Strong, local governance in South Caucasus

Programme description

Title: Strong, 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 (Azerbaijan); Ministry of Regional Development and Infrastructure of Georgia (MRDI)
Overall term: 2017 to 2019


By ratifying the European Charter of Local Self-Government, the South Caucasian countries of Armenia, Azerbaijan and Georgia undertake to strengthen both local self-government and democracy, and to create the necessary statutory and institutional frameworks. All three countries are, however, characterised by a significant weakness in local self-government. To date, the respective municipalities have failed to meet the principles of good local governance – such as transparency, a focus on citizens’ needs, citizen participation, and accountability – to a satisfactory level.


To enable the municipalities in South Caucasus to better execute their tasks in accordance with the principles of good governance.


The project adopts a multi-level approach in order to produce a structural and system-forming effect. Support for municipalities during the piloting phase of new programmes and instruments is coupled with the advisory efforts of partners at national level. The approach operates across three action areas:

  • The modernisation of municipal administration
  • Municipal and regional development
  • A transnational learning format


Across all three countries, the project is building directly on previous results. A range of new programmes has been successfully (further) developed for municipal and regional development planning and municipal financial management, and piloted at municipal level before being rolled out at national level. The resulting insights and experience have been integrated into the ongoing development of statutory and institutional framework conditions. The same applies to the modernisation of local government: Citizen service offices and e-governance are contributing to modernised and transparent municipal government structures.

In Armenia, support is being provided for the adjustment of centralised control and management processes to align these with the new requirements triggered by regional reform. Municipal administrations are also undergoing a process of modernisation through the establishment of citizen service offices and local branches, as well as the streamlining of processes and the introduction of innovative IT systems. This has already resulted in over 30 per cent of the population situated beyond the capital city receiving municipal services from one source. Processing times have also seen a significant reduction. The project is being co-financed in Armenia by the United States Agency for International Development (USAID) and the Swiss Agency for Development and Cooperation (DEZA).

In Georgia, the project supports the government in the process of eradicating differences between dynamic centres and disadvantaged rural areas by way of implementing measures that facilitate regional development. The project also advises on effective planning measures with which municipalities are empowered to participate in state-level strategic processes and investment decisions, in order that the proper needs-based results are achieved at local level. This has given rise to a number of multi-year regional development strategies, 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 that stems 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. A consultation process 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 marked improvement in willingness to pay tax. The economic region of Ganja-Gazakh is also receiving support as a result of the co-financing initiative by the EU aimed at rural and regional development.

As part of a transnational exchange, a learning process has been initiated that draws on key success stories, including examples such as the support being offered to approximately 100 municipal policy-makers in Azerbaijan, or the experience garnered from Georgian municipal reform and its relevance to Armenia. The South Caucasus Cities' Network has played 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.