Albania’s local governments are characterized by significant disparities in size and capacity. The challenge of fragmentation includes not only economic efficiency but also the administrative and technical capacities of local governments to provide services in an efficient and effective way. As international experience proves, the fragmentation of local government systems is related to the extent of financial decentralization. It is apparent that larger municipalities are able to carry out a wider scope of functions than smaller municipalities. The regional development policy is a new area of public policy in Albania. This research will focus on the examination of the system of local government in Albania, which show that the requirement of...