This is the presentation delivered by Isabelle Chatry at the report launch workshop: Decentralisation and Regionalisation in Bulgaria - Towards Balanced Regional Development, on 23 February 2021.

1. LAUNCH OF THE OECD MULTI-LEVEL
GOVERNANCE REVIEW OF BULGARIA
Tuesday 23rd February 2021
Key highlights and
recommendations from the
OECD Report
Isabelle Chatry
Project Manager, CFE, OECD

2. • The report draws from a dialogue with
MRDPW, interviews conducted with
key stakeholders, the outcomes of an
international workshop organised in
Sofia and international experiences
and best practices from several OECD
and EU countries.
• The report has 3 main parts:
– Part 1: context for the report, in
particular a diagnosis of territorial
disparities;
– Part 2: an in-depth analysis of
Bulgaria’s multi-level governance
system for regional development;
– Part 3: possible avenues to reform
the Bulgarian multi-level
governance system.
Structure of the OECD report

3. • Most Bulgarian regions remain among
the poorest in Europe.
• South West region performs better than
the other regions. Within it, Sofia
Capital district appears as an “island of
prosperity” concentrating a large share
of the national prosperity.
• The gap between South West/Sofia and
the others areas has increased over the
years, despite active regional
development policies and EU Cohesion
Policy funds.
• Cities, such as Plovdiv, Varna and
Burgas, are emerging as regional
economic centres and might be able to
rebalance this trend towards
concentration in the capital region.
Territorial disparities are large and increasing
>> Among the different factors
contributing to these disparities, is the
centralised approach of regional
development.

4. • Bulgaria made significant efforts after
EU accession to implement a regional
development policy that fosters a
territorialised approach, but more
remains to be done in this regard.
• Since the early 1990s, Bulgaria has
travelled a long road towards
decentralisation, with fits and starts,
but this process has not produced the
expected results. Bulgaria remains a
centralised country in many areas.
Despite efforts for more place-based policies and
governance, the Bulgarian governance system
remains mainly centralised
Level 1 – Capital
Level 2
Level 3
Level 3 to 2 (compared to current state)
Level 4 to 3 (compared to current state)
Level 4
Level 5 to 4 (compared to current state)
Level 5
Baseline
(current)
Moderate
polycentric
(2020)
Develope
d
polycentr
ic (2030)
National Concept for
Spatial Development
2013-25 (NCSD)
Restoration and
consolidation of
local democracy
Progress
towards fiscal
decentralisation
A more
comprehensive
“strategy for
decentralisation
”
A new
Decentralisation
Strategy 2016-
2025
1991-2001 2002-2005 2006-2015 2016-2025

5. • Fiscal decentralisation is the weakest dimension of the Bulgarian decentralisation
process.
• Effective administrative decentralisation has also been limited, and is undermined
by weak municipal administrative and strategic capacities.
• While political decentralisation provided democratic legitimacy and accountability to
municipalities, local democracy needs to be strengthened within municipalities.
Municipal governance faces several challenges in
fiscal, administrative and political decentralisation
Subnational government tax revenue in Bulgaria and in the EU member states, 2018
Bulgaria
Bulgaria

6. • On paper, districts are an integral component of the state territorial
administration, particularly for regional policy. In practice, they have insufficient
authority, human capital and financial resources to carry out their mandated
roles.
• The six planning regions are “territorial units”. They do not have a legal status
and thus are not equipped to develop regional development policies.
Regional governance could be more effective at
the district and planning levels
The Bulgarian
multi-level
government
system:
two
deconcentrated
regional levels

7. Effective
horizontal
and
vertical
coordination
mechanisms
Reconfiguring districts responsibilities and scope
Reinforcing human and financial capacities of the districts
Which territorial organisation for the districts?
Providing a legal personality to planning regions
Choosing a governance model
Setting up governance structures
Defining responsibilities and functions
Providing human and financial resources
Making multilevel governance work for better
regional development in Bulgaria
Improving
municipal
governance
Strengthening
districts as
state territorial
administration
Strengthening
planning
regions as
regional
development
bodies
Administrative
decentralisation
• Improving the assignment of responsibilities
• Investment: more room to manoeuver, more MLG
• Administrative and strategic capacities
• Inter-municipal cooperation & metropolitan governance
Fiscal
decentralisation
• Reforming the grant system to ensure adequacy and
flexibility
• Towards a local tax reform
• Improving equalisation mechanisms
• Access to external financing (borrowing) and PPPs
• A sound fiscal framework and financial management
Political
decentralisation
• Reinforcing intra-municipal decentralisation
• More civil society participation practices, transparency
and accountability
Fostering
a
place-based
approach
to
regional
policy

8. • The 2016-25 decentralisation strategy
should better link decentralisation,
regionalisation and regional
development
• A new implementation programme for
2021-2025 should be prepared
• To maximize its success, efforts should
focus as much on content as on
implementation:
– Towards a more comprehensive and
participative approach
– Reactivating the Council for
Decentralisation of State Governance
(CDSG)
• Effective multi-level governance
coordination mechanisms among levels
of government should be established
Revisiting the 2016-25 decentralisation strategy
2016-2025
Decentralisation
Strategy
Regional
development
Regionalisation
Decentralisation

9. • Intra-municipal
decentralisation
(mayoralties, wards
and villages)
• Civil society
participation
• Assignment of
responsibilities
• MLG of public
investment
• Administrative and
strategic capacities
• Quality and efficiency
of municipal services
• Effective use of
internal and external
resources with
integrity
• Inter-municipal
cooperation in rural,
urban and
metropolitan areas
• A fiscal
decentralisation
strategic framework
• Grant system reform
• Local tax reform
• Fiscal equalisation
mechanism
• Borrowing and
public-private
partnerships for
public investment
• Fiscal discipline and
local financial
management
Improving municipal governance
Political
decentralisation
Administrative
decentralisation
Fiscal
decentralisation
OECD’s 10 Guidelines
for Effective
Decentralisation

10. Effective
horizontal
and
vertical
coordination
mechanisms
Reconfiguring districts responsibilities and scope
Reinforcing human and financial capacities of the districts
Which territorial organisation for the districts?
Providing a legal personality to planning regions
Choosing a governance model
Setting up governance structures
Defining responsibilities and functions
Providing human and financial resources
Making multilevel governance work for better
regional development in Bulgaria
Improving
municipal
governance
Strengthening
districts as
state territorial
administration
Strengthening
planning
regions as
regional
development
bodies
Administrative
decentralisation
• Improving the assignment of responsibilities
• Investment: more room to manoeuver, more MLG
• Administrative and strategic capacities
• Inter-municipal cooperation & metropolitan governance
Fiscal
decentralisation
• Reforming the grant system to ensure adequacy and
flexibility
• Towards a local tax reform
• Improving equalisation mechanisms
• Access to external financing (borrowing) and PPPs
• A sound fiscal framework and financial management
Political
decentralisation
• Reinforcing intra-municipal decentralisation
• More civil society participation practices, transparency
and accountability
Fostering
a
place-based
approach
to
regional
policy

11. • Districts should be reformed to
accompany the decentralisation process,
and adapted to the new proposed role of
planning regions
• Reconfiguring district responsibilities
– Enhancing vertical and horizontal
coordination among levels of
government
– Developing administrative and
budgetary control of municipal activities;
Improving regional governance:
Reinforcing the role of the districts as state
territorial administration
• Reinforcing human, technical and financial capacities of the districts
• Rationalising and consolidating the fragmented territorial units of the
central administration at the district level
• Conducting a review focusing on the territorial organisation and boundaries
of future districts
Source: National Statistical Institute

12. Type 4: Regional governments / elected regions
Type 4a: Decentralised regions
E.g.: France, Italy, Poland, Greece, Sweden, Slovakia,
Czeck Rep., Norway, Netherlands, etc.
Type 4b: Regions with legislative powers:
E.g.: federal countries, Finland, Portugal, UK
Type 3: Mixed/Hybrid regions
Both deconcentrated and decentralised bodies
E.g.: Turkey, Chile (until 2021)
Type 2: Regional associations of municipalities
“cooperative regions”
E.g.: Finland, Ireland, Iceland, Latvia
Type 1: Statistical/planning regions
Type 1a: Without administrative status
E.g.: Bulgaria, Lithuania, Slovenia
Type 1b: With administrative status
E.g.: Portugal
Regional governance: a typology

13. • Number, identity and regional capitals
• Review planning regions’ functions: spatial
planning, regional development and
management of EU funds, including selection,
funding, implementation and
monitoring/evaluation of projects.
• Provide adequate financial resources, skilled
staff and modern tools (e.g., an efficient IT
system, performance indicators).
• Involve the private sector, NGOS and citizen in
the Regional development councils as
permanent members to support the partnership
principle.
Improving regional governance:
Strengthening the planning regions as regional
development public bodies
Source: National Statistical Institute
• Provide planning regions with a permanent administration.
• Provide planning regions with financial resources. The extent of available resources would
vary according to Scenario 1 or 2.
• Enhance planning regions’ capacity through training, peer-learning and networking.

14. Благодаря ти!
More information: https://www.oecd.org/regional/multi-level-governance.htm
OECD Council Recommendation
on effective public investment
across levels of government
Subnational governments
in OECD countries: key
data
Multi-level governance reforms:
overview of OECD countries
Key data on Local and regional
governments in the European Union
Making
decentralisation work:
A handbook for policy
makers
Report of the World
Observatory on Subnational
Government Finance and
Investment SNG-WOFI