Mark Baskin is Senior Associate at the SUNY Center for International Development and a WWICS Public Policy Scholar. He spoke at an EES noon discussion on January 21, 2004. The following is a summary of his presentation. Meeting Report 291.

Over the past decade, international organizations and development NGOs have broadened their efforts to nurture democratic governance from the centers of power in capital cities to local government. Local government is the first tier of public authority that people confront in their everyday lives. Good local governance provides services to diverse populations, facilitates the development of political institutions and cross cutting social networks and fosters economic development. At the same time, effective local government has the capacity to resolve conflicts at an early stage, preventing them from escalating into violence. In this light, the circumstances enhancing the sustainability of post-conflict local democracy command great interest.

Kosovo provides an excellent place to begin a discussion exploring the role of international agencies in assisting local governance in a post-war environment. Kosovo's local government was freed from Belgrade's direct control at the conclusion of NATO's 1999 intervention. On June 10, 1999, the United Nations Security Council adopted Resolution 1244, which mandated that the UN Mission in Kosovo (UNMIK) establish an interim administration. The international mission was charged with enhancing the capacity of self government throughout the region and with setting up local administrations in 30 municipalities, building their capacity to provide services, promoting reconciliation between formerly warring factions and developing democratic political practices.

A review of developments in Kosovo's municipal governments since mid-1999 suggests that the goal of good governance remains elusive. The post-war period began with six months of open competition over control of municipal administration between the "Provisional Government," led by the Kosovo Liberation Army's political leader Hashim Thaqi, and UNMIK's slowly-deploying international administrators. (No other Kosovar party participated in the provisional government.) An agreement establishing the Kosovo-UNMIK Joint Interim Administrative Structure and Interim Administrative Council was signed by Albanian leaders on December 15, 1999, in the presence of the UN Special Representative of the Secretary General (SRSG) Bernard Kouchner. It was meant to replace the parallel administrative structures with a joint administrative structure and paved the way for the passage of the Regulation on Self Government of Municipalities in Kosovo in August 2000, as well as of further regulations on public service and institutional development.

These regulations on local government set the stage for municipal elections in 2000 and 2002. In 2002, the Democratic League of Kosovo won majorities in 19 municipalities, the Democratic Party of Kosovo won in seven municipalities and the Alliance for the Future of Kosovo won one municipality. Between the two elections voter turnout declined from 79 percent to 54 percent. Kosovo's Serbs did not participate in the 2000 elections and, in 2002, only 20 percent of Serbs participated—predominantly in municipalities where they constitute a majority.

The greatest obstacle to good local governance lay in uncertainty about Kosovo's present and future. Uncertainty in Kosovo stems, first, from the absence of genuine security for all citizens in Kosovo. To be sure, the Kosovo Police Service (KPS) is one of the more successful efforts at institution building in post-war Kosovo. Minorities are well represented in the service and KPS officers are willing to take multi-ethnic patrols and to speak a non-native language in appropriate situations. However, uncertainties abound. It is not certain that the KPS will be deployed as a multi-ethnic institution in northern Serb-majority municipalities; that it will obtain the necessary additional investment in forensic equipment to improve its investigative capacity; that its training center in Vushtrii/Vucitrn will sustain its current high quality when it its funding is shifted from international sources to the Kosovo budget in the near future; that KPS salaries will be sufficiently increased so as to enable the police to resist corruption; or that the KPS is being well-trained to take on the sensitive tasks currently part of the SRSG's reserve powers in the Justice Pillar. These tasks include dealing with international networks of organized crime, occasional and high profile violence against minorities, economic crime and public corruption and attacks on the police itself. These tasks are made more complex by the fact that municipal officials have little say in the work of police in their municipalities. In a sense, the most difficult work in establishing security and rule of law lies ahead.

In addition, the political uncertainty over Kosovo's future status further colors all aspects of social, economic and political development in Kosovo. To ethnic Albanian leaders, the attainment of independence and sovereignty is central in all their public activity, while ethnic Serb leaders strive to retain links between Belgrade and Kosovo. Kosovo's uncertain status has provided the backdrop to local government, e.g., in controversies over which flag to fly over public buildings in 1999 or over the retention of administrative personnel hired in municipalities after 1990.

Efforts to attenuate this political uncertainty have turned to the establishment of benchmarks and standards. UNMIK formulated the "standards before status" policy, in which Kosovo's governing institutions prepare for the resolution of the province's political status through concrete achievements in areas such as democratic institutions, rule of law, returns and reintegration, property rights and dialogue with Belgrade. In December 2003, UNMIK adopted a set of standards with which to evaluate the achievement of benchmarks and set up working groups to track institutional performance.

Serb and Albanian leaders have differed sharply over these developments. As long as the achievement of benchmarks represents an impediment to resolving Kosovo's political status, Serb politicians have lent considerable support. However, as the standards were transformed into a bridge to resolving Kosovo's political status, Serb officials in Belgrade and in Kosovo rejected them as unacceptable as a framework for resolving the autonomy crisis. As of mid-February 2004, they refused to participate in the working groups for several months. Furthermore, the UN has reported that parallel Serb structures in virtually all municipalities in Kosovo hamper legitimate institutions by providing Serbs with salaries and services, such as insurance, pensions, child support, license plates, ID cards, passports and other documents directly from Belgrade. In short, Serb leaders have attempted to reduce uncertainty by strengthening their ties to Belgrade.

Albanian leaders have maintained that resolving Kosovo's political status is essential to its stable institutional development. Since UNMIK retains control over the achievement of several benchmarks, Albanian leaders have proposed a policy of "standards parallel to status," in which they are judged for areas for which they have full responsibility. They view the adoption of standards as a step towards Kosovo's independence in its current boundaries. At the same time, the current Albanian political leadership has not demonstrated readiness to eschew symbolic declarations of independence and improve technical capacity in administration and local government. They reduce uncertainty by remaining focused on struggles for symbols (against the Serbs) and for power (against each other). The failure to define common political principles and methods for both Serb and Albanian political leaders has enhanced uncertainty in the near term.

Predictably, uncertainty is bad for business, which means that Kosovo must import nearly all its consumer goods. The economy can only support the cost of one-fifth of its imports, leaving the region highly dependent on foreign aid and émigré remittances. The UN and EU have failed to accelerate privatization, and have been unable to create a coherent legal framework for business development. High tariffs for raw materials and semi-finished goods (at 26 percent) penalize Kosovar producers, and for those that manage to overcome these barriers, the UN and EU have done little to expedite exports to Europe.

Confusion over control of public services adds to the uncertainty. Local officials have trouble coordinating the management of public service providers and utilities. Many areas, such as the Zhupa Valley in Prizren municipality—with substantial numbers of Bosniacs, Gorani and Serbs—remain without telephones, public electricity, garbage systems or sewage. Kosovo's municipalities have only provided 11 percent of the revenues in their budget and they do not have the right to transfer resources from centrally earmarked grants between sectors. Far from a ‘peace dividend' for the public good, Kosovo's local economies enable corrupt officials to accumulate wealth by transforming public goods (and international subsidies) into private and personal goods.

Mechanisms of political choice provide little relief. Local institutions are burdened by Kosovo's proportional system of local election in which voters select from closed party lists. This has made local governments dependent upon central party leaderships, diminishes political accountability associated with constituency-based politics, strengthens the one-party character of individual local governments and renders inter-party compromise more difficult. For example, it took over five months to break the political deadlock and form governments in one-third of Kosovo's municipalities following October 2002 elections. Members of the opposition often boycott the assemblies and one mayor did not convene the assembly for well over five months in 2003.

Administrative performance is similarly weak, even after years of training by OSCE and working alongside the UN's international administrative officials in municipalities. The UN has reported on the "general lack of professionalism," the politicized character of procurement and recruitment and on the failure of local administrations to implement municipal regulations. Local institutions in Kosovo lack technical competence and political inclusiveness—both essential for creating effective local governments. A weak sense of public good and civic ethos creates an environment conducive to administrative and political malfeasance. An otherwise well-developed media generally prefers to comment on foibles of international and Kosovar leaders, rather than to investigate and report on local corruption. Nascent Kosovar watchdog organizations have yet to develop the capacity to monitor the private activities of public officials, in the manner of the International Crisis Group or European Stability Initiative.

Moreover, Kosovo's local governments have not developed self-sustaining mechanisms for conflict amelioration. Although minorities are given a special place in UNMIK's mandate and plans, the local administrations have failed to distribute "fair-share financing" adequately to minorities. Minority employment remains well below the targets of 18 percent. The mandatory Community and Mediation committees, which address interethnic conflict, have not functioned effectively in any of the municipalities. The brightest spot in this picture may lie in the capacity of UNMIK's Kosovar "local community officers," who assist minorities to resolve a range of administrative problems. These officers are conscientious and well informed. They are most effective in areas with non-Serb minorities—Turks, Bosniacs, Roma, and Gorani—whose political leaders have displayed a political commitment to Kosovo's provisional institutions and in Serb communities that are not contiguous with the northern, Serb-dominated municipalities (e.g., in Orahovac). Their effectiveness increases with political certainty.

The problems of uncertainty in Kosovo have not gone unnoticed. A Council of Europe mission spent nine months developing a comprehensive reform plan that would further decentralize local government and strengthen local community organizations. Except for the extensive interviews conducted with Kosovar officials, the plan was developed wholly by international officials. It is no surprise, therefore, that local Albanian leaders have been critical of the proposal and that the UN continues to review the plan. Nor is it certain that the plan provides an effective local approach to Kosovo's multiple legacies of authoritarianism, violent ethnic competition and economic distress.

The most effective approach to improving local government in Kosovo is to reduce uncertainty and improve the technical capacity of local officials. Unfortunately, the broader political settlement that would decrease uncertainty and ethnic competition and create a better foundation for institutional reform and economic development is not on the international agenda (at least until mid-2005). For now, international and local authorities ought to focus on electoral reforms in order to produce politicians that are accountable to real, local constituencies and not just the narrow party leaderships. Second, international aid groups should focus on administrative reform and on building the technical capacity of local government.