Central Government to these challenges. (See: Resolutions of Central Government of Hungary 1052/1999(V.22.) and 1057/
2001. (VI.13.) Korm. Sz.r.)
3 The Country Study based on the next main studies: Development of EU-Conform Regions in Hungary, or Financial System of the Hungarian Local (Self) governments, World Bank- PMO’s of Hungary Common Published Studies, (Public Administration Development Studies Series 4th and 5th Columns), Budapest, 2001.
4 Tamás M. Horváth: Directions and Differences of Local Changes. In.: Decentralization: Experiments and Reforms. OSI/
LGI, 2000. p. 27.
5 The main three purposes and/or functions of the local governments are ‘Liberty’/ ‘Autonomy’, and ‘Participation’/
‘Democracy’ and ‘Effectiveness’/ ‘Capability’. See: L.J. Sharpe: Theories and Values of Local Government. Political Studies.1993. /2. (153-174.pp.), J.Stewart-R.Greenwood: The Purpose and Character of Local Government, INLOGOV, and University of Birgmingham.1995.
6 OECD Report on Regulatory Reform in Hungary. Paris, 2000. pp. 15–37.
7 István Temesi: Local Government in Hungary. In. Decentralization: Experiments and Reforms. OSI/LGI.2000. (348.p.)
8 OECD, 2000. p. 11.
9 In every ministry there are divided the role of two secretariats: a Permanent State Secretariats for administrative function, leaded by the highest ranking senior civil servant, who is considered politically neutral; and for the political function, a Parliamentary State Secretariat, which has a political leader (mostly one of the MPs), who represents the minister in Parliament and other interministerial committees, and is the political counselor or deputy of the minister in the ministries. Hungary Country Profile. SIGMA, 1999. p. 10.
10 The Hungarian Study used the main studies in that field which are the following: Hungary-Subnational Modernization, Policy Note (An Integrated Effort for Modernizing the Subnational Government System in Hungary), World Bank-PMO’s of Hungary Common Published Study, (Public Administration Development Studies Series 1st Column, Budapest.
1999, or Davey, K.–Horváth, M., T.–Péteri, G.: Local Autonomy and Responsibility (Development of government actions in a plural public service system) British Know How Fund-PMO’s of Hungary Common Published Study,(Public Administration Studies Series 2nd Column), Budapest, 2000.
11 Resolution of Government on TOR of Public Administration Development 1999–2000. V. Chapter. And the Series of Research Studies on Public Administration Reform and Regional Policy. Published by PMO 1999–2001. (1-5. Column.)
12 The European Commission, in its annual country report for 2000, the latter institution offered a favourable judgement of the development of public administration, according to which “Hungary is achieving stable development in every area in the establishment of the administrative capacity with a view to the application of the Community Achievements.
In the continued implementation of the 1999 development programme, further progress may be seen in the modernisation of the system of public administration.”
13 The last OECD Report on Regulatory Reform evaluated the whole transition process, included the decentralization too, and stated the followings: ‘ after ten years of determined reform... Hungary has entered the mainstream of OECD countries with respect to the challenges it faces in establishing quality regulatory regimes supporting good government and long-term economic growth.’
14 The British Know How program helped, besides other issues, the training of senior civil servants and preparing the new amendment of act on Civil Servants to match the new regulation the British practice. For instance the PMO
M E T H O D S A N D T E C H N I Q U E S O F M A N A G I N G D E C E N T R A L I Z A T I O N R E F O R M S I N H U N G A R Y
has supported the regional contribution of French INFH and Association of Hungarian Municipalities to train the local leaders and experts for the regional and rural programming.
15 OECD, 2000. p. 11.
16 OECD, 2000, p. 22.
17 Resolution of Government 183/1988(XI.11.) Korm.sz.r. On The tasks and responsibilities of the Parliamentary Secretariat in the PMO for the Public Administration and Regional Policy.
18 The medium-term program was adopted in Government Decree No. 1035/1999. (IV. 21.).
19 The Country Study based on the next main studies: Development of EU-Conform Regions in Hungary, or Financial System of the Hungarian Local (Self-G, World Bank-PMO’s of Hungary Common Published Studies, (Public Administ-ration Development Studies Series 4th and 5th Columns), Budapest, 2001.
20 The Country Study based on the next main studies: Development of EU-Conform Regions in Hungary, or Financial System of the Hungarian Local (Self) governments, World Bank- PMO’s of Hungary Common Published Studies, (Public Administration Development Studies Series 4th and 5th Columns), Budapest, 2001. And Davey, K-Horváth, M., T-Péteri, G.: Local Autonomy and Responsibility (Development of government actions in a plural public service system) British Know How Fund-PMO’s of Hungary Common Published Study, (Public Administration Studies Series 2nd Column), Budapest, 2000.
21 OECD Reviews of Regulatory Reform: Regulatory Reform in Hungary, Paris, 2000. p. 11.
121
M A S T E R I N G D E C E N T R A L I Z A T I O N A N D P U B L I C A D M I N I S T R A T I O N R E F O R M S
I N C E N T R A L A N D E A S T E R N E U R O P E C O U N T R Y S T U D I E S
Decentralization
of Public Administration in the Republic of Croatia
—Reform Process Management
Te o d o r A n t i c´
123
Decentralization of Public Administration in the Republic of Croatia—Reform Process Management
Te o d o r A n t i c´
D E C E N T R A L I Z A T I O N O F P U B L I C A D M I N I S T R A T I O N I N T H E R E P U B L I C O F C R O A T I A – R E F O R M P R O C E S S M A N A G E M E N T
INTRODUCTION
After the multi-party elections in 1990, the enactment of the Constitution of the Republic of Croatia on 22 Decem-ber 1990 and the announcement of independence on 25 June 1991, Croatian administration was for the first time fully defined through the regulations of the Croatian Parliament.
In addition to the general problems facing all administrative systems, the Croatian administration was, while in the process of its shaping, confronted with special circumstances related to its historic development: the dissolution of the Socialist Federative Republic of Yugoslavia and the struggle for the independence of the Croatian state, the transition from a one-party to a multi-party political system, the transition from an economy based on social ownership, to a market economy with a mostly private ownership structure, and finally war that brought part of the territory under military occupation and destruction of great mag-nitude. These circumstances indicated the need for the shaping and strengthening of all parts of the administrative system appropriate for an independent state.
As a consequence of that situation, the system of state administration leant towards unity and centralization, even after the mentioned extraordinary circumstances had ceased to exist, while the interests emerging from regional and local differences were neglected, thus developing the swift expansion and extraordinary concentration of the Croatian state administration.
In these circumstances, a system of local self-government was enacted in 1992 through the Act on Local self-govern-ment and Administration,1 after which in 1993 the first local elections in accordance with the new system were held.
However, taking into account all of the above, this local self-government system was fundamentally shaped to provide for, and secure, a centralized management of public affairs.
Soon after the cessation of war activities and the re-integ-ration of the occupied territories of the Republic of Croatia within its legal system, a need developed for a major reform of the system of state administration and local self-govern-ment:
1) firstly, in the direction of the opening up, differentia-tion and strengthening of the operadifferentia-tional indepen-dence of administration, the de-concentration of power, and the decentralization of the political and administrative system,
2) Secondly, in the direction of strengthening local and regional self-government, so that it can gradually take over responsibilities from central state authority, and at the same time act as a counter-balance to this authority.
The target of the whole reform is to allow for the narrow-ing of the gap between citizens and the decision-maknarrow-ing process and for their greater participation in this process, for a better identification of the problems, for the better meeting of needs and for citizens to assume greater respons-ibility in the management of public affairs, resulting in a lessening of the concentration of the political power of central state authority.
Starting Position and Guidelines for Decentralization.
Although the need for decentralization was considered from the very beginning of the shaping of public administration in the Republic of Croatia, and although some steps were made in that direction early on, a more serious decision about reform was taken only in 2000, and the first moves were conducted in 2001.
The situation at the beginning of 2000 is as follows:
1. Central state administration is defined by the Act on the State Administration System, the Act on the Government of the Republic of Croatia, the Act on the System and Competence of the Ministries and State Administrative Organizations, the Act on State Officials and Employees and on the Salaries of the
Bearers of Juridical Authority, and by a string of other special laws and secondary legislation that defined specific areas of activities of state administrative bodies.2 The state administration system includes administrative bodies and organizations which the Government of the Republic of Croatia, as the highest state political-administ-rative body, directly guides and connects.
These bodies are also directly, or through the Govern-ment of the Republic of Croatia, connected to the highest bearers of political authority in the state—
the Parliament and the President of the Republic.
The bodies of the state administration are ministries (17), state administrative organizations (10), County Offices (9–11 in each county) and the City Office of the City of Zagreb.
State administration affairs include the direct applica-tion of laws (the resoluapplica-tion of administrative cases, managing inquest registers, issuing various certificates, and conducting other administrative and professional affairs), enacting regulations for the implementation of laws, conducting administrative supervision and other administrative and professional affairs.
From the point of view of administrative fields (portfo-lios), state administration affairs could be classified as:
a) traditional state-authority portfolios: defense, in-ternal affairs, foreign affairs, justice and finance, b) economic portfolios: the economy, agriculture and forestry, development, immigration and re-construction, and tourism,
c) technical services: maritime affairs, transport and communications, and science and technology, d) communal services: environmental planning,
const-ruction and housing,
e) social services: culture, education and sport, labor and social welfare, and health,
f ) Special portfolios: care of the veterans of the Croatian War for Independence.
2. The local self-government system comprises 421 municipalities, 122 towns, 20 counties (which are at the same time local administration units) and the City of Zagreb (a special and unified territorial unit with
the Republic of Croatia, the Act on Financing the Units of Local self-government and Administration, and the Act on the Definition of Affairs within government Competence of the Units of Local self-government and Administration.3
Local self-government affairs include environment planning and the arrangement of settlements, com-munal activities, environmental protection, pre-school education, culture, sport and social welfare.
The competence of a county involves mostly the affairs of harmonizing the interests and positions of muni-cipalities and towns within its territory, as well as equal development for both.
For seven years (from 1993 to 2000), competence for fire departments and cable registries has belonged to the local self-government scope of affairs after having been transferred from the state administration.
However, this transfer was not accompanied by an appropriate increase of revenue with which local self-government units could finance these affairs.
The general assessment of public administration in the Republic of Croatia at the beginning of 2000 is as follows:
• The state administration system focuses on unity and tends towards centralization, neglecting interests stemming from regional and local differences. This results in its rapid expansion and extreme concentra-tion. It is a heavily centralized, huge apparatus that cannot be flexible and has great difficulties in adapting to the new roles and tasks set before it;
• The uneconomical and large number of local self-government units and employees working in different administrative bodies has an impact on the level of public expenditure, while the centralization of many administrative tasks limits the efficiency of local self-government bodies. At the same time, the existing system of financing local self-government units hampers the development of an efficient communal infrastructure and is not able to meet the basic needs of citizens in terms of health care, social welfare, employment, education, culture and protection of the environment.
125 state administration. Its role should be to identify
situa-tions that cause problems in society, to develop programs for the resolution of these problems, and to implement these programs with the best possible cost-benefit ratio.
Therefore, it is becoming necessary to start as soon as possible the process of delegating administrative duties and transferring relevant administrative organizations and employees from state administration to the wider subsys-tems of the so-called public sector, which would decrease the influence of state authority centers on organizations.
At the same time, within these organizations, the role of hierarchical structures would be decreased, since the focus of integration would be transferred to work methods. In parallel to this, part of the administrative duties should be obviously transferred to local self-government bodies, as these bodies are the closest to citizens.
REFORM GUIDELINES, ACTIVITIES, RESULTS
Guidelines and Initial Activities
The Government of the Republic of Croatia, formed after the parliamentary elections of 3 January 2000, through its action program (hereinafter: Government Program) and within the sphere of its internal policy during the period of its mandate, announced the reform of public administration aimed at decentralization.
The Government Program, among other issues, includes:
• halting the expansion of state administration, avoiding the establishment of new administrative organizations and the employment of new officials and employees,
• horizontal decentralization, delegating certain state administration affairs to autonomous organizations outside the state administration system,
• a critical analysis and assessment of the cost-effective-ness and efficiency of the state administration appara-tus, implementing a program to reduce expenditures and increase savings,
• initiating a process leading to the broad decentraliza-tion and strengthening of the role of local and regional self-government, defining the competence’s of local self-government through a general clause, introducing the principle of subsidiary, increasing the fiscal capacity of local and regional units,
• A gradual transformation of the territorial system, the establishment of a smaller number of regional
units, the coalescence of local self-government units aimed at increasing their capacity and raising the level of cost-effectiveness of local structures.4
In July 2000 the Government of the Republic of Croatia established the Office for the Development Strategy of the Republic of Croatia, as its expert service with the duty to co-ordinate work on preparing, developing and imple-menting the strategic guidelines of the Government Program, to prepare strategic development documents, and to provide the preconditions for the development and implementation of the Project on the Development Strategy ‘Croatia in the 21st Century.’5
The Project on the Development Strategy ‘Croatia in the 21st Century’ (hereinafter: the Strategy Project) comprises 19 different areas related to economic and social life. An expert team was established for every area with the task to draw up a document on the strategy of development for that particular area (‘a separate file’), as part of the total strategy of the development of the country. The Strategy Project has its Central Council that is presided over by the Deputy Prime Minister of the Republic of Croatia as co-ordinator of the development of the strategy, while its members are leaders of individual specific areas.
After the expert team has prepared the text of a proposal of a separate file for a particular area, the text is published on the Internet where it can be accessed by interested institutions and all citizens.6
Various forms of public debate on the text of a separate file are held (presentations, forums, round-tables) where ministries competent for the area in question and interested persons can participate.
It was envisaged that, once the final texts of all the separate files were completed according to the mentioned procedure, the Government would accept them all as a single document on the total development strategy of the Republic of Croatia, and would send the document to the Croatian Parliament for adoption by the end of 2001. However, since the separate files for some areas have not yet been completed, the Government has decided to receive each of the separate files individually as they are completed and send them in that order to Parliament for adoption.
The texts of some separate files dealing with certain areas contain an orientation towards the decentralization and
‘de-statization’ of certain tasks that are currently carried out within the scope of state administration. Such an
D E C E N T R A L I Z A T I O N O F P U B L I C A D M I N I S T R A T I O N I N T H E R E P U B L I C O F C R O A T I A – R E F O R M P R O C E S S M A N A G E M E N T
orientation is particularly dealt with in the separate files dealing with public administration, social welfare, educa-tion, and health.
In November 2000 the Government of the Republic of Croatia and the Open Society Institute—Croatia (here-inafter the OSI) concluded an Agreement on Co-opera-tion, part of which deals with the decentralization of public administration.
On the basis of this Agreement, a contract on the imple-mentation of the project ‘Decentralization of Public Ad-ministration’ (hereinafter: CLC Project) was concluded between the OSI and the Croatian Law Center (herein-after: CLC).
The CLC Project deals with issues that regard the formula-tion of the aims of the decentralizaformula-tion of public administ-ration and with the specific actions necessary for opening up a dialogue with local self-government and the citizens as end-users of the public administration reform.
The CLC Project covers several specific areas:
• the electoral system for local elections,
• the territorial organization of local and regional self-government,
• the legal status and competence’s of local self-govern-ment,
• the status of local officials,
• the decentralization of primary and secondary edu-cation,
• the decentralization of health care,
• the decentralization of social services,
• decentralization in the field of culture and
• the financing of local and regional self-government.
A special expert team was created for each area. The expert teams are made up of lawyers, political scientists, econo-mists, and experts in public finances, sociologists, historians, geographers, statisticians and experts in relevant areas of public services. The work of the expert teams is co-ordinated and directed by the Expert Council. About fifty experts are involved in the work, while representatives of government and non-government institutions, and representatives of local and regional self-government are involved in the implementation of the project.
members are representatives of the OSI, the Government of the Republic of Croatia, and the CLC supervise the implementation of the CLC Project.
For each individual area, the project includes: an analysis of the situation and an identification of problems, a pre-paration of proposals for an appropriate policy7 and al-ternative models, a legitimization of the proposals (through different discussions with various bodies), the adoption of the proposals and their application, and an evaluation of the results and success ratio.
In addition to this, starting from the beginning of 2000, a number of other partial programs have been introduced, consisting of individual areas where the decentralization process should be conducted. These programs are carried out by different domestic and foreign entities, receiving various levels of support and co-operation from state bodies, or are performed completely independently.
These projects are as follows:
1) Project on the Reform of Social Security—Ministry of Labor and Social Welfare of the Republic of Croatia, the World Bank and the DFID (UK),8
2) Fiscal Decentralization Project—Ministry of Finance of the Republic of Croatia, US AID and Barents Group LLC (USA),
3) Project of Technical Assistance in Formulating Frame-works for the Conceptualization of the Regional Policy of the Republic of Croatia (within the OBNOVA Program)—Ministry of Public Works, Reconstruction and Building of the Republic of Croatia and the Euro-pean Union,
4) Public Expenditures Analysis—Ministry of Finance of the Republic of Croatia and the World Bank, 5) Local Financing and Local Budgets in the Republic
of Croatia—the Institute for Public Finances (Croatia) 6) Project on the Reform of Local self-government and
Administration—The Urban Institute (USA).