Case Study Serbia

Municipal Support Programme (MSP)

Topic: Capacity Development - Inter-Municipal Work Group (IMWG) for financial issues

Belgrade, 25th November 2011

Municipal Support Programme and Swiss Cooperation Office Serbia
Peer-review: Kosovo, Macedonia

Video Intro
Have a look at the video intro to get an overview of the case study and its contents.

Fact sheet

1. Context

1. In the process of transition, Serbian municipalities have been gradually taking over competencies from the central level based on the government’s decisions. In 2007, the Government of Serbia continued with reforms towards decentralization in terms of adopting new legislation that better governs the position of local self-governments, regional development and the issue of fiscal decentralization. At that time, these laws represented opportunity and challenges for both central and local governments as they both lacked capacities to implement the reforms. Originally, the local governments have not doubted that reforms and further competence devolution are needed. Municipalities are in charge of wide range of different tasks. Besides general administration, municipalities are also responsible for: public security, education, culture and sport, health protection, social welfare, traffic and other infrastructure, environment and spatial and urban plans, local economy and public finances.
2. In terms of economic factors, the international financial crisis and the accompanying domestic economic crisis have inflicted additional damage to already weak Serbian economy, the consequences of which have been most visible on the local level. The social situation followed the developments in the economy, as more and more people grew poor following bad economic performance of Serbia. Failed privatizations (25% of all privatizations) left many companies closed or bankrupt, resulting in a number of redundancies and posing an additional burden to the public budget. The central government responded to crisis by cutting transfers to the municipal budgets by 30-40% in average (transfers made 25-50% of municipal budgets), which has reduced the willingness of municipalities to accept new competencies, especially those without commensurate budget. Dynamics of foreseen transfer of competencies was, therefore, jeopardized. Although difficult to implement in the time of crisis, decentralization does not have any alternatives. The municipal administrations had to be closer to the citizens and compensate social costs of the crisis. This of course has financial implications, meaning that more funds needs to be allocated to the municipalities. A pre-condition of enlarged transfers should certainly be full transparency of the local municipal budgets within the state system. Consequently, Law on Budget System (2007) governed the issue of internal state audits, which is believed to generally contribute to a higher transparency of the public administration.
3. In this situation the challenges were to:
• Help the municipalities build their capacities to become transparent, accountable and efficient vis-à-vis their citizens and the central government
• Support local governments in increasing their own capacities for financial management and performance by attracting more external funding, increasing tax collection rates, etc.
  
4. Recognising the crucial role that local governments play in addressing challenges of recovery and transition in Serbia after the political changes of October 2000, SDC initiated a programme of “quick-start” municipal projects, as prelude to the Municipal Support Programme (MSP). The first phase of MSP lasted from November 2001 to April 2004, the second from May 2004 to April 2008. In the phase III, MSP has sup-ported its partners in three programme areas: (i) municipal governance, (ii) municipal management as well as (iii) inter-municipal cooperation and regional development. The team works by facilitating cooperation and networking among relevant stakeholders, providing access to technical assistance and capacity building and supporting project cycle management at municipal level. Financially important is the co-financing of projects in the municipalities. Projects eligible for support have to be grounded in strategic documents (municipal development plans, sector strategies, etc). The selection process is based on a set of criteria and follows the annual management cycle (programming and budgeting process); co-funding is limited from 40 to 60%.
5. With this case study, we (SCO Serbia and MSP) would like to share our experience of linking municipalities in networks in order to improve capacity building, especially in financial management. This network plays all roles mentioned in the concept paper: (i) lobbying and advocacy for members in relation to central government and donor; (ii) providing services to members such as trainings, problem solving, information; (iii) dissemination of good practices. This has been done for the purpose of identifying the needs for support and consequent lobbying of municipalities for their interests in the respective fields that took place. Networking has been achieved through Intermunicipal work groups designed by the MSP team. Case study describes an instrument both for the networking and capacity building of local self governments in area of financial management and fiscal decentralization. The paper will elaborate network development tool as a part of capacity development subtheme described in the KEK CDC document “Donor Support to Sustainable Municipal Finance – A Survey of the International State-of-the-Art”  [1]. Although the Inter-Municipal Work Group mentioned in this paper happens to deal with municipal finances, the paper does not address this issue directly.

2. Activities and approaches

1. In Western Balkans the donor community has provided support to the Standing Conference of Towns and Municipalities as a form of capacity/ network development. The similar practice was carried out in some other countries of South-East Europe. These associations were again linked to a regional network called Network of Associations of Local Authorities of South-East Europe (NALAS)  [2]. Inter-municipal Work Groups represent a slightly different form of network development. They gather fewer members with a purpose of in-depth dialogue among those members, looking for solutions tailored to their needs and immediate concerns. One of the ultimate goals for the municipalities to achieve in the decentralization process is a sustainable municipal finance system. Although the government is to certain extent aware of the local administration needs in decentralization process, respective trainings and capacity building from the central to the local level did not happen per se unless actively advocated by the local level. The MSP was to furnish support that would allow for such development. In other words, centrally dependant local finance systems had to be upgraded to empower local administration to collect taxes, manage finances and adhere to project oriented municipal budgeting. In embarking to this process, one dimension was to strengthen working relations between the local and central levels, which is a common and logical practice for all countries striving towards decentralization. In addition, transfer of knowledge from the central to the local level was a precondition for municipalities to build financial management capacity. The shortcoming of the government was reflected in insufficient capacities to detect local needs and address them. The MSP was in a good position to provide the lacking support to targeted municipalities. The MSP was seen as a facilitator to this process in the 7 municipalities of Central Serbia. Therefore the outcome hypothesis was twofold: Municipalities are in a better position to resolve financial management issues through networking and exchange of know-how, and stronger in representing their interest at the central level. Intention was to strengthen working relations between the local and central levels, which is a common and logical practice for all countries striving towards decentralization. In addition, transfer of knowledge from the central to the local level was seen as significant support to municipalities in building financial management capacity.
2. The MSP acted as an instigator of the inter-municipal cooperation. This was supposed to lead to exchange of valuable experience between the municipalities and in the region, in particular related to the practical solutions of implementing regulations now delegated from the central level. Idea to build inter-municipal work groups (IMWGs) as instruments that would facilitate dialogue between municipalities on specific topics and strengthen joint position of local governments vis-à-vis central level, especially when it comes to lobbying for their interests, came from the Swiss-Serbian legal expert team Prof. Walter Kaelin and Prof. Stevan Lilic, who were behind formation of the IMWG that tackled legal issues within MSP. This model was replicated for the IMWG on financial issues.
3. The IMWG Financial Management/ Fiscal Decentralization (IMWG FM/ FD) is com-posed of two members from each municipality, including one representative from the municipal administration responsible for financial management, and the second municipal professional is invited to IMWG sessions depending on discussion topic and area of her/his competence. Both members have the voting rights, and one of them served as a coordinator within the municipality and with the MSP. Additional members were representative of the Financial Committee of the Standing Conference of Towns and Municipalities, MSP staff member and respective MSP consultant-expert related to the issue discussed. Additional members did not have voting rights. Regardless of political party affiliation, the IMWG became fora where municipalities assisted each other in resolving problems.
4. In its work with the municipalities, the MSP respected their needs, i.e. the approach was demand driven and tailored to local priorities. The MSP constantly lead dialogue with other donors and maintained presence in the field of intervention, so as to avoid possible duplication of assistance and best use available resources of the beneficiaries. The MSP engagement was in alignment with enacted national legislation and de-centralization agenda, and the focus was on the work with local administration structures.
5. "Love to see" result of MSP was the creation of strong network between partner municipalities themselves and with other relevant institutions/organizations. At the beginning being promoted with the main purpose of MSP programme implementation, the IMWG for financial management and fiscal decentralization started to be recognized as strong and professional semi-institutional group of professionals. As the IMWG was a technical body, it was mainly dealing with resolving technical problems important to municipalities. Its authority was based solely on its ability to address concrete issues, thereby avoiding politicization. In last stages the IMWG starts to be recognized as a regional experts’ network supported by the leadership of local governments and accepted as relevant partner by many institutions at regional and central level. Support of the local governments was won thanks to the professional reputation of middle management officials participating in the IMWGs and beneficial results rather than working directly with political parties. Its lobbying capacity is noticed only at later stages. Usually, after elections middle management manages to retain positions within the municipal administration, while the political top is changeable.
6. Main characteristics of IMWG as network are flexibility and easy adjusting to context, openness for cooperation with all relevant stakeholders, readiness to share and disseminate experiences and knowledge, etc. There are several IMWG’s among them the IMWG for financial issues. The beneficiary municipalities will decide on sustain-ability of these groups after the programme arrangement between the SDC and MSP ends. Several options for sustainability are pursued. The Regional Development Agencies (RDA) can take over the tasks of coordination and organizing some IMWGs, as there are currently two RDAs working in the region. Another option is that municipalities themselves are placed in charge of the IMWGs, operationally and financially. The third option is that the municipalities remunerate the MSP Ltd. (now in-dependent private company) for arranging IMWGs’ operation. Each of the options has its prospects and consequences, and has to be adopted by the local parliaments in the form of decisions.

3. Experiences

MSP experiences refer to the context, programme challenges and given framework and implementation of IMWG concept in area of local finances. Programme strategy was designed in such way to bring together opportunities of the IMWG as a new tool, to provide adequate support to professional needs and implement activities under low level of decentralization. Following experiences are relevant:

1. Back in 2005, when the government decided to repeal Turnover and Services Tax and introduce Value Added Tax local administrations were facing a difficult situation. In the previous taxation system, the municipalities knew their share in collected taxes, and were able to precisely plan income part of the budget. Now that the VAT was introduced, municipalities became dependent upon unpredictable transfers from the central level as income formula was no longer predetermined. Consequently, this could have resulted in higher uncertainty of income, inability to plan and deliver ser-vices to citizens, and to the overall development performance of the municipality. In addition, overall accountability of the local government to their citizens would become subject of concern.
2. All MSP municipalities recognized that it was in their direct interest to discuss tax re-structuring issues within the newly established IMWG for financial issues. Financial capacities represented a common problem for all of the municipalities, therefore a political consensus was not a challenge. By working through the IMWG, municipalities identified gaps in their incomes due to substitution of two different models of taxes. The original idea was to recover the income loss by increasing the municipal share in income tax, therefore securing reliable source of revenues. One of the first assignments of IMWG FM/FD for financial issues was to replace the former Turnover and Services Tax with another transparent, reliable and sufficient source of income. Upon consulting in the IMWG, the financial experts came with a proposal that existing legislation should be amended so as to further specify income arrangement towards municipalities.
3. The Standing Conference of Towns and Municipalities (SCTM), i.e. national association of municipalities, whose representative participated in the work of this group approved of the idea and quickly established its own working group which was supposed to draft a model of a new law for local finances, in order to incorporate suggestions for a change. The draft Law on Local Government Finances prepared based on the mentioned model was presented to the government and unexpectedly it received strong backing by the donor community. Almost two years after initial idea appeared in the IMWG, the Parliament debated and adopted the new Law.
4. The strategy was implemented as planned, however as MSP shifted to the second and third phase of implementation the strategy consequently changed. At the very beginning focus and main purpose of the IMWG was on professional trainings and the role of IMWG was to be an instrument for needs assessment, designing training modules and recipient of identified trainings. The trainings were provided by the MSP, based on needs expressed by the municipal financial officials. Identified training concepts built the confidence and increased the willingness and interest of partner municipalities for the IMWG. It resulted in further evolution of IMWG role and activities. In the second phase focus was on dialogue with central Government and national institutions and organizations. In the beginning, the MSP supported dialogue on professional issues (practical daily problems of LSGs staff in financial departments). In later phases professional attitudes of participants and members of IMWG resulted in involvement of the IMWG in policy dialogue at higher levels. In the third phase focus was put on sustainability of IMWG and achieved results in financial management. Agreement on Inter-Municipal Cooperation approved and signed by all partner LSGs is a means of sustainability. The IMWG is recognized as a crucial instrument in the Agreement. Core strategic principle remained the same all the time. Starting as an exchange and capacity building platform, the IMWGs were facilitated to contribute to MSP program objectives and, in accordance with the municipal needs, to improve financial management. The fiscal decentralization made this strategy highly relevant.
5. From the very beginning the strategy was adequate since exchange and synergy affected immediately the middle management and professionals and resolved many practical and professional issues. The initiative to reform tax system started on the very ground level. The new Law on LSG Financing, however, has been considered as unforeseen result since no one could expect at the time that the ground level initiative would eventually trigger changes in the Law. Having built confidence, several instructions and bylaws contemplated in the IMWG received attention on the national level. On top of that, several IMWG members were appointed as member-experts in some governmental bodies. The quality of results was possible due to the fact that not only economists were members of IMWG, but also various experts involved in LSGs financial management. Special focus was put on participation of lawyers which enables the IMWG proposals to have an adequate form. Representatives of different institutional beneficiaries also participated in the IMWG contributing by bringing in new perspectives to IMWG discussions. At several occasions consultations with the IMWG on Legal Issues also took place.

4. Lessons learnt

As already mentioned, the outcome hypothesis was twofold: Municipalities are in a better position to resolve financial management issues through networking and ex-change of know-how, and stronger in representing their interest at the central level.

Successes:

1. With no doubt, inter-municipal cooperation and networking proved as good platform for strengthening capacities in local self-governments, because through network development it pools expertise, generates synergy that leads to practical solutions and has the power to influence the central level. The influence at the central level is related to the quality of the expertise and the detailed local information that the network makes available to the central level. Relevant achieved outcomes are: accepted initiative for new Law on Local Self-Governments Financing, participation at Local Government Financing Commission established by the Law, etc. Therefore, interaction and synergies created by the IMWG are believed to have assisted human and organizational development of beneficiary municipalities, in terms of indirect link to outcome hypothesis (theory of change) related to this specific activity  [3]. The MSP’s contribution to the work of the IMWG is reflected in the provision of trainings, expertise, liaison with the central level and other stakeholders, administrative and logistical support. The expert work itself took place between the very experts from the municipality and ad hoc guidance from consultants.
2. Regular networking and exchange facilitated strong capacity building especially, building capacities for implementation of laws and reforms in area of public finances. Such instruments enable smoother implementation of legal acts at both levels through two-way communication between central and local level and achievement of joint understanding and common commitment for more efficient implementation of re-forms in public finances management. Replication of the IMWG model is possible to various extent depending on the topic. In the areas where laws are already in place it is presumably easier to rely on existing foundation, and replicate already successful solutions from different municipalities. In the areas such as the property devolution, the IMWGs may deal with technical issues, while the lobbying capacity that would al-low for critical mass in decision making bodies would probably need to be done through the national association of municipalities that comprises more than 7 municipalities in this case.
3. Inter-municipal cooperation contributes that all changes (management, organizational, procedural etc.) are accepted with less resistance especially having in mind bureaucratic and technocratic attitudes of civil servants in local administrations. Al-though, some of the functions correspond to the role of SCTM these are, however, not seen as overlapping, but rather complementary. The SCTM builds upon good practice achieved through different projects supported by the donor community and strives to disseminate and replicate such practices throughout Serbia. In the course of project, cooperation between the MSP, IMWGs and SCTM became more frequent, direct and intense. It is difficult to conclude who influenced whom more. Cooperation and exchange between the IMWG and SCTM are implemented in a manner of full partnership and mutual respect. Both are fully aware that joint actions will result with higher effects. The SCTM supported dissemination and promotion of the IMWG, and several other donors applied same approach (GTZ, USAID, EU MSP NE Serbia, etc).
4. The IMWG has an excellent role as professional back up especially for small municipalities suffering from week capacities, as it is proved that good practice is easier accepted from cooperative or neighbouring Local Self Governments (LSG). On the other hand, cities (former “big municipalities”) have benefit from mutual support and accumulation of their strength, which has assisted the IMWG to become recognized as “critical mass”, relevant-enough and important partner to central level institutions. Common trust and understanding among IMWG member municipalities is excellent base for joint efforts in exercising new approaches, whether it is related to financial management (budgeting) or fiscal decentralization (local tax administration). In time, regional institutions are likely gain more capacity as Serbia gets closer to the Euro-pean Union. They seem as a logical successor of the IMWGs in a bid to address the needs of the local level. Meanwhile, the IMWGs still represent a functional and valuable instrument in addressing concrete issues at the local level.
5. The synergy arising from joint objectives and interests strongly supports lobbing at central level institutions (both governmental and nongovernmental) in favour of further decentralization and LSGs development. It is also evident that central level institutions are more open and cooperative toward jointly organized LSGs and more willing to discuss and consider submitted initiatives, proposals or suggestions relevant for overall improvement in public finance system development than if it would come from a single municipality. Both, representatives of LSGs and representatives of Central Government has started cooperation in a manner of good and reliable partnership showing full respect for each other’s attitudes, needs and experiences.
6. Dissemination of good practice, relevant experiences and positive results is more effective from the level of the IMWG than from single municipality; as it is confirmed with many examples accepted by the SCTM and disseminated successfully to all Serbian LSGs. The IMWG members have more access to different institutions and events where experiences could be presented. Consistent and common approach in presenting and promoting experiences and distributing adequate info created aware-ness on IMWGs as a new, creative and productive instrument and lobbying body.
7. One of the important risks in establishing the IMWG was the acceptance of the IMWG by other stakeholders that have similar or same activities (e.g. Standing Conference of Towns and Municipalities, professional associations, etc). Full openness for cooperation, transparent work and regular exchange of relevant information created partnership and full participation in activities of all relevant institutions.
8. Beside cooperation between the LSGs and central government, members of IMWG were exposed to cooperation and trainings with other professional institutions and associations (Association of Auditors, Association of Certified Accountants and Book-keepers, Agency for Improvement of Businesses, etc). Furthermore, cooperation between partner local self-governments with these institutions continues through consultancy, in-house trainings for individual LSGs and participation in events organized by these organizations. This has showed how the LSGs changed its approach and attitude towards cooperation. Professional certification and licensing is under consideration in partner LSGs. All activities mentioned above, are in line with already accepted LSGs orientation on new approach in capacity building. Professional improvement is possible only if LSGs are open for new knowledge and skills that contribute to better performance of regular functions.

Problems encountered:

1. During the five years of acting, the IMWG faced with different obstacles and challenges, primarily because of inert LSG administration and mistreated local capacities in the previous decade such as strong centralization, weak possibilities to influence central level transfers and strong dependence of local budgets on financial transfers from the central level, weak overview on collection of revenues, LSGs properties were taken over by central government, etc. At the very beginning, low interest in any changes at local level public finances and a lack of awareness that citizens should participate during the planning and be informed on execution of LSG budget prevailed. The main characteristic in LSG financial management was an almost absolute reliance and dependence on central level transfers.
2. Often there was no awareness on the possibility to make a positive impact on decentralisation and on the new potentials for local development, and therefore LSGs re-sisted taking on new financial management responsibilities. The municipalities were fairly unprepared for fiscal decentralization, mainly the small ones, and felt weak to ensure adequate level of own revenues. They were not confident of their own poten-tials and lacked experiences related to power of synergy, therefore the IMWG FD/FM seemed as a right direction to take in order to build it up.
3. The IMWG had, also, a task to eliminate hesitation of municipal staff to have their voices heard at central level during the new laws and other system solutions prepara-tion. The IMWG contributed to reducing bureaucratic attitudes and ambiguous behav-iour of civil servants in LSG administrations by opening opportunity to express their needs, present experiences, positive results and obstacles in their daily professional work. Changes in attitudes and work approaches were further facilitated by useful feedback and good and applicable advices from other members and representatives of the central level institutions.

Entire experience and lessons learnt that were elaborated within this chapter are closely linked to Chapter 4  [4] and Chapter 5  [5] of the concept document where several very important points have been stressed that coincide with the Serbian experience:

• Supporting sustainable municipal finances is a long term process;
• Capacity development is required on all government levels;
• Supply driven capacity development to establish basic capacities needs to be supplemented with demand driven capacity development approaches;
• Capacity development with regard to municipal finances has to be aligned with the national government capacity development programmes and priorities;
• A balance needs to be struck between demand and supply-driven capacity development supports.

5. Conclusions

Theory of change in this study relates to strengthening working relations between the local and central levels, a common and logical practice for countries with transitional democracy that strive towards decentralization. Additionally, transfer of knowledge from the central to the local level has been perceived as significant support to municipalities in building financial management capacity. Reflected developments that followed showed that the theory of change was well grounded, and that the strategy defined accordingly proved to be highly relevant.

1.  By having their initiatives accepted and implemented at the central level, municipalities earned more self-esteem in approaching the central level with the similar interest. It is clear that success of this initiative was due to a number of factors, including political will and strong support from the donors, which will not necessarily be present in the same way in the future. Potential replications need to have that specific context in mind.
2. Within the MSP programme the Swiss concept of public finances and management was introduced to Serbian LSGs. The applied and implemented strategy was a combination of direct technical support to LSGs and interaction between LSGs and relevant stakeholders at national level (ministries, Central Tax Administration, SCTM, GTZ, USAID and the EU). The IMWG also cooperated with local government representatives from Slovenia and BiH, although the model of cooperation has not been noticed elsewhere.
3. The municipalities have experienced benefits from having and using the IMWG for particular issues at stake. The open issue that remains is their sustainability. The MSP explores options to encourage municipalities to take over chairing and financing the IMWGs according to their priorities. Another option is that such groups are taken over by the Regional Development Agencies established throughout Serbia. This could be beneficial for both sides having in mind that the RDAs are "younger" and not experienced enough. The RDAs might be able to contribute to dissemination and strengthening of the IMWG results and adequately influence this process.
4. Dissemination of positive experience collected in the IMWGs is done through bilateral exchange between other programmes running in Serbia. In addition, the Standing Conference of the Towns and Municipalities is acting as a dissemination body and generator of best practice examples on the local level. This has helped faster changes of conservative attitudes towards decentralization, participatory decision making and budgeting that previously prevailed in the LSGs. Meanwhile, the SCTM became the main actor in lobbying and advocating for the LSGs’ interests, however the work and results of the IMWG proved that a wide opportunity of different and efficient lobbying instruments are available to cities and municipalities. None of them is in conflict with each other and all of them together might contribute to reforms and positive changes. Potential disadvantage could be mainly centralized organization that prevents SCTM to reach closer to the LSGs.
5. On the topic of decentralization, Serbia has to increase the size and political independence of the financial transfers from the central to local level. On the other side, municipalities in general still need to develop their capacities to take over new competences and improve their financial capacities and management. A change that has been long expected is the devolution of property. This issue still remains highly sensitive and political. At the same time, local administrations still lack capacity to manage property, hence devolution needs to go hand in hand with capacity building on the local level. Programme oriented budgeting still remains a challenge for some munici-palities in the MSP area of work. More needs to be done to boost further fiscal decentralization and financial performance of municipalities. It looks like as there is no criti-cal mass to put this topic on agenda, at least not in the period prior to 2012 elections.
6. The lobbying power of the IMWG FM/FD rests with the wide range of stakeholders that were involved in its work or which were related to it, such as: municipal administrations/financial departments, municipal managements, Standing Conference of Towns and Municipalities, professional institutions, central level institutions - Ministry of Finance, Government, Parliament, civil society organizations and the donors (SDC, USAID, GTZ). With the widespread circle of dissemination and influence, the municipalities increasingly grew accepted as equal and relevant partners at all decision making levels.
7. Capacity building based on the transfer of different international experiences (EU, Swiss, and USA) proved to be fruitful and relevant and should be used whenever possible. The mobilization of local capacities, more so than financial support, was key success of the IMWG.
8. A very high motivation of municipal financial professionals was a crucial factor. This was developed through building self-confidence in their own and their municipalities’ potential to claim a space in national policy processes, as well as through regional cooperation and exchange.
9. The project support elements that had the most influence were: well balanced supplied and demand driven capacity building; high level of understanding and trust developed between the MSP, municipal and other relevant professionals; the fact that the MSP provided adequate consultants; and the wide openness of MSP to hear and consider all municipal suggestions and initiatives.
10. There were many important support elements involved outside the project. Primarily, the Swiss concept in public finances and management was introduced to Serbian LSGs. Capacity building based on the transfer of different international experiences (EU, Swiss, and USA) proved to be fruitful and relevant and should be used whenever possible. The mobilization of local capacities, more so than financial support, was a key to success of the IMWG. Applied and implemented strategy was a combination of direct technical support to the LSGs and interaction between LSGs and relevant stakeholders at national level (ministries, Central Tax Administration, SCTM, GTZ, USAID, and EU). The IMWG also cooperated with the local government representatives from Slovenia and Bosnia-Herzegovina, although the model of cooperation has not been noticed elsewhere. Dissemination of positive experience collected in the IMWGs is carried out through bilateral exchange between other programmes running in Serbia. In addition, Standing Conference of the Towns and Municipalities are acting as a dissemination body and a generator of best practice examples on the local level.
11. Maybe not the most, but very important was obvious strong replication potential owned by the IMWG. It proved to be very practical, useful, efficient, effective and even cheap instrument for capacity building, networking, exchange and dissemination of good practice. For potential replication it is important to look out for some critical issues, such as: careful assessment of context and needs; consensus on objectives and priorities; development of good professional communication; full commitment, understanding and trust among all stakeholders; coaching in favour of openness for change, transparency and participatory decision making processes.

Footnotes                                                                                                                                               

[1] KEK-CDC Consultants: (2010), “Donor Support to Sustainable Municipal Finance. – A Survey of the International State-of-the-Art ”, p. 7 ( back to text )

[2] KEK-CDC Consultants: (2010), “Donor Support to Sustainable Municipal Finance. – A Survey of the International State-of-the-Art ”, p. 7 ( back to text )

[3] KEK-CDC Consultants: (2010), “Donor Support to Sustainable Municipal Finance. – A Survey of the International State-of-the-Art ”, p. 7 ( back to text )

[4] KEK-CDC Consultants: (2010), “Donor Support to Sustainable Municipal Finance. – A Survey of the International State-of-the-Art ”, p. 10 ( back to text )

[5] KEK-CDC Consultants: (2010), “Donor Support to Sustainable Municipal Finance. – A Survey of the International State-of-the-Art ”, p. 12 ( back to text )