Local Development in the Era of Europeanization and Cohesion: Challenges and Opportunities for Albania and the Region

By Luiza Hoxhaj

1. Introduction

Sustainable local development has become a strategic dimension in the debate about the future of Europe and the Western Balkans. Faced with global challenges such as climate change, migration, demographic transition, and the need for a just digital transformation, it is imperative to reconceptualize development at the local level. In this context, the European Union’s cohesion policy, along with its instruments for non-member countries, presents a significant opportunity to empower local governance and build a more inclusive and equitable development model.

2. The Role of the EU’s Cohesion Policy

Cohesion policy is the EU’s main mechanism for reducing territorial disparities and promoting economic and social development across all regions. It relies on three main funds: the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+), and the Cohesion Fund. These funds aim to support innovation, green transition, social inclusion, and capacity building at the local level. For Western Balkan countries that are not yet EU members, the cohesion policy is implemented through the Instrument for Pre-Accession Assistance (IPA III).

3. Multi-Level Governance and Local Development

Multi-level governance is an approach that involves cooperation among institutional actors at different levels (central, regional, local, European). This approach is particularly important in designing sustainable local development strategies, as it gives communities and local authorities an active role in the decision-making process. In Albania, although a legal framework for decentralization exists, municipalities’ technical and financial capacities remain limited, hindering effective implementation of development policies.

4. Key EU Instruments for the Western Balkans

IPA III (2021–2027)

IPA III is the EU’s main financial instrument for Western Balkan countries, including Albania. It focuses on reforms in the rule of law, public administration, economic development and competitiveness, territorial development, and green and digital transition. Local development is an integral part of this instrument through the integrated territorial development (ITD) approach.

Green Agenda for the Western Balkans

This policy document aligns the region with the European Green Deal, setting objectives for decarbonization, clean energy, nature protection, waste management, and sustainable rural development. Its implementation requires deep involvement of local governments and actors in designing and executing concrete projects.

NDICI – Global Europe

The EU’s new instrument for international cooperation and sustainable development (NDICI – Global Europe) includes a component for neighborhood and enlargement countries. It supports partnerships for sustainable development and just transition, including local development and the creation of green and blue economies.

5. National and Regional Strategies

Albania has adopted several national strategies aiming to align with European priorities, including the National Strategy for Development and Integration, the National Energy and Climate Plan, and the Strategy for Agriculture and Rural Development. However, the connection between these strategies and the local level often remains weak. The lack of integrated development plans at the municipal level and limited long-term planning capacities hinder effective implementation.

6. The Case of Albania: Challenges and Opportunities

Albania faces major challenges in terms of real decentralization and local capacity building. Municipalities often lack sufficient financial and human resources to design and implement development projects. Nevertheless, there are significant opportunities for growth in sectors such as sustainable agriculture, agrotourism, clean energy, and waste management. The EU’s increasing interest in the region and Albania’s involvement in green and digital European initiatives create a favorable environment for sustainable local development.

7. Comparative Experiences from the Western Balkans

Slovenia

Slovenia is a positive example of a successful transition from an aspirant country to an EU member that effectively uses cohesion funds. It has successfully developed the LEADER approach for rural development and promotes deep local community involvement in decision-making.

Montenegro

Montenegro has taken steps to build integrated coastal zone management structures, including biodiversity protection and the development of sustainable tourism.

North Macedonia

North Macedonia has established regional structures for planning and managing projects that approximate the EU’s model of functional regions, enabling more efficient use of IPA funds.

8. Conclusion and Recommendations

Sustainable local development requires more than financial investment—it demands a paradigm shift in the way development is conceptualized. Albania must strengthen fiscal decentralization, invest in building municipal capacities, and improve interinstitutional cooperation. Cohesion policy and instruments like IPA III, the Green Agenda, and NDICI offer a strong framework for this transformation, but their success depends on our ability to build good governance, broad participation, and a clear territorial vision.

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References

1. European Commission (2021). Cohesion Policy 2021–2027.

2. DG REGIO. Multi-level Governance and Partnership.

3. European Commission. Instrument for Pre-accession Assistance (IPA III) Programming Framework.

4. European Green Deal and the Green Agenda for the Western Balkans (2020).

5. European Commission (2021). NDICI – Global Europe: Regulation (EU) 2021/947.

6. GIZ. Open Regional Fund – Modernisation of Municipal Services.

7. Ministry for Europe and Foreign Affairs, Albania. National Strategy for Development and Integration.

8. Regional Cooperation Council (2022). Balkan Barometer: Public Opinion Survey.

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