The policy brief underlines the importance of proper governance of public finances, especially in countries with rule of law deficiencies. The analysis notes that intergovernmental transfers in Southeast Europe (SEE) are used to secure or change the political allegiance of mayors, build central and local leaders’ reputations, secure votes and re-election. The problems created by preferential fiscal transfers are further exacerbated by irregularities in local procurement. Statistical evidence indicates that when municipalities are politically aligned with the ruling party at the national level, they tend to receive larger public procurement contracts. SEE needs an evidence-gathering mechanism to detect distortions in national and EU spending programmes caused by clientelist allocation of funds.
Russia’s ongoing war of aggression against Ukraine has intensified existing geopolitical tensions throughout 2022 and into 2023, exposing persistent rule...
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The policy brief underlines the importance of proper governance of public finances, especially in countries with rule of law deficiencies. The analysis notes that intergovernmental transfers in Southeast Europe (SEE) are used to secure or change the political allegiance of mayors, build central and local leaders’ reputations, secure votes and re-election. The problems created by preferential fiscal transfers are further exacerbated by irregularities in local procurement. Statistical evidence indicates that when municipalities are politically aligned with the ruling party at the national level, they tend to receive larger public procurement contracts. SEE needs an evidence-gathering mechanism to detect distortions in national and EU spending programmes caused by clientelist allocation of funds.
