Optimus - Center for Good Governance

Improving Environment for Businesses at Local Level through Regulatory Reform

About the Project

The Project "Improving Environment for Businesses at Local Level through Regulatory Reform" was set up to contribute to a better business environment in local communities in Serbia, and therefore to a higher level of attraction of private investments. Special attention was dedicated to one of the main obstacles - long and unnecessary complicated local administrative procedures that slow-down business operations and adversely affect the local economy and employment.

Business-related administrative procedures and processes are usually overburdened and require serious attention at both, central and city/municipal level, in order to stimulate a more conducive business environment. In addition, the business community in Serbia constantly stresses the need to improve the regulatory framework necessary to facilitate the business operations.

As a result of a joint initiative, the Conference of Towns and Municipalities - Association of Towns and Municipalities in Serbia (SCTM) and OPTIMUS - Center for Good Governance, launched the Project "Improving Environment for Businesses at Local Level through Regulatory Reform", supported by the State Secretariat for Economic Affairs (SECO).

The Project started in December 2011 and completed on 31 May 2015. The Project was built on the results of the Sub-national Competitiveness Project, implemented by the Internatiomal Finance Corporation (IFC) in the period 2007-2010, providing further support to the regulatory reform process in Serbian local governments, all in line with the relevant national strategies. The overall goal of the Project was to produce better business enabling environment in local communities in Serbia. This goal was reached by simplifying business-related local administrative procedures, in order to:

• Reduce the costs and time required from businesses;
• Build sustainable regulatory mechanisms for new, low cost and low risk regulations;
• Increase transparency and efficiency of public administration at the local level.

Activities

Component 1 of the Project, implemented by the Standing Conference of Towns and Municipalities, included:

• Development of models for selected sets of simplified administrative procedures, especially in less developed municipalities,
• Testing the models through the implementation in 10 selected municipalities,
• Capacity building of local administrative staff, and
• Offering models to other interested municipalities throughout Serbia, with additional assistance in the implementation.

Component 2 of the Project, implemented by the OPTIMUS - Center for Good Governance, included:

• Systematic regulatory reform of business administrative procedures in six selected cities/municipalities (Kraljevo, Leskovac, Novi Pazar, Loznica, Gornji Milanovac i Sombor );
• Introducing principles of regulatory impact assessment (RIA) when preparing local regulations;
• Introducing electronic registries of administrative procedures, and
• Capacity building of local public officials and employees.

Achieved Results of the Project Component 2

Achieved results planned by the Project document

• Total 19.36 million euros of direct and indirect private sector savings on annual basis in selected locations, which leads to the ease of doing business and increased competitiveness of the location;
• Improved efficiency, simplified procedures and reformed administrative processes through the adoption of 2.964 recommendations to streamline 635 business administrative procedures in 6 local governments;
• Increased transparency through publicly available, legally secure electronic registry of administrative procedures in 6 local governments, increasing access to information and reducing opportunities for corruption. Links to e-registries are as follows:



•   E-registry of administrative procedures in Kraljevo;

•   E-registry of administrative procedures in Leskovac;

•   E-registry of administrative procedures in Novi Pazar;

•   E-registry of administrative procedures in Loznica;

•   E-registry of administrative procedures in Gornji Milanovac;

•   E-registry of administrative procedures in Sombor;



• Improved quality of regulations and procedures, through adoption of 54 local legal acts;
• Improved institutional mechanism, through the establishment of 6 regulatory bodies at the local level;
• Out of 296 recommendations of the private sector to improve local administrative procedures, 280 recommendations were adopted (95%), and 15 partially adopted;
• 39 trainings organized for 697 participants (404 women) and 92.3% of participants claiming satisfied or very satisfied with the training;
• 25 focus groups organized, with the participation of 158 private sector representatives;
• Established vertical connections, through drafting of a set of recommendations for the improvement of laws and other regulations and their referral to relevant national bodies.

Achieved results as added values to the Project

• Simplified and improved 454 citizen related administrative procedures in 6 local governments;
• Total of 17.4 million euros of direct and indirect private sector savings on annual basis in 6 local governments, thanks to the adopted recommendations of the new Law on Planning and Construction (2014). The recommendations are the result of simulation of obtaining construction permits, in accordance with one of the drafts of the Law, made in cooperation of OPTIMUS, USAID BEP and the Standing Conference of Towns and Municipalities. Total savings at the national level, on the basis of adopted recommendations from the simulation, are estimated at 75.08 million euros annually.
• Preparing 5 additional sets of recommendations for different versions of the draft Law on Planning and Construction, which were submitted to the competent authorities, and of which a large number was adopted in the final version of the Law;
• Professional and technical assistance to the Ministerial Working Group in drafting the Rulebook on Unified Procedure as a key subordinate legislation, with the first draft of the act produced by the OPTIMUS (Rulebook was adopted on 27 February 2015);
• Expert and technical assistance to the Project local governments to modify procedures, in accordance with the new Law on Planning and Construction and in establishing the Unified Procedure;
• Preparing a set of comments on the Strategy for the Development of Entrepreneurship and Competitiveness 2014-2020 and its Action Plan, and its referral to the Ministry of Economy of the Republic of Serbia;
• Preparing a set of comments on the Strategy of Public Administration Reform 2014-2016 and its Action Plan, and its referral to Ministry of Public Administration and Local Self-Government.

More information on the results can be found in the brochure Regulatory reform on the local level - challenges and results.

To find out more about regulatory reform, please see Guide through regulatory reform as a tool of economic development.