Financial accountability. When budget accountability for local initiatives remains the direct responsibility
of central government, flexibility and differentiation are difficult to achieve; therefore, devolution of financial
accountability is also needed. This also requires the development of appropriate management procedures
to ensure efficiency and effectiveness.
Local capacities. Stimulating local development requires highly active local leadership, entrepreneurial
management and business development skills. During the many decades of centralised development, the
development of these skills, which constitute a form of ‘social entrepreneurship’, was not encouraged. The
skills required to adapt the local economy to the demands of globalisation remain in short supply at the
regional and local level in the transition economies.
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