This report has been prepared by the Fiscal Decentralization Task Force of the Network of Associations of Local Authorities of South East Europe (NALAS). Its purpose is to provide national and local policy makers, researchers, and interested outside observers with reliable comparative data on municipal finances and intergovernmental fiscal relations in South East Europe.

Like its object of analysis, the report is a work in progress. It represents a first attempt by NALAS to assemble from its member associations basic data on fiscal decentralization. Over time, NALAS hopes to expand and deepen the analysis in response to requests and suggestions from both member associations and interested observers. For the moment, however, the report provides a snap shot of the structure, functions, and financing of local governments in South East Europe, as well as an overview of how intergovernmental financial relations have evolved over the economically turbulent period 2006-2010.

The report is divided into four sections. It begins with a brief discussion of the data and some of the methodological issues surrounding its use and interpretation. It then presents basic information about the size and structure of municipal governments in South East Europe, as well a few key macro-economic indicators. The report continues by examining the composition of local government revenues and expenditures and concludes with a few observations about trends over the last five years.