A comparative study of local government reforms in the Baltic States 1991-98

This is an analysis of the local government policies in the three Baltic countries since independence was regained in 1991. The focus of this study is the administrative territorial reforms, also called structural reforms. In 1991 the administrative territory in all the Baltic states constituted of many small local government units. This structure was a legacy from the Soviet era, and it was adapted to a government system based on hierarchical control, and limited freedom at the local government levels. With the introduction of a decentralised government system in 1991, there was a need to adapt these structures to the increased responsibilities granted to the local authorities by law. The Lithuanian authorities managed in 1994 to adopt a reform which reduced the number of municipalities from 526 to 56. In Estonia and Latvia the number of units is similar to those in 1991. There are now 254 local government units in Estonia and 566 in Latvia. However, enforced amalgamations are planned to be implemented in 1999-2000. These structures are essential for the functioning of local government in the Baltic countries, as they have introduced a government system similar to the Nordic model characterised by the socalled `general communes' with extensive responsibilities and independent budgets. This is the empirical setting of this study. The aim of this analysis is to discuss essential aspects of the development of local government in post-communist countries. The focus is on the degree of autonomy at the local government level and aspects of democracy related to the development of local government during the transformation. The local government autonomy is by law extensive, although state control mechanisms are perceived as illegitimate due to political motives. The financial autonomy is by law extensive, as well. However, the state allocates the majority of the taxes from the local economy, and therefore the local governments are dependent on transfers in the state budget. The conclusion is here that the extensive welfare responsibilities of the local authorities in combination with a difficult financial situation at both the state and the local level, necessitates state control of the finances during these years of transformation. The regional differences are important, and there is a gap of resources between the cities and the rural areas, which contributes to limit the autonomy of the latter category. The development of democracy has in this analysis been related to the level of participation and the role of political parties at the local level. The level of participation is low and it has been decreasing since 1991 in the Baltic countries. Also, there is a lack of political party organisations in Estonia and Latvia in particular. The attitude is that political parties have not been important mediators of local government affairs. The local government associations, which have been established in the three Baltic countries have been the most important articulators of local affairs at the national policy-making level, partly due to strong Western European support to these associations. Moreover, this analysis attempts to present essential explanations of the differing policies in the Baltic states. The main subject is the diverging administrative territorial reform in Lithuania in 1994. The structural variables are essential, focusing on the Northern European orientation of Estonia and Latvia and the Central-Eastern European orientation of Lithuania. These factors have affected the economic development and the population structure in these countries. However, structures cannot explain policy-outputs alone and they are interrelated with cultural variables. The main hypothesis here is that the Catholic and Central European tradition of Lithuania has created a more `centralistic' orientated political culture, and it was therefore difficult to mobilise a strong opposition to the reform in 1994. It is the main impression in this study that the planning process is more decentralised in Estonia and Latvia, a reflection of both structure, political culture as well as the strength of the Government