View Research by Author - Anthony Levitas

Mr. Tony Levitas is a Senior Associate of the Urban Institute's Center on International Development and Governance. He has more than 15 years of experience providing advice on both the functional and financial dimensions of decentralization in post-communist Europe. His area of expertise is in the reform of the regulatory frameworks that govern the relationship between national and local governments. In particular, his work has focused on assigning appropriate revenue and expenditure responsibilities to local governments; on developing sound rules for local government budgeting, investment planning and financial reporting; on the creation and regulation of municipal debt markets; and on the allocation and management of national government funds for education to both local governments and schools.

Most recently, Mr. Levitas has helped draft, negotiate, push through parliament and implement new laws on local government finance in Serbia, Macedonia and Bosnia. In Poland, he helped develop the regulatory frameworks for both general obligation bonds for municipalities, and revenue backed securities for their utilities. He also led a team that developed and implemented a per pupil financing system that made possible the decentralization primary and secondary education to local governments. Mr. Levitas is widely published on all aspects of local government reform and fiscal decentralization and has held lectureships at Harvard University, the Massachusetts Institute of Technology and Central European University. He lives in Warsaw with his wife and youngest daughter, and holds both Polish and American citizenship.

Email: TLevitas@urban.org

Publications

Decentralization projects in developing and transitional countries are typically accompanied by efforts to increase the own-revenue powers of local governments. Both the literature of fiscal federalism and the practices of donors and domestic reformers often see the strengthening these powers as critically important to the success of local government reform initiatives. The recent history of Albanian intergovernmental finance reform, however, suggests that there can be too much of a good thing: Placing the enhancement of local government tax powers at the center of decentralization projects can not only crowd out—theoretically and practically—critically important efforts to develop stable, predictable, and adequate transfer systems, but can also be politically self-blocking. In this paper, we use the Albanian case to illustrate why in developing countries with highly skewed tax bases there are good reasons to focus first on stabilizing transfer systems, and only secondarily on expanding local government own-revenue powers.

Decentralization in Macedonia was conceived of in two different phases, allowing for an asymmetric allocation of fiscal powers. During the first phase, all local governments were assigned the responsibility to deliver only a few – mainly communal – local government functions. After fulfillment of specific conditions and approval by the central government, local governments in Macedonia would be allowed to take on their broader functional responsibilities. Using a detailed dataset of local government finances, this study analyzes the evolution of local government revenues and expenditures in Macedonia and highlights the main problems of the country's intergovernmental finance system.

This note examines the revenue and expenditure responses of local governments to the decrease in their revenues caused by the current economic downturn and by the Government of Serbia’s suspension of the transfer system put in place by the 2006 Local Government Finance Law (LGFL). The fiscal analysis shows that in response to the elimination of the transfer system, local governments significantly raised their own revenues. Most of this growth came from better collection of the property tax from households and better collection of the land use fee from businesses. Not surprisingly, local investment spending plummeted 26 percent between 2007 and 2009 and virtually disappeared among the worst-off local governments.

This study analyzes the funding of local governments in Macedonia today, and whether the current intergovernmental fiscal system provides adequate funding to the local government level. The study relies on a new local government finance database to present a picture of how local government finances have evolved over the last three years, and provides a concrete proposal for initial reforms that would improve the adequacy, efficiency, and equity of intergovernmental financial relations in Macedonia.

The purpose of this note is to help both local and national government officials think through possible strategies for addressing one of the fundamental issues facing Serbian municipalities today: How do Serbian local governments increase the revenues they need to improve their public infrastructure while simultaneously creating an environment favorable to private investment and local economic development? This is a dilemma that local governments face throughout the world but which is particularly pressing in many developing and transition countries where local governments must address huge deficits in urban infrastructure without at the same time over taxing their business communities upon which their future growth depends. It is also of particular importance in Nis, the third largest city in Serbia and the economic engine of the southern and least developed part of the country.

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