The Georgian-style principle of subsidiarity

David Losaberidze is project coordinator at the Caucasus Institute for Peace Democracy and Development.

During his meetings with ordinary citizens (especially in the regions) the Georgian president often assures them he keeps a close eye on everything happening in the country, be it a new road or monument in a small town or village. “Nobody can do it but me,” he says, writes David Losaberidze, project coordinator at the Caucasus Institute for Peace Democracy and Development.

It is interesting that these statements have so far drawn no reaction, neither positive nor negative, from the public.

At first glance, it seems normal and even exciting that the country’s leader cares for the nation as well as he does for his own family, trying to involve himself in every detail of social life, for instance advising on architectural design or choosing a colour for a school walls. In a patrimonial society such deep involvement can only strengthen the leader’s popularity and approval rating – “The country is in good hands”.

And the president’s statements are not mere words. The central government indeed has complete control over every aspect of the country’s everyday life and is trying to take advantage of the opportunities created by this control to promote its policies.

But what nearly everybody fails to remember in these circumstances is the principle of subsidiarity, which holds that a central authority should have a function, performing only those tasks which cannot be performed effectively at a local level.

Bible (Book of Exodus) was the first book to mention this principle. After the great exodus of the Israelites from Egypt Moses chose able men and made them heads over the people: rulers of thousands, rulers of hundreds, rulers of fifties, and rulers of tens. Only if the rulers were unable to handle a particular issue it was brought to this attention.

The principle is enshrined in European Charter of Local Self-Government, a document Georgia is obliged to adhere to as a signatory country.

Apart from the subsidiarity principle the Charter states – and the Georgian national legislation recognises its provisions – that along with delegating powers to local self-governments, the central government should also give them financial resources they need to implement their functions.

A decade ago the opposition forces used to criticise then president Eduard Shevardnadze just for his unwillingness, or inability, to provide local self-governments with necessary budgets. As a result, their role was largely formal. In theory, it would be logical to expect local self-government budgets to increase after the Rose Revolution. The task was not hard to achieve, provided the government had respective political will, especially as the country’s central budget has soared almost tenfold since 2003.

Indeed, the amount of annual transfers from the central budget to local self-governments increased from 240 mln to 1.567 mln GEL in the period 2003-2010. Besides, many regional programs are directly funded by the central government.

Unfortunately, a closer look into whether and to what extent local self-governments are financially independent leaves little ground for optimism. A lion’s share of the growth in local budgets was due to increased transfers (including targeted transfers) and program funding from the central budget. But local self-governments’ own revenues dropped from 536 mln GEL in 2008 to 447 mln GEL in 2010. In 2010 local self-governments raised only 181 mln GEL of tax revenues. It is noteworthy that 66.7% of this money was generated in five big cities, while other municipalities produced only a third of the total.

Being entirely dependent on the central government, local self-governments have great difficulty finding out what budgetary funds are available to them. The central government’s funding priorities are constantly changing, leading to respective changes in municipal budgets, which sometimes increase/decrease 100, 200, or even 300% 10-15 times every year.

Architects of the 2005-2006 local self-government reform were aware that the enlargement of municipalities would inevitably increase the gap between the people and the government and negatively affect democratisation processes. They expected, however, that local self-governments would have bigger budgets, enabling them to carry out large-scale municipal programs.

But results of the reform fell short of their expectations. According to the Georgian ministry of finance, tax revenues of the local self-governments have shrunk significantly since 2003, as shown in the table below.

So the reform neither raised the quality of democratisation nor improved financial management skills.

It is noteworthy that both the government and the broad public assess these changes quite adequately. Every time the president unveils a new object, the head of a local self-government can be seen behind his back, humbly trying to move closer to be filmed beside the president. According to various public opinion polls, few believe that local self-governments have any real role or voice in the country’s affairs. That is why people usually send their complaints and requests to the central government.

Small wonder that when a local problem (water supply, utilities, etc) is not addressed timely, local residents lay the blame firmly at the central government’s and the president’s door, though in many cases the central government has nothing to do with the problem.

Such a vague division of functions and responsibilities is not new for Georgia. The basic principles of the separation of powers are often ignored in the country. But at a time when the defence minister is placed in charge of the grape harvest, the interior minister is busy unveiling new kindergartens, the education minister speaks for the interior ministry’s press service, and the Tbilisi mayor supervises military operations, it would be hardly surprising to see a TV footage demonstrating the president’s decisive role in the construction and inauguration of a fountain in a far corner of Georgia.

But one big question, related to the local self-government’s functions, remains unanswered: What’s the use of having local self-government in a country where municipalities have neither real powers nor funds to implement them and where everything, be it repairing a fence in a remote village or planting trees, is managed (quite efficiently to be honest) solely by the president?