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SNDP - An Integrated Approach for Subnational Modernization

SNDP - An Integrated Approach for Subnational Modernization. Coherent+Policy Oriented: Fiscal - Local mgt - Finance Policy Complex: Settlements - Micro R- EU Regions Partnership: CG - LG - PPP - NGOs

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SNDP - An Integrated Approach for Subnational Modernization

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  1. SNDP - An Integrated Approach for Subnational Modernization • Coherent+Policy Oriented: Fiscal - Local mgt - Finance Policy • Complex: Settlements - Micro R- EU Regions • Partnership: CG - LG - PPP - NGOs • Medium-Term Moderniz: Addressing the Systemic Issues • Bottom-up Approach: The Merits of FD are Profound • Coordination for Spillover: WB - USAID -UI - KHF - CUI • Muddle-through or Coherent Modernization The World Bank - SNDP

  2. Hungary - Subnational ModernizationSubnational System at the EU Accession • Multi-layer LG System: Elected RG, SD by CG, Reg, Mun. • Nordic vs. Southern European M system • Less Central More Local Tx: VBPTx, Vehicle tx, Less Transfer • “Entrepreneurial Ms” defined in 1990 -> earmarked vs. block grant • EU Funds for Regions: Euro1-2bn. Per Annum • Public Investment Finance: PPP + FDI + LG Borrowing • There is No Sufficient Progress Towards the EU! The World Bank - SNDP

  3. Hungary - Subnational ModernizationMid-term Challenges • Functional Regionalism: The way towards a Multi-layer LGS? • Vs. Special Purpose Districts? • Tax Reform: Fiscal Dec-Tx Admin -Local Polit. Challenges • EU Structural Funds: Reforming the Grant System • Public Investments: Restructuring of P. I. F. System • Maintaining CA and Fiscal STABILITY The World Bank - SNDP

  4. Hungary - Subnational ModernizationCross-Sectoral Challenges • The system of 3200 M is not sustainable. Municipalities and the SN challenges are not taken into account in sector programs which may be strategically suboptimal and not support, rather bypass each other. • The present SN system is not prepared to absorb EU funds, and the 97/99 progress was negligible. Three quarters of Municipalities alone will never be able to comply with EU fund conditions. • Municipal privatization & local private sector development may be more complex than those were in the manufacturing industries plus there are serious negative externalities. • The Bank has not taken into account the municipal enterprise sector (Es with M ownership stake) • To respond SN challenges, the systemic issues in municipal borrowings should be properly addressed. The World Bank - SNDP

  5. Hungary - Subnational ModernizationNext Steps • EU structural funds fiscal, local capacity, finance implications • A medium term Tax reform: EU compliance & SN Fiscal challenges EU structural funds fiscal, local capacity, finance implication • Develop Local Capacity in monitoring & regulating SD • Strategic planning, Budgeting & establishing financial control over LGs • Introducing 21st Century financing instruments in the M sector • Enhancing the prudential framework for M finance The World Bank - SNDP

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