Contents

I. Foreword
II. Background; Policy context
III. Current status of institutional structures to implement regional development policy in Bulgaria at regional level: Problem statement
1. Planning regions at NUTS II level remain a framework without contents and the institutions therein prove unable to efficiently formulate and implement regional development policy
2. District Governor /Regional governor/ incapable of effectively addressing regional development at regional level
3. District  Councils for Regional Development- inefficient instruments for coordination and partnership at regional level
IV. Current Policy Responses
V. Policy Options- Suggested  Framework for Reform
1. Option 1- Maintaining the Current Policy Approach
2. Option 2- Radical Reform towards Establishment of Regional Self-government with broad competence with respect to regional development
3. Option 3- Redefinition of Roles and Responsibilities of regional institutions responsible for Regional Development at  Legal and Operational levels, Optimizing Programming/Planning Cycle and Financing Mechanisms, Increasing Administrative Capacity;  Making PPP  operational, Integrating policies
VI. Policy recommendations
1. Undertaking reform through amending relevant legislation and by-laws
2. Institutional reform
3. Building capacity
 
 
 

I. Foreword

Regionalization is and remains a major challenge for political, economic and social development in Bulgaria.  This challenge includes the institutional design of a new regional level of governance for the purposes of regional policy and regional development. This may well be understood as a development induced by the interaction of three key factors, including: historical and geo-political determinants; EU requirements and the specific economic and political context of transition, including government policy. Strengthening regional level of governance, referred often to as “the golden key” to the structural funds is a major issue in regional development policy in Bulgaria.
This present paper is an effort to present the policy context for the reforms needed with respect to defining the new role of the regions in overseeing and coordinating regional development in Bulgaria. Building on that framework the author will attempt to define existing policy options for strengthening regional level of governance and to draw some policy recommendations directed towards improving the current legal, institutional and financial framework related to regions. The policy recommendations are intended for decision makers in Bulgaria who expressed interest in the analysis and its outcome. They focuses primarily on the changes and revision of legal, institutional and financial frame needed in order to strengthen regional level of governance and turn it into an important factor in formulation and implementation of sound regional development policy in Bulgaria.

II. Background; Policy context 
To Bulgaria, similar to the other CEECs, the concept of regional development policy is not totally new. Before 1989 and under conditions of a centrally-planned economy, it was characterized by central decisions that generally affected regions following the national industrialization plans. These decisions were political and unable to provide solutions for both overall underdevelopment and considerable regional disparities.
In the aftermath of the breakdown of socialist regimes after 1989, Bulgaria, similar to other CEECs faced serious problems in formulating and implementing regional development policy. Regional development policies in the 1990s may be characterized by lack of coherent, systematic and long-term vision regional development policy, of political vision and will to address regional disparities and regional development, of appropriate legal framework  /The Regional Development Act was first adopted in 1999/ and financial resources;  centralization of powers and resources; no specific institutional capacity to address effectively regional development; uncoordinated and unbalanced planning based on various planning documents; weak programming dominated by general program documents; fragmented and uncoordinated sectoral policies, municipalities and associations of municipalities in the process of consolidation, not yet active partners in regional development. In this setting regions had a minor role, there were no institutions at regional level to address effectively regional development.
Under the above conditions, regional development in Bulgaria was not a bottom-up initiative, but prompted by the effort to join the EU and gain access to EU pre-accession funds. Series of institutional developments, elaboration of basic program documents and legislation rapidly improved the situation, especially after 1999. The policy context for development of regions as an important nexus between central and local level of government for the purpose of regional development may be characterized as follows:
 
The environment for regional policy is becoming increasingly complex. With negotiations for the accession to the EU underway, the key challenge for policy makers in Bulgaria at central, regional or local level is to think afresh about the type of regional policy Bulgaria needs that is appropriate for an enlarged EU.

 At both policy-making and policy implementing level the efforts made to adapt regional development policy in Bulgaria to the new economic, political and social environment appeared insufficient; as a result the country fails to efficiently use the opportunities related to its preparation for accession to the EU. Regional development policy proved unable so far to generate a broader coherence with sectoral and other government policies mostly because of weak political commitment, especially at decision-making level. Various stakeholders have not yet internalized sufficiently well their interests with respect regional policy, their potential to positively influence the reform remains unutilized.

 Bulgaria belongs to the group of countries with a late and mostly EU-driven institution building. The country’s progress towards modernizing its regional development system and establishing an institutional framework which assigns new roles to regional political and economic actors is rather slow. The institutional system with respect to regional development as it is now appears a very heavy and bureaucratic system with unclear allocation of competences and responsibilities, some of them overlapping. This makes it difficult to achieve accountability, transparency, effectiveness and efficiency. In the absence of   appropriate systems of financial management and control, specific bodies, structures and procedures for financial control, auditing, certification of expenses and corrective measures, the system is left to function without check and balances mechanisms. The very existence of so many structures to ensure coordination among the various authorities and actors in regional development questions its ability to function smoothly as a coherent system. As incoherent and inflexible as it is now this system generates potential for conflicts among the various players and fails to internalize and make use of their potential to the detriment of the common cause.

Programming of regional development at all levels is weak, dominated by too general program documents. Municipal and/or regional projects submitted within the framework of regional development plans are in the approval process for a considerable period of time without a decision as to their status. It is a common practice that projects are repeatedly submitted without the perspective of their potential for funding; the projects submitted for approval to Central Government from local and regional authorities are subject to continuous lobbying to relevant Ministries by local and regional officials as well as MPs. This illustrates the lack of fixed, transparent criteria and ex ante assessment. The projects and programs prepared at the regional and local levels are focused on accessing EU and other external funds and are not locally driven with a view to mobilizing local resources.

 The planning of regional development at all levels suffers serious weaknesses; planning documents are often non-coordinated, frequently overlapping and inefficient and they fail to comply with the requirements for the form and content of such documents in the acquis; the regulation of various types of plans, programs and strategies under the current Act, as well as their volume and content, is far from being complete. That caused serious implementation problems and required extensive secondary legislation.

 The reform towards greater representation of regions bears an enormous complexity where various interrelated issues are presented, including sectoral policies, education, healthcare, state aids control, etc. Given the scarcity of public funding the reform has very high costs.

 Regionalization is not a powerful factor in social and political life yet. In fact, regional interests are not sufficiently developed and effectively presented in Bulgarian society. Regionalization within political parties and MPs that could influence specific decisions in Parliament and in government is a marginal one without prospects for sustainability. Real needs of society in this respect are inadequately studied and addressed in policy development work. Greater attention is being paid to territorial issues, such as centers, borders. The ethnic composition of particular regions remains a concern not being sufficiently addressed. The political environment with respect to regionalization is unstable and fragmented. No public and political consensus exists on the direction and further scope of the reform. Many interests are involved in the reform, including political parties, state bureaucracy at central, regional and local level, interest groups, municipalities, associations of municipalities, etc. Those interests are often misunderstood, inadequately communicated and channeled and as a result of this, insufficiently  promoted.Regionalization and public administration reform have not been supported by an efficient information and media campaign. The public is rarely and insufficiently informed about anticipated reforms As a result, there is mostly professional, but almost no public debate on regionalization.

 The third sector has demonstrated inadequate resources and capacity to address regionalization-i.e., public administration reform and regional development in successful short-term and efficient campaigns. The regional tier of the third sector is still characterized by unbalanced development, lack of vision and workable strategies and lack of resources. The central tier of the third sector and in particular, the strongest actor in the field: the National Association of Municipalities in Bulgaria is still too much under pressure of the fiscal decentralization reform deadlock and yet to elaborate a strategy on how to face this very complex issue. The sector’s campaign in favor of public administration reform was more or less self-centred as it does not make too many efforts to attract other stakeholders but relies on politician’s promises mostly. In a case where those promises never come true, the dilemma of the sector is that its campaign is sufficient only within the sector itself but does not represent the public and the debate remains too much within the limitations of professional and not essentially public debate.

Based on various significant weakness of the legal framework related to regional development policy a need of a new Regional Development Act has been recognized. Such was recently adopted by the Parliament on February 5th, 2004. Notwithstanding the progress in setting up the legislative and institutional framework of regional policy in Bulgaria, it still lacks coherent, systematic and long-term vision regional development policy and political vision and will to address regional disparities and regional development;

Scarce  financial resources to finance activities related to regional development; lack of clarity with regard to the identification of the sources and mechanisms of financing or a system for expedient and lawful appropriation of resources;

 There is a general lack of administrative capacity to address regional development /human capacity, trained specialists, resources/.

III. Current status of institutional structures to implement regional development policy in Bulgaria at regional level: Problem statement
The institutional framework at regional level to address regional development comprises of:
• institutions established in the 6 planning regions;
• regional governors and regional governor’s administrations and
• district councils in all 28 districts of Bulgaria.

The above institutions have all been assigned roles and responsibilities in formulating and implementing regional development policy. Based on an analysis of their current status, the following policy problems have been identified:
1. Planning regions at NUTS II level remain a framework without contents and the institutions therein prove unable to efficiently formulate and implement regional development policy
For the purposes of efficient regional policy, Bulgaria has established planning regions-EU  NUTS II level and regions for a purposeful impact within planning regions.
Six planning regions, based on the Regional Development Act of 1999, have been set up for the purpose of planning, implementation and monitoring of regional initiatives on decentralized basis.  Within them operate Commissions for Economic and Social Cohesion /CESC/, meant to be  instruments for the endorsement of regional development plans and programs prior to their submission by the Minister of Regional Development to the Regional Development Council. They include representatives of the central institutions, all district governors in the region, representatives of local authorities and administration, in the region, as well as economic and social partners.
Based on the Regional Development Act are also the regions for purposeful impact, determined to facilitate the regional development measures, and the endorsement of specific initiatives to satisfy concrete needs.
Both planning regions and regions for purposeful impact generate serious problems. Major policy problem is that so far they are just framework without real contents, which makes them not only inefficient, but artificial indeed. Planning regions have no administrative structures, which coupled with the lack of political vision with regard to the establishment of a second self-government level, reduced the government policy in the new regions to almost token action.  Formally, beyond the institutions created /the territorial units of the Ministry of Regional Development in the regions and the CESC little has been done to encourage the formation of Public Private Partnerships at this level. Planning regions have no financial resources of their own, which has lead to serious problems as well.

2. District Governor /Regional governor/  incapable of effectively addressing regional development at regional level
District Governors in the 28 districts of Bulgaria act as the only official representatives of the Council of Ministers at district level so that they represent the key ministries in the regions. District governor is a key figure in conducting regional policy. She/he organizes the preparation and implementation of district development strategies and programs; coordinates the activities of decentralized executive authorities at district level and their relations with local authorities; presents the regional plan for development and the annual report for its fulfillment to the Minister of Regional Development and Public Works, establishes relations with local government bodies. He carries the main responsibility for pursing the regional policy and the harmonization of national and local interests at district level.
Among the most serious and not yet solved problems of the current institutional structures for regional development are related to regional governors. Indeed, there is no functioning mechanism to enable regional governor effectively endorse regional policy at district level.   Regional governors are not in position to present the government policy in its entirety as they have no competence to effectively coordinate among the responsible ministries. Regional governors are in fact incapable of effectively addressing regional development and unable to represent the government’s policies in an integrated, comprehensive manner due to the lack of subordination of the regional representatives of the line Ministries.  Even if the law gives Governors the authority to coordinate the line ministries, the Governors lack the tools to do this effectively. Financial and operational capacity is limited due to the current status of dependency and subordination of regional governments.  At present, regional governors lack financial means for implementation or participation in development projects. The importance of their role is dramatically reduced as they are responsible for the preparation of plans, but have no opportunity to actively participate in the endorsement of these plans.

3. District  Councils for Regional Development- inefficient instruments for coordination and partnership at regional level
District Councils for Regional Development are established in all 28 districts of Bulgaria to assist the regional governor in the implementation of his functions with a function in preparation of the regional development plans and the annual reports on its implementation. Chairman of the district council for regional development is the regional governor and its members - the mayors of the municipalities in the region and one representative of the municipal council of each municipality. However, representatives of the decentralized structures of the central institutions, as well as NGOs and others, may also participate in its sessions upon an invitation by the regional governor. Regional councils are viewed as instruments for coordination and partnership at district level. They express statements about the elaborated regional plan for development and the annual report for its implementation.
With respect to regional councils and their role in formulation and overseeing regional development policy at regional level, there are also serious policy problems. Thus, though established with a partnership perspective in mind, the institutional setting does not provide for sufficient application of the Public Private Partnership principle. Indeed, the concrete role of social partners, organized civil society, business entities in regional policy is not clear. Their participation in regional councils is made dependent on an invitation by the regional governor, which magnifies the potential for limiting the participation of stakeholders in regional policy. The growing potential of local governments and their associations for development has not been internalized so far as their involvement in formulation and implementation of regional policy remains limited. In this format, the system remains rather inflexible and not able to generate new partners, initiatives, potential and make use of opportunities. The stakeholders analysis made restates the fact that regional Councils do not function effectively; many who are asked to participate at the local and regional level in regional planning meetings do not see their efforts to have an impact over policy or planning; they feel disconnected from the decision-making that happens at central level and do not recognize their suggestions in final selection of projects. “Partnership” is not well understood, whether in terms of the layers of government, or in terms of shared public-private interests. Regional Councils do have a basis in law, but there is no mechanism to ensure their plans have adequate weight.

Under the above policy environment for regional development policy a new institutional design of the regional level of governance for the purposes of overseeing and coordinating Bulgarian regional development policy is a condition sine qua non in the reforms’ agenda. In this sense, to define the new role of the regions in coordinating and overseeing regional development policy, means above all to:
- Strengthen the six planning regions administrations at NUTS II level;
- To define the new role of regional governors and district councils in formulation and endorsement of regional policy.
 
IV. Policy responses
The new Regional Development Act enacted February, 5th, 2004 may well be viewed as a policy response of the Bulgarian Parliament to the need to redesign the institutional framework of regional development at regional level. How successful this attempt is a subject of the analysis to follow.
At the level of the 6 planning regions the institutional set up has been revisited. Thus, the new Regional Development Act provides for the establishment of regional councils for development in all 6 planning regions, meant as bodies to implement state regional development policy at the level of planning regions. These councils are to be chaired by regional governors of the constituent districts on rotation for a term of one year. The question to ask is whether the new institutional set up creates sufficient preconditions for the new councils to become flexible, proactive and pro-partnership institutions-motors for development at this level. Important policy issues arise in this respect. The first one relates to the composition of the councils. Their major constituents become appointees from the various Ministries and regional governors of the districts included who also are being appointed by the central executive power. In other words, again more de-concentration than decentralization is being effected. In this very format, notwithstanding the fact that a representation of the constituent municipalities is also being provided for, there are serious doubts as to whether the present composition of the councils sufficiently guarantees the representation of genuine interests of the regions and their the balance. As rigid as it stays now it remains uncertain whether this institutional set up will generate sufficient incentives for establishing public-private partnerships and involving larger number of stakeholders in the development process.
The second major issue relates to the role and responsibilities assigned to the new councils. Again, their role is more or less limited to coordination and consultation. Such allocation of competence supported by the fact that they have no powers related to financial management of funds for development raises serious concern. As long as these units do not become centers with real functions and role in programming, planning and managing by involving actively various stakeholders, encouraging their participation and so accumulating potential and experience, administrative capacity is hard to be built or imported from the centre.

With respect to regional governors, the policy response offered by the new Act is as follows. The regional governor has been assigned specific coordinative function with respect to the preparation and processing of the district strategy for development. He also is to support the preparation of municipal development plans and to coordinate the preparation of projects in accord with the district strategy for development and the regional plan for development. The new act, similar to the act of 1999 assigns to regional governors the role of facilitator rather than implementer and decision-maker in the sphere of regional development. Just as before, the district as a major level of planning remains detached from financing. The district administration, which is supported solely by the budget for implementing its daily activities and is not a primary distributor of credits is not in position to secure the actual implementation of plans. The new Act steps back from the idea of Regional Development Fund at central level, proposed by previous drafts. Such policy turn, reasoned in a not very convincing manner with the Currency Board Regulations, questions the feasibility of setting up regional development funds as well.

With respect to district councils for development, they are to be chaired by the regional governor. Their composition does not offer a satisfactory solution to the need to secure representation of the major stakeholders in the regional development sector. Thus, the Act does not provide for any representation of the private and non-governmental sector in the councils. The role of the district councils is also limited mostly to the acceptance of the regional strategy for development and the assessment of the initiatives of the municipal and non-governmental organizations related to the district strategy. Thus, by shifting from a case where district councils enact district plans for development presupposing operational list of activities, measures, etc./envisaged by previous drafts/ to a solution where district councils enact district strategies-which are  platform documents, the national legislator significantly undermined the role of district councils in planning regional development.
To summarize is that unfortunately neither the current, nor the new Regional Development Acts enacted offer a satisfactory solution to the number of interrelated and interdependent issues related to the participation of regional level of governance in formulation and endorsement of regional policy in Bulgaria. Referred to are policy problems associated with allocation of competences and responsibilities of institutions at regional level, inadequate application of the partnership principle, lack of financial competences at district level.
Major critical comment to the New Act focuses on its inability to secure sufficient representation and participation of stakeholders at regional level including economic and social partners in the activities in activities related to programming, planning and monitoring regional development. There is no mechanism for coordination of stakeholders at regional level with regards to planning. The experience of the other CEE countries demonstrates the use of applying a complex approach at this level for consolidated preparation of regional development plans, spatial planning acts and multi-annual financial-investment programs.

V.  Policy Options- Suggested  Framework for Reform
Against the background of the shifting context of regional policy in Europe after enlargement, there are various levels at which the future of regions for implementing regional development policy in Bulgaria needs consideration. At a pragmatic level, there are possible options that essentially entail adjusting current mechanisms to a greater or lesser extent to consider changing circumstances, cure weaknesses, achieve greater efficiency, etc.; in essence, these steps involve more continuity than radical reconsideration and shift of policy. At a strategic level, however, there is a case for revisiting some of the fundamental questions concerning the institutional design, formulation and implementation of regional policy in Bulgaria at regional level. With respect to the possible options, these theoretically range from maintaining the status quo with some minor modifications in revising the framework under the EU influence, at one extreme, to a radical change in regionalization in Bulgaria including introducing a second-tier of regional self-government, at the other end of the spectrum. Between these extremes there are several plausible option for furthering the regional policy institutional reform in Bulgaria.

Option 1- Maintaining the Current Policy Approach
Maintaining the status quo is a difficult task as the current system does not seem to be able to efficiently address regional development issues at regional level. Given the EU requirements Bulgaria has no other option, but to attempt to raise the efficiency of the institutional set-up for regional development by various measures. In this respect, maintaining the current policy approach will only be possible if some modifications are undertaken and the framework for compliance with the relevant EU requirements is revisited. In all cases, the costs of not moving towards greater efficiency need to be carefully considered.

Option 2- Radical Reform towards Establishment of Regional Self-government with broad competence with respect to regional development
Despite the progress in administrative decentralization made, a radical reform towards establishment of regional self-government, which is a costly and complicated undertaking, is not a priority in public reform sector. However, it does not exclude the evolution toward greater levels of regional self-government, if the country is committed to moving in that direction in the future. Besides that a well defined concept of the reform and public administration model is needed. The limited scope of powers and resources of regional governments   remains a concern. More extensive decentralization will depend on the approach of the central government though there is no sound evidence for the moment for such policy direction.

Option 3- Redefinition of Roles and Responsibilities of regional institutions responsible for Regional Development at  Legal and Operational levels, Optimizing Programming/Planning Cycle and Financing Mechanisms, Increasing Administrative Capacity;  Making PPP  operational, Integrating policies
This option is based on a gradual evolution of the current structure of the public sector, rather than on a dramatic, abrupt and costly change. As interrelated and interdependent as they are, the dimensions of the reform stated above have different weight in the reform process, but nevertheless produce a powerful impact on its development. Therefore, any meaningful change in the regional policy system requires that all elements of the system /legal framework, institutional set-up, programming/planning/financing/monitoring, integrating policies/ are reconsidered, redefined and operationalized.

VI. Policy Recommendations
In the following section, certain concrete steps are recommended aimed at defining the new role of the regions in Bulgaria in overseeing and coordinating regional development. They are based on the research report mentioned above and they also draw from the experience of some CEECs and from the recommendation of the international organizations, such as the EU, Council of Europe, the World Bank.
Naturally, institutional change can be achieved only by a constant continuous effort at improving definition of roles and responsibilities of institutions involved; the interrelations among them and capacity building at all levels of governance. The following are some major strategies for improving the current framework of institutions  for regional development at regional level:

1. Undertaking reform through amending relevant legislation and by-laws
An effort to present the framework for reform focuses primarily on redefinition of roles and responsibilities among all levels of public administration and argues for institutional reorganization. The idea builds on the existing framework of local, regional, and central units of government. District structures are maintained as the main operational structure at the district level and the EU planning regions are maintained to satisfy EU NUTS-2 planning and monitoring requirements. The proposed scheme provides for greater transparency, effectiveness and accountability in Bulgaria’s regional government structure. This is to be achieved by:

Stabilizing and clearly defining the role of the six planning NUTS regions. The adoption of the six planning regions also in the case of regional government generated problems in the integrity of the system.  As both planning regions and districts appear to be a meso-level of government and both have important role in regional development their relationship and scope of competence related to regional development needs to be clearly defined.

 Revisiting the institutional set-up at the level of planning region in terms of composition and competence of regional councils for development. More decentralization needs to be ensured with far more adequate presentation of the various stakeholders and balance and promotion of the specific interests of the regions. Subsidiarity principle needs to be reinstated.

 Redefining the role of districts in regional development, strengthening regional government by building a representative policy-making body (strengthening the authority and effectiveness of the “council”) and strengthening the role of the governor.  The district is the appropriate nexus to coordinate central government and local government policies and plans and to formulate programs that are of greater than purely local interest. To fulfill this role, the role of the regional governor as the administrative head and coordinator of central government services in the district must be strengthened with a view toward greater representation. The administrative role of regional governors must be expanded by consolidating de-concentrated central government management and monitoring obligations at the regional level. The Governor should act as the single official government representative, representing line ministries at the regional/district level. Also, regional administration should be strengthened to ensure greater horizontal coordination. A fundamental issue is the financial aspect of regional government operations. The current status of dependency and subordination of regional governments to the state should be considerably reduced. Financial and operational capacity is needed at regional level to enable quick decisions on the real financial and property base, consolidate regional budgets and enhance decision-making and programming activities. This should include responsibility over ministries’ regional financial allocations. Each Governor should have responsibility over his district’s development finances. The consolidated funds managed by the Governors for co-financing of approved regional/district-based projects will be transferred to the beneficiaries under contracts signed by the Governor and by the Development District Council. In this respect, the competence of regional governor should be expanded as to include responsibility for distribution of financial resources from the ministries to the districts. A policy option here is that district administrations become juridical persons and primary distributors of budget credits. Each regional governor should carry responsibility for the finances related to the development of the district. Regional governors together with the district council should be made able to conclude agreements for approved district projects with the other participants. In this relation, he should also be given the competence to transfer to its beneficiaries the consolidated financial means, managed by him and directed for joint financing of the approved district projects. At the same time, strengthening decision-making about development planning and increasing the importance of resource allocation decisions at the regional level brings with it the need to improve governance structures at that level. Resource allocation decisions must be made in a transparent and accountable manner.

 The policy making authority and representative character of district development councils must be strengthened and their effectiveness improved. The District Council becomes the deliberative body responsible for approving development strategies and plans and coordinating local programs. Broader representation of the district council is needed, in particular participation of the business sector and a larger segment of non-governmental organizations. In addition to partnerships with the private sector, the emergence of civic leadership to identify, respond and mobilize citizens/NGO interests needs to be encouraged. A mechanism (legal and financial) and the practice for broader involvement of stakeholders and interest groups in the planning and implementation process should be created. In any circumstance, the number of council members should be kept relatively small to promote efficient decision making.

 Releasing Central Government from day-today reactive relationships with local issues and allow them to focus on countrywide policies and projects.
Completing decentralization at local level and especially the financial decentralization of local governments; increasing the capacity of municipalities to absorb EU funds and mobilize required local revenues and human resources; facilitating increased coordination and cooperation among local governments on local and regional development issues.
As to effect the above improvements and changes, the following laws will need to be amended.  In the drafting process proposals should be discussed among all affected groups and supported by professional assessments and selected case studies to highlight potential impacts. Regional Development Act should be amended to redefine the structure of the regional councils for development in the planning regions and district development councils at district level, to define the new role of the Governor in overseeing and coordinating regional development planning and implementation. The Law on the Spatial Planning Act should be amended to verify and strengthen the linkages between special and regional development planning. The Laws on Administrative and Territorial Division and Law on the Administrative Servicing of Natural and Legal Persons need amendment as to redefine the position of the Governor as a unified administrator of the consolidated portfolio of activities at the district/regional level. (This may also require changes in the law on Public Finances).  By-laws regulations should be prepared in accordance with the amendments among the related laws to provide a comprehensive and integrated approach and the opportunity to both ensure complementarity and the identification potential conflicts in implementation.
The objective of the by-laws, among others, should be to increase the transparency within the planning and implementation process.

2. Institutional reform
The danger of deadlock in a multi-level framework with a high number of participants and diverse areas of independent policy making can be successfully circumvented by differentiation of decision-making structures and a balanced mixture of different modes of governance /hierarchy, competition and cooperative networks/.
Therefore, the process of building up the institutional structure of regional development in Bulgaria at regional level needs to not only build up the responsible institutions and define their role, responsibilities and competences; but to also building up the inter-institutional and internal relationship among the various units based on efficiency, transparency, coordination and partnership and building up the administrative capacity at all levels.
Coordination between various units of regional development institutional structure becomes a matter of increasing concern. The more the administrative units become in number the more difficult their coordination turns. Coordination in this context means to guarantee compliance, consequences and consistency among various strategies and policies; and negotiate and reach agreement among various participants.
The above recommendations may be effected through improving the inter-institutional and internal arrangements between various units;  improving the use of policy tools, communication strategy, implementation, monitoring and evaluation,  dissemination of good practices.

3. Building capacity
Within the institution-building process strong emphasis requires capacity-building within institutions-which is meant as a capacity to participate, formulate, manage, implement and assess in accountable and transparent way.
 
 

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