Strengthening the Determinants of the Local Government Capacities for the Successful PPP Implementation in the Western Balkans

The chapter focuses on the analysis of the determinants of the public-private partnerships (PPP) institutional framework, with a particular attention to function, roles, and activities of PPP units in general and in the Western Balkans in particular. The main hypothesis is that the central PPP unit’s ability to deliver its ‘services’ stipulated by national laws is directly related to the organisation and capacity of the local level entity/authorities to receive such an impact, as well as to give proper reaction in terms of the implementation of the PPP project. This relates not only to project preparation, but also to service delivery, and it refers to both the functional and organisational capacity of local governments to transpose national economic development plans into local development strategies. Clear allocation of resources and identification of roles and responsibilities between the central and local levels are needed to boost economic growth and competitiveness in relatively weak Western Balkans economies. Due to the fact that central budget and extra-budgetary funds are not sufficient sources of capital investment financing, local governments have to be prepared to serve as facilitators of capital investments at the local level. This does not necessarily mean increasing the size or the complexity of the organisation, but rather making the necessary adjustments to existing processes and upgrading the role of local authorities in project design, negotiation and monitoring of service delivery. Based on comparative experiences from selected developed countries, our analysis is focused on the countries of the Western Balkans region, where PPP implementation is in its embryonic stage: Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Albania, and FYR Macedonia. Each of those countries has introduced PPP legislation and created central PPP units. We argue that strengthening the role of local administration and creating functional relationships between the central and local levels, as well as the local level and the stakeholders, would contribute to the successful implementation of investments at the local level and regional development.