Territorial reform approved with 85 votes in favor: Albania to have 15 fewer municipalities—how will they function?

After hours of debate, Parliament approved the new administrative-territorial reform with 85 votes in favor. The reform did not secure the support of the opposition, nor that of several lawmakers within the governing camp.

The majority’s version aims to create larger and financially more sustainable local government units by reducing the number of municipalities from 61 to 46, but the final report of the Parliamentary Committee points out that territorial mergers alone are not enough to guarantee better services.

The reform calls for profound changes in the distribution of powers, the financing of local government and regional organization. Meanwhile, the opposition proposed the opposite model, with more than 92 municipalities, arguing that local government should be closer to citizens.

Twelve years after the 2014 reform, which reduced the number of local government units from 373 to 61 municipalities, Albania is moving toward further territorial consolidation.

Under the new reform, 15 municipalities will lose their status as independent local self-government units and will join larger neighboring municipalities.

The reform is based on the goal of reducing administrative costs, concentrating financial resources and increasing municipalities’ capacity to provide public services.

However, the 357-page final report of the Parliamentary Special Committee on Administrative-Territorial Reform shows that the problems facing local government extend beyond the size of municipalities.

Following today’s approval, Fushë-Arrëz will merge with Pukë, Klos with Mat and Rrogozhinë with Kavajë. In Berat County, Dimal and Poliçan will merge with Berat, while in Fier County, Patos will merge with Fier and Divjakë with Lushnjë.

In the south of the country, Selenicë will merge with Vlorë, Këlcyrë with Përmet, Memaliaj with Tepelenë and Libohovë with Gjirokastër. In Korçë County, Maliq will merge with Korçë, while in Elbasan County, Cërrik and Belsh will merge with Elbasan and Prrenjas with Librazhd.

The aim is to create larger units capable of managing a broader territory and economic base. The municipalities that are merged will no longer have political leadership or independent budgets, but will be administered by the structures of the respective municipalities.

One of the key questions is whether the concentration of administration will be accompanied by the preservation of access to services for communities that lose their municipality.

Financing: more money from shared taxes and a change to the transfer formula

One of the main problems identified by the report concerns municipalities’ dependence on central government funding.

The new reform proposes revising the funding formula to include indicators such as terrain, the distribution of villages, road length, the age of the population, the poverty level and fiscal capacity. The share of unconditional transfers will increase relative to conditional funding, giving municipalities greater autonomy in setting spending priorities.

Another proposal is for a portion of personal income tax to be returned to municipalities based on taxpayers’ place of residence.

It is also recommended that a clearer share of mining royalties and tourism revenue go to the territories where that revenue is generated.

The reform also calls for the full implementation of the property tax and for the infrastructure impact tax to be used primarily for investment, rather than salaries and routine expenses.

These measures aim to strengthen financial autonomy, but they remain recommendations requiring changes to fiscal and local finance legislation.

The costs of the reform and implementation risks

While the merger of municipalities is intended to save on administrative expenses, the report acknowledges that implementing the reform will entail temporary costs. These will involve staff reorganization, administration training, the integration of digital systems, the transfer of assets, and the harmonization of contracts and financial obligations.

To cover these costs, the report recommends creating a National Transition Fund with multiyear financing. The majority’s report also identifies the risk of overlapping responsibilities, delays in decision-making, uncertainty for employees and financial difficulties for the units involved in the process.

For this reason, a gradual implementation is proposed, with legal and institutional preparations during 2026–2027, the transfer of powers, assets and personnel in 2027–2028, consolidation during 2029–2030 and an assessment of the results by 2035.

This timetable shows that changing the administrative map is only the initial stage of a much longer process of institutional reorganization.

Experts: Reducing the number of municipalities does not automatically guarantee better services

The parliamentary report itself acknowledges that territorial mergers must be justified by improvements in financial and functional sustainability, without unacceptably worsening citizens’ access or community representation.

This is also the main concern of the independent experts interviewed by Monitor.

Afrim Krasniqi of the Institute for Political Studies warns that the reform risks being influenced by political and electoral interests, while the debate should focus on the model of local governance.

Urban planner Gent Kaprata argues that the problem lies not only in administrative boundaries, but also in the functions, powers and resources granted to local government. According to him, the number of municipalities should emerge from an analysis of these elements, rather than serve as the starting point of the reform.

Another concern relates to rural areas, where merging with larger centers could increase the distance between citizens and decision-making. In the absence of a mechanism to guarantee the preservation and improvement of services, administrative consolidation may fail to deliver the expected benefits for communities experiencing depopulation.

The opposition’s version: deepening decentralization

Unlike the majority, the Democratic Party proposed a review of the map aimed at increasing the number of municipalities to more than 92, with alternatives that could lead to more than 100 municipalities.

According to Luçiano Boçi, co-chair of the Committee on Territorial Reform, the platform is based on four main criteria: demographics, economic and fiscal potential, distance from services, and territorial and historical identity.

The opposition argues that the 2014 reform moved local government away from many rural and mountainous communities, weakening representation and access to services.

One of the alternatives envisages creating new municipalities in areas where the distance from the administrative center is more than 15–20 kilometers or requires around 30 minutes of travel, while also taking into account the number of residents and economic opportunities.

The Democratic Party also proposes an organization with smaller municipalities and 6–8 functional regions, or the retention of the 12 counties with clear powers over territorial planning, emergencies and inter-municipal projects.

However, creating more municipalities would require sustainable funding and administrative reorganization to avoid increasing costs and fragmenting services.

Financially, the Democratic Party proposed increasing the unconditional transfer from around 1% of GDP to at least 2%, with a long-term target of up to 4%.

According to Boçi, increased funding should be accompanied by a change to the distribution formula so that small municipalities and rural areas are not disadvantaged because of their low populations.

The proposal is based on basic funding for each municipality, the inclusion of territorial and terrain-related costs, and the creation of an equalization mechanism for units with weak fiscal capacity.

This approach shares common ground with the financial recommendations in the parliamentary report, particularly the need for a formula that reflects the actual cost of services.

The main difference remains how the territory should be organized: the majority seeks fewer municipalities with more concentrated capacities, while the opposition is calling for more local government units and a broader distribution of funding.

In both versions, the challenge remains ensuring sufficient financial resources and real powers for local government. Without these changes, revising the administrative map may not be enough to improve services and curb the abandonment of rural areas./Monitor