Good local governance in South Caucasus

Programme description

Title: Good local governance in South Caucasus
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Armenia, Azerbaijan, Georgia
Lead executing agency: Ministry of Territorial Administration and Development (MTAD), Armenia; Centre of Work with the Municipalities and State Committee for Family, Women and Children, Azerbaijan; Ministry of Regional Development and Infrastructure (MRDI) and Ministry of Finance (MoF), Georgia
Overall term: 2017 to 2019


Armenia, Azerbaijan and Georgia have ratified the European Charta of Local Self-Government of the Council of Europe (CoE) and hence committed to strengthen local self-governance and local democracy, and to create the necessary legal and institutional frameworks. The challenges regarding good local governance are similar in the three countries. Local self-governance in the three countries is weak and municipalities only insufficiently fulfil the principles of good local governance, such as transparency, citizen orientation, participation and accountability.


Municipalities in the South Caucasus are able to better fulfil their tasks in line with the principles of good governance.


The Programme is based on a multi-level-approach in order to have a systematic and structural effect. Support for municipalities during the piloting phases of new programmes and instruments needs to go hand in hand with advisory services of partners at national level. The programme is working in three output areas:

  • Modernisation of municipal administration
  • Municipal and regional development
  • Joint cross-country learning


Across all three countries, the project is building directly on previous results. New procedures for local and regional development and local financial management have been successfully advanced and were introduced in both pilot municipalities and on national level. The resulting insights and experience have been integrated into the ongoing developments of the legal and institutional frameworks. The same applies to modernising local administration: Citizen offices and e-governance are contributing to modernised and transparent municipal administrative structures.

In Armenia, support is being provided for the adjustment of central steering and management processes to align these with the new requirements of the territorial reform. The municipal administrations are further modernised by the establishment of citizen offices and local branches, as well as the streamlining of processes and the introduction of innovative IT systems. As a result, 30 per cent of the citizens outside the capital receive municipal services from one location in their community. Processing times have been significantly reduced. In Armenia the programme is being co-financed by the United States Agency for International Development (USAID) and the Swiss Agency for Development and Cooperation (DEZA).

In Georgia, the programme supports the government in its efforts to balance the differences between the dynamic urban centres and remote rural areas by implementing measures for regional development. The project also advises on effective planning procedures to enable municipalities to participate in state-level strategic processes and investment decisions, in order to achieve proper needs-based results at local level. As a result, multi-year development strategies have been prepared, which are implemented in line with annual action plans. These action plans are coordinated at municipal, regional and central level and provide a transparent basis for financing work from the regional development fund.

In Azerbaijan, 80 pilot municipalities are being supported by means of a straightforward, software-driven method to ensure the adoption of a systematic and transparent approach to the budgetary cycle - from its development through to its conclusion. Advisory services aimed at increasing revenues generated from property and ownership tax in partner municipalities has led to a 50 per cent increase in tax income. According to the surveys conducted, these regions have also seen a significant improvement in willingness to pay tax. The economic region of Ganja-Gazakh is also receiving support of the co-financing initiative by the EU for rural and regional development.

In the cross-country exchange, the countries learn jointly based on best practices, as for example the support of about 100 women in local politics in Azerbaijan as well as the Georgian experience of territorial reform and its relevance for Armenia. The Cities' Network South Caucasus has a significant role in enabling such a regional exchange, within which both German and South Caucasian municipalities are able to share their experience and insight.