Decentralization and Municipal Support (DEMOS III)

DEMOS III will consolidate achievements of decentralised governance in the areas of policy framework and municipal performance. A grant mechanism rewarding municipalities for their good governance practices will be institutionalised with the aim to offer better quality services to citizens. The Association of Kosovo Municipalities (AKM) will strengthen its advocacy role and citizens will be engaged in the oversight. Funds will be pooled by Switzerland, Sweden, Norway, the EU and the Government of Kosovo.  

Country/region Topic Period Budget
Democratic participation and civil society
01.01.2022 - 31.12.2025
CHF  8’278’000

Kosovo has made progress in local governance over the last decade. For instance, the political leadership at municipal level is more citizen-oriented and has a clearer vision for its development. However, several issues remain. Municipal financing is inadequate, local democratic practices and culture are underdeveloped and municipal service provision is insufficient. The outbreak of Covid-19 pandemic is confronting municipalities with additional short and longer-term challenges.

The protracted political polarisation leading to frequent changes of national government and low efficiency of the parliament over the last three years has hindered the advancement of envisaged reforms, including those pertaining to municipal funding. The mandate of the newly elected municipal leaderships (elections in Fall 2021) will be mostly parallel (3 out of 4 years) to that of the recently elected central level government, thus potentially creating a period of political stability.  


Municipalities improve their democratic governance.

Theory of change:

Greater citizen engagement, a stronger oversight and a policy framework that assures sustainable and credible rule-based financing of municipalities, including the Municipal Performance Grant (MPG), will provide increased incentives and pressure to improve municipal governance and management. This is expected to result in an improved local democratic governance, better services and citizens’ satisfaction.   

Target groups
  • All 38 municipalities of Kosovo (direct beneficiaries), covering the entire population of over 1.8 million (indirect beneficiaries). Of 38 municipalities, 10 are Serb-majority populated, including four in the North of Kosovo, which are less integrated in the Kosovo systems compared to other municipalities.
  • The Ministry of Local Government Administration (MLGA), the Ministry of Finance, Labour and Transfers (MLFT) and the Association of Kosovo Municipalities (AKM).  
Medium-term outcomes
  1. The Municipal Performance Grant is credible, effective and fully institutionalised.
  2. Local oversight and citizen engagement mechanisms are functional.
  3. The policy framework is more conducive to rule-based financing of municipalities.
  4. The Association of Kosovar Municipalities is effective in advocating on behalf of municipalities and in serving the needs of member municipalities.

Expected results:  

  • Sufficient capacity is developed in MLGA and municipalities to fully manage performance systems and processes.
  • MPG is open to public scrutiny.
  • Strengthened capacities of municipalities for citizen engagement.
  • Strengthened capacities for oversight and monitoring of municipalities (by relevant municipal committees, local media, etc.).
  • Support is provided to draft, implement, and monitor the policy framework for rule-based financing.
  • AKM successfully implements its Strategic Plan 2021-2025. 

Results from previous phases:  

Experience from two previous DEMOS phases shows that introducing a mechanism and adequate incentives within the country system for improved municipal performance holds promising potential for achieving relevant, effective and sustainable systemic change. During DEMOS II, the MPG mechanism was further developed and up-scaled for a country-wide outreach (all 38 municipalities). Four MPG cycles were successfully implemented and the average performance scores of municipalities have improved. The Ministry of Local Governance Administration (MLGA) took over the ownership of MPG and is increasingly handling its management with support by DEMOS.

Results of phase II include: i) municipalities have implemented capital investment projects which have beneficial effects for over 600,000 citizens in 32 municipalities in Kosovo (50% women and 20% minority communities); ii) 35 municipalities were able to increase property tax collection and the rates are higher among high performing municipalities;
iii) more than 70% of surveyed citizens consider that municipal service delivery has improved in the last three years; iv) AKM has effectively represented municipal interests in dialogue with the central level.

Directorate/federal office responsible SDC
Project partners Contract partner
International or foreign NGO
Private sector
Swiss Non-profit Organisation
  • HELVETAS Swiss Intercooperation
  • Foreign private sector South/East
  • Swiss Private Sector

Other partners
  • Helvetas Swiss Intercooperation (HSI) (phase I awarded through open tender) for outcomes 1, 2 & 3.
  • Association of Kosovar Municipalities (AKM) (core contribution) related to outcome 4.
Coordination with other projects and actors
  • Democratic Society Promotion (DSP);
  • SAEK (anticorruption programme);
  • SDC Health projects and SECO financed IFC project operating at municipal level;
  • Projects: USAID/KSCA, GIZ/CER, etc.
Budget Current phase Swiss budget CHF    8’278’000 Swiss disbursement to date CHF    5’755’231 Total project since first phase Budget inclusive project partner CHF   17’640’000
Project phases Phase 3 01.01.2022 - 31.12.2025   (Current phase) Phase 2 01.01.2018 - 31.12.2021   (Completed) Phase 1 01.01.2014 - 28.02.2018   (Completed)