Summary ofCase Studies

130 Alta Fölscher

positive and sustainable impact (Abers 2003;Goetz and Gaventa 2001).What institutional environment do local governments in the region face? What capacity do citizens and nonstate actors in the region have to participate in participatory budgeting?

The Institutional Environment ofLocal Governments

Despite an improving legislative environment for local government,in most ofthe case study countries,policy implementation occurs within an ambiguouslegal framework in which roles and responsibilities are unclear.Local governments have limited authority over and limited discretion in their expenditure responsibilities,both because oftheir weak fiscal capacity and because ofthe intergovernmental system.In some countries the roles oflocal governments are not clarified through the further development at lower levels ofthe national framework legislation.Most countries also lack legislated mechanisms for participation (a notable exceptions is Bulgaria [box 4.1], where national legislation elaborates the mechanisms for participation). Conflicting provisions in different legislative instruments are also common. This results in ambiguous legal frameworks in Albania (Banks and Pigey 1998;Urban Institute 2004);Armenia (Doane,Simpson,and Rabenhorst 2000);Bulgaria (Novkirishka-Stoyanova 2001);Moldova (Viitorul 2004); Poland (Levitas 1999);the Russian Federation (Krylova 2005a;Savranskaya 2003);and Ukraine (Krylova 2005b).

In all countries in the region,the principle oflocal self-government is a driving factor in the framework legislation.Many countries are signatories to the European Charter ofLocal Self-Government,which envisages local governments as independent,autonomous local organs ofgovernment elected through equal universal suffrage and with meaningful provision for citizen participation in decision making.

In practice,local governments remain constrained in carrying out their public service delivery functions.Expenditure responsibilities are not matched with revenue capacity.Local governments are assigned very few taxes,and even then the rates are often set by a different level ofgovernment. Local taxes,particularly land and property taxes,are often difficult to assess and collect.The transfers from shared revenue sources,such as income tax, are not transparently assigned or reliable.

In many countries the first (municipal or village) or second (typically rayon [regional]) levels oflocal government have delegated expenditure functions for which they are accountable to state or national functional departments ofexpenditure.Local government budgets are reviewed or