Showing Progress towards Innovative and Good Governance in Albania

The Government of Albania in partnership with UNDP Albania Showing Progress towards Innovative and Good Governance in Albania (Post-2015 Sustainable Development Goal (SDG) Pilot) Phases I & II November 2015 This Report was prepared with the special assistance of Mr. Richard Flaman (rflaman@sympatico.ca) international consultant Mrs. Nevila Como (como.nevila@gmail.com) local consultant

CONTENTS Section Page 1.0 SUMMARY... 1 2.0 Introduction and Context... 7 2.1 Overall Context... 7 2.2 The Future We Want... 8 2.3 Purpose of the Pilot... 9 2.4 Organization of this Report... 10 3.0 Method and Approach... 11 3.1 Scope of Governance... 11 3.2 Criteria for Selecting Governance Indicators... 13 3.3 Identification and Analysis of Sources for Governance Indicators... 13 3.4 Selection of Potential Governance Indicators for the Pilot... 14 3.5 Assumptions and Constraints... 14 4.0 Analysis and Selection of Governance Indicators... 15 4.1 National Strategy for Development and Integration (2015-2020)... 15 4.2 Public Financial Management Strategy (Draft) 2014-2020... 19 4.3 Justice Inter Sectorial Strategy (2014-2020)... 20 4.4 Public Administration Reform Strategy... 22 4.4.1 Decentralisation Strategy... 27 4.5 Digital Albania Sector Strategy... 28 4.6 Public Order (State Police) Sector Strategy... 29 4.7 Anti-Corruption Sector Strategy... 30 4.8 EC Indicative Strategy Paper (2014-2020): EC-GoA Agreed Indicators... 32 4.9 World Bank Study on West Balkans Sector Indicators... 33 4.10 Current Albania MDG-9... 35 4.11 Global Partnership for Effective Development Cooperation (Paris/Busan indicators)... 37 4.12 Open Working Group on Sustainable Development (OWG)... 38 4.13 Open Government Partnership... 40 4.14 Global Initiative for Fiscal Transparency... 41 4.15 Other Potential Sources... 42 5.0 Proposed Pilot Governance Targets and Indicators... 43 5.1 Narrowing Down the Number of Potential Indicators... 43 5.2 Proposed Set of Pilot Indicators... 43 5.3 Other Combinations... 47 Phase I & II Report i

ANNEXES TABLES 6.0 Next Steps and Issues... 47 Annex 1. Synopsis of Definitions of Governance Albania SDG Governance Pilot... 49 Annex 2. Criteria for Selection of SDG Governance Indicators for the Pilot... 57 Annex 3. National Indicators agreed between the EC and GoA in the Context of the CSP... 60 Annex 4. National Indicators from the CSP as Proposed by the EC... 62 Annex 5. Master List A. Selected Governance Indicators organized by Major Source... 65 Annex 6. Master List B. Selected Governance Indicators, Relationship to Major Dimensions of Governance... 74 Annex 7. Master List C. Selected Governance Indicators, Relationship to The Government s Six Priorities... 83 Annex 8. Linkages between the NSDI 2015-2020 and the Sustainable Development Goals... 93 1. Proposed governance indicators sourced from the NSDI (2015-2020)... 16 2. Proposed governance indicators sourced from the PFMS (2014-2020)... 20 3. Proposed Justice-related indicators sourced from the Justice Results Matrix and CSP... 21 1.1 Proposed governance indicators adapted from the Public Administration Reform Strategy.23 4.2 Proposed governance indicators adapted from the SIGMA Indicators..25 4.3 Proposed governance indicators adapted from the Decentralization and Local Government 2015-2020..26 5. Proposed governance indicators adapted from the Digital Albania Strategy 2015-2020..28 6. Proposed governance indicators adapted from the Public Order Sector Strategy... 30 7. Proposed governance indicators adapted from the Anti-Corruption Strategy 30 8. Proposed governance indicators sourced from the CSP (2014-2020)... 32 9. Proposed indicators extracted from the WB Developing Sector Level Indicators Study... 34 11. Proposed governance indicators selected from the current MDG-9 goal... 36 12. Proposed governance indicators adapted from the Global Partnership (Busan)... 38 13. OPG governance dimensions and measurement indicators... 41 14. Proposed Set of Pilot governance targets / indicators... 44 Phase I & II Report ii

ACRONYMS AKKP CSP DDFFA DoPA EC ECHR EU FDI FH GIFT GoA HDI ICT IMF LFS MDG MoARD MoEDTTE MoF MoI MoJ MoSWY NAIS NSDI OPM OECD OPG OWG PEFA PFM PFMS RWB TI SDG SPC UNDP UNHCR WEF WJP WB WBI Agency for Compensation and Restitution of Properties Country Strategy Paper (EC) Department for Development Financing, and Foreign Assistance Department of Public Administration European Commission European Court of Human Rights European Union Foreign Direct Investment Freedom House Global Initiative for Fiscal Transparency Government of Albania Human Development Index Information and Communication Technology International Monetary Fund Labour Force Survey Millennium Development Goal Ministry of Agriculture and Rural Development Ministry of Economic Development, Tourism, Trade and Entrepreneurship Ministry of Finance Ministry of the Interior Ministry of Justice Ministry of Social Welfare and youth National Agency for Information Society National Strategy for Development and Integration Office of the Prime Minister Organisation for Economic Co-operation and Development Open Government Partnership Open Working Group Public Expenditure and Financial Accountability Public Financial Management Public Financial Management Strategy Reporters Without Borders Transparency International Sustainable Development Goals Strategic Planning Committee United Nations Development Program United Nations High Commission for Refugees World Economic Forum World Justice Project World Bank World Bank Institute Phase I & II Report iii

1.0 SUMMARY Context. In mid-2014, the Office of the Prime Minister (OPM) and the United Nations Development Program (UNDP) entered into a partnership to carry out a pilot project to develop and test governance targets and indicators to feed the United Nation s post-2015 Sustainable Development Goal (SDG) framework. The pilot project has national and global dimensions. At the national level, the pilot project will provide expertise to integrate good governance performance measures and indicators into the National Strategy for Development and Integration (NSDI, 2015-2020) as well as increasing capacity for gathering, monitoring and analyzing data for the selected indicators as a baseline for the strategy. At the global level, the project will support the Government of Albania (GoA) to share their experiences to inform the development of the Millennium Development Goals (MDG) successor framework, or Sustainable Development Goals (SDG), for the post-2015 agenda in the area of rule of law, effective and capable institutions. The scope of the pilot focuses primarily on the underlying principles of innovative and good governance: accountability, transparency, participation and predictability. These are priority cross-cutting themes throughout the NSDI and sector strategies. Criteria. The number of governance indicators, as implied from the broad scope of governance, is indeed potentially very large. So, the indicators selected needed to: 1. fit within the government framework, that is, be reflected in the NSDI and/or sector strategies; 2. fit in with the United Nations post-2015 SDG framework; 3. exhibit a certain degree of balance in terms of some that would be selected from global or world-wide sources, and those that would be sourced from national sources; 4. be objectively verifiable; 5. have supporting systems for measuring and reporting that are in place; 6. be simple and implementable, often referred to as SMART ; 7. constitute a small number of targets and supporting indicators to ensure manageability; and 8. have the potential for disaggregation, where complex or composite indicators are considered. Method. The pilot project consists of three phases. The first phase (September-December 2014), focused on the selection of a set of Albania-based governance indicators that will be subject to special monitoring and reporting. The second phase (July September, 2015) finalised the selected set of governance indicators in coordination with the finalisation of the NSDI and other relevant sector strategies. This report presents the results of the first two phases, emphasizing the final set of governance indicators. Final Draft, November 2015 1

The third phase, planned for the period October-December 2015 (and perhaps extending into early 2016), will focus on: (1) the monitoring of the agreed targets and indicators which have become part of the National Strategy for Development and Integration, and the sector strategies; and (2) the development of a case study on governance as a strategic priority and the Government s intent to institutionalize the measuring of progress in this area as a contribution to the development of sustainable development goals. The GoA will implement the systems and processes for the measurement, monitoring and reporting on the selected indicators. Several major sources were used to identify and select proposed governance indicators. These included primarily the NSDI and available key governance related sector strategies on public finance, justice, public order, public administration, anti-corruption, the European Commission s (EC) Indicative Strategy Paper (2014-2020), among others. From these a master list of some 70 potential governance targets and indicators were identified. These were then analysed in terms of their relative fit or support to the Government s six strategic priorities, and also to the main principles of governance noted above. Proposal. Based on the analysis, a set of 21 or so governance indicators are proposed for the pilot project. These are presented in the following table, along with targets, baselines and sources of data where this information is currently available. The indicators are organized according to the NSDI 2015-2020 pillars. 1 Proposed set of pilot governance targets / indicators NSDI Pillars Proposed Indicators Data Source Baseline Target Year Value 2020 1.0 FOUNDATIONS: GOOD GOVERNANCE, JUSTICE & RULE OF LAW 1.1 Judicial Performance Index - Increased efficiency of courts work by reducing 20-30 % the number of pending cases compared to the number of cases registered for judicial review Latest available value: 2013-37.9%; 2017 target: 30-35% (Source: NSDI Section 8.1 / NSDI - 1.1) 1.2 Increased enforcement of judicial decisions / Measured by the increased level of enforcement of judicial judgments in accordance with the European standards/ measured by Freedom House (Source: NSDI Section 8.1 & Justice strategy - 3.8) MoJ 2012 19.30% 20-25% FH 2013 49 / 196 Increasing Trend near the top 3rd quartile of the countries 1 Please note that the numbering references in brackets after each indicator refer to the source and listed number of the indicator as presented in section 4 and Annexes 5-7 of this report. This facilitates quick cross-referencing for the proposed indicators. Not all of the information was available for baselines and targets. Final Draft, November 2015 2

NSDI Pillars Proposed Indicators Data Source Baseline Target Year Value 2020 1.3 Access to justice for entitled groups, by penal or civil code / Measured as Ratio of the number of persons benefiting from legal aid / number of persons requesting free legal aid for the two categories, by sex and age; Last available value: 75.34% (until July 2015 25 female and 36 male requested legal aid); 2017 Target: 45% (target to be disaggregated by sex) (Source: NSDI Section 8.1 NSDI 1.2) MoJ 2012 72.58% (1 female and 11 male requested legal aid) 48% (target to be disaggregated by sex) 1.3 "Fundamental Rights" Indicator /Press Freedom - Average of Freedom of Press 1 (very good) - 100 (very bad) (inverted value); 2017 target: 30.50 (Source: NSDI & CSP) Freedom House, Reporters sans frontier 2010 35.75 28.25 1.4 Indicator of public trust for reporting to the police through the system - Increased public trust in the police / measured by an increase in the number of public calls to police to achieve 16% increase by 2020 (Source: NSDI 1.7 & Strategy of Public Order 6.6) MoI 2014 190,932 223,000 1.5 Composite indicator 'Fight against corruption' - Average of global corruption and the corruption control 1 (very bad) - 100 (very good)) 2017 Target: 38.20 (Source: NDSI (7.6) /CSP) TI, World Bank 2012 29.9 51.33 (Very Good) 1.6 Improved rank of Albania in Transparency International s corruption index (as an observation; (Source: NSDI - 1.8) (EU: average score: 63.29; rank: 36); TI 2013 116/177 Increasing trend 1.7 Improvement of Transparency Index during the policy-making process by the Government / Measured using the World Economic Forum with a score from 1 (minimum) to 7 (maximum) - (2015 value: 4; 2017 target: 5) (Source: SIGMA indicator & PAR Strategy - 4.2 & NSDI) 1.8 The number of complaints relating to recruitment in the civil service accepted by the court (starting from the second half of 2014) is decreasing (Source: PAR Strategy Indicator 6.c & SIGMA & NSDI). 1.9 Governance & PAR / Composite indicator measured as average of Government Effectiveness, Burden of Government Regulation and Regulatory Quality): 1 (Worst) - 100 (Best)] Target for 2017: 60.19 (Source: NSDI / & CSP 4.12) WEF evaluation SIGMA SIGMA (DoPA) TI, World Bank, WEF 2012 4.37 6 2014 20% 2012 53.34 63.19 Final Draft, November 2015 3

NSDI Pillars Proposed Indicators Data Source Baseline Target Year Value 2020 1.10 The extent to which policies for the provision of services focusing on the citizen are adopted and applied in practice (Source: PAR Strategy & SIGMA indicators Scale: 0 to 5 0= Worst/none of elements are met & 5=best) (4.11) - Currently NOT in the NSDI SIGMA 2014 2 Increasing Trend 1.11 Level (%) of public satisfaction vis-à-vis the quality of service delivery (PAR Strategy Indicator 8.b) (Source: PAR Strategy 4.10) OPM Delivery Unit / MoIPA/ 2015 Growing Trends 2.0 ENSURING MACRO ECONOMIC AND FISCAL STABILITY 1.12 Financial strengthening rate for LGU Ratio of own revenue of LGU for intergovernmental transfers Ratio of Unconditional Transfer to Local Revenues (%)/ 2017 Target: 40/60 (Source: NSDI Section 8.5 & Decentralisation Strategy 4.26) 2.1 Easily accessible, high quality and comprehensive information on Albania s public finances / Improvement in Albania s ranking in Transparency International s open budget index (OBI - measured on a scale from 1=lowest to 100=highest); latest available value: 2015: 38; 2017 target: 60 th rank (Source: NSDI Section 9.2 & PFM Strategy - 2.8) - 2.2 Increased Effectiveness in collection of payments and taxes / measured as factual collection/taxation obligations exceed; latest available value: 2013: 90%; 2017 target 95% (Source: NSDI Section 9.2 & PFM Strategy) 3.1 Increased FDI volume / measured as a percentage share of GDP 2017 target: 8.8% (Source; NSDI Section 5.4 / NSDI - 1.21) MoF 2012 45%/55% 35%/65% TI MoF 2012 47 70 th rank IMF 2012 98.5% 95% MoF 2012 6.3% 9% 3.0 COMPETITIVE MARKET ECONOMY 3.2 Establishment of Enterprises (new businesses a year, by sex of owner / measured as share of female/male owners of new Enterprises established in a year 2017 target: 32.5% by women, 67.5% by men (Source NSDI section 10.2 / NSDI 1.20) MEDTTE INSTAT 2012 12,828 new enterprises 30.1% by women, 69.9% by men 34.5% by women, 65.5% by men 3.3 Online services index (Index measures the purpose and quality of online services. It shows the ranking of Albania towards other countries); last available value: 2014-0.4488; 2017 target: growth by 20% (Source: NSDI Section 10.4 & Digital Albania Strategy - 5.1) UNPAN 2012 0.4248 Growth by 30% Final Draft, November 2015 4

NSDI Pillars Proposed Indicators Data Source Baseline Target Year Value 2020 4.0 SUSTAINABLE GROWTH THROUGH EFFICIENT USE OF RESOURCES 5.0 SOCIAL DEVELOPMENT AND COHESION THROUGH INVESTING IN PEOPLE 3.4 Increased Number of cadastral areas where the initial registration has ended / measured as Number of Cadastral Zones in the Registration System; Last available value: 2014 87%; 2017 target: 100% (Source: NSDI Section 10.1 / NSDI - 1.18) 4.1 Increased access to water / measured as % of population supplied with water in urban and rural areas Latest available value 2013: 80.6%; 2017 Target: 98/85 (Source: NSDI Section 12.8 / NSDI 1.25) 4.2 Increase cash-collections from electricity sales to 93% by 2020/ Latest available value: 2013-79.3%; 2017 target: 92% (Source: NSDI section 12.1 indicator 3 / NSDI 1.27). 5.1 Increased percentage of women s employment in the public sector in 4 highest positions/ measured as Increase in % of women and girls 4 highest positions according to the Civil Servant Status; last available value: 2013: 29%; 2017 target: 29% (Source: NSDI Section 11.7 / NSDI - 1.24) 5.2 Decrease Youth unemployment level for the age group 15-29 years, by sex / measured by the rate of youth unemployment representing the unemployed youth as a percentage of the labour force (%); Last available 2014 value: 34.5% total, 37.3% female, & 31.8% male; 2017 target: 35% total, 30% female, & 40% male; (Source: NSDI Section 11.3 / NSDI 1.26) IPRO 2012 85% 100% MoT/ INSTAT 2102 79.9% 100% 95% MoEnergy 2012 83% 93% INSTAT 2012 24.30% At least 30% INSTAT / (LFS) 2012 40,3% total 33,8% female 43,6% male 30% total 25% female 35% male The UN has decided that the timeframe of the post-2015 SDG period will extend to 2030. This time period corresponds to that of the initial 15 year MDG timeframe. This timeframe also seems reasonable in light of Albania s progress to achieve EU membership status within this general timeframe. The first and most important area is in good governance, justice and the rule of law where about half of the proposed indicators are to be applied. The remaining indicators are distributed across the remaining pillars, corresponding to both the Government s six key priorities and the longer term EU integration and national development goals. Steps undertaken in each phase and next steps. Final Draft, November 2015 5

Phase I (June December 2014) and Phase II of the project (July September 2015) consisted of the provision of technical assistance in measuring and reporting on the selected pilot indicators. As noted, Phase 3 will focus on the monitoring of governance based on the selected indicators and the preparation a case study on the pilot experience to inform the post-2015 development agenda. The major activities which were undertaken for Phases I and II are as follow: 1. Initial proposal of the set of indicators. During Phase I, June- December 2014 in cooperation with the Department for Development, Financing, and Foreign Assistance (DDFFA), a set of 20 or so governance indicators are proposed for the pilot project. 2. Amendment of the set of indicators. During the period July-September 2015, the DDFFA revised the set of indicators and agreed on an amended set of governance indicators to be considered in the pilot. This was done during the same process as the drafting of the NSDI and agreement on the set of indicators which will be used to monitor the progress in implementing the NSDI 2015-2020. 3. Validation of the selected indicators. A validation assessment confirmed the sources of data, the owner of the data (i.e. institution or organization responsible for producing the data), the current systems used to produce the data, and for those indicators that may require systems work, a quick assessment of time/resources needed to develop/implement supporting measurement/reporting systems. This step is undertaken along the NSDI preparation process. 4. Revision of the set of indicators where needed. In the cases when it was decided that certain indicators would require too much work or resources to include in the pilot, the selection was adjusted based on accepted feasibility of using the re-selected indicator(s). 5. Completion of basic information. Missing information was filled in for each indicator, such as baselines, current values, and government to set targets for 2030. The major activities for Phase III (October December 2015, or early 2016) are: 1. Monitor governance in the National Strategy for Development and Integration and sector strategies based on the selected indicators. Technical expertise is to be provided during the process of monitoring the agreed targets and indicators which have become part of the National Strategy for Development and Integration, and the sector strategies. 2. Develop a case study on governance in Albania to share at the global level the progress achieved, the importance and commitment towards governance as a strategic priority and the Government s intent to institutionalize the measuring of progress in this area as a contribution to the development of sustainable development goals. Similarly, technical assistance will provided to support this activity. Final Draft, November 2015 6

2.0 INTRODUCTION AND CONTEXT 2.1 Overall Context One of the main outcomes of the United Nations Conference on Sustainable Development (Rio+20), held in Rio de Janeiro in June 2012, was the agreement by Member States to launch a process to develop a set of Sustainable Development Goals (SDGs) that will build upon the MDGs, the process and measurement of which ends in 2015. The United Nations has successfully concluded the process leading to the establishment of the of post-2015 development agenda. The results of this are contained in the outcome document entitled Transforming our world: the 2030 Agenda for Sustainable Development 2. This Agenda is a plan of action for people, planet and prosperity. It also seeks to strengthen universal peace in larger freedom. The UN Open Working Group (OWG) submitted a proposal of a set of 17 goals and 169 targets for discussion and endorsement at the meeting of the UN General Assembly. The Heads of State and Government and High Representatives, meeting at the United Nations Headquarters in New York from 25-27 September 2015 adopted a historic decision on a comprehensive, far-reaching and people-centred set of universal and transformative Goals and targets. They committed themselves to working tirelessly for the full implementation of the Sustainable Development Agenda by 2030, aiming to achieving sustainable development in its three dimensions economic, social and environmental in a balanced and integrated manner. The goals aim, between now and 2030, to end poverty and hunger everywhere; to combat inequalities within and among countries; to build peaceful, just and inclusive societies; to protect human rights and promote gender equality and the empowerment of women and girls; and to ensure the lasting protection of the planet and its natural resources; to create conditions for sustainable, inclusive and sustained economic growth, shared prosperity and decent work for all, taking into account different levels of national development and capacities. Global indicators are also developed to ensure that all countries can report on progress on a comparable basis. At the national level, the new Albanian Government which was formed after the parliamentary elections of June 2013 identified six national strategic priorities: 1. Innovative Good Governance 2. Access to Clean Water 3. Energy 4. Foreign Direct Investments 5. Land and property 6. Structural Reform of the tax system These priorities are over-arching and cut across most sectors of the NSDI which is currently in the 2 United Nations, Transforming our world: the 2030 Agenda for Sustainable Development https://sustainabledevelopment.un.org/post2015/transformingourworld Final Draft, November 2015 7

process of finalization. At the center of the national priority on innovative good governance is citizencentered services which demonstrates the government s commitment toward service delivery and accountability of public services. A public service mall to offer high impact services is under consideration, and this is considered to be the symbol of the Government s effort to modernize the governance system in Albania. At the global level, results from the monitoring of governance processes and performance of state institutions have provided insights as to how governance standards and principals, including transparency, participation, and accountability, are applied at the country level. Experience has shown that the majority of countries provide insufficient information and few opportunities for public engagement in governance processes. National oversight institutions and systems are often strong in terms of institutional definition and enabling legislation, but often fall short in important areas, such as implementation and enforcement of legislation and regulation. Although gradual progress is being achieved, the pace of governance performance monitoring remains slow. Unless there are major changes, it may require a generation or more for the majority of countries in the world to attain adequate levels of accountability and transparency. On the positive side, international experience has shown that transparency coupled with opportunities for public participation and accountability have enabled effective public monitoring that exposes corruption and better matches national resources with national priorities. At the same time, and partly driven by such evidence, a global consensus has emerged on the need to promote more open government practices in order to improve both governance and development outcomes. This has spurred the creation of high-profile multi-stakeholder transparency and accountability initiatives, such as the Open Government Partnership (OPG) where countries have already made over 300 specific open government commitments, such as the Global Initiative for Fiscal Transparency (GIFT). This has brought together international institutions, governments, and civil society to develop a consensus on global norms for fiscal transparency and participation, just to mention few. What these experiences can be reduced to is that countries will find fewer excuses for failing to meet basic transparency and accountability standards. Good practices have been identified and standards have been set, substantial technical assistance is available to implement reforms, and reforms can be accomplished at little to no financial cost. The incentives to improve are there - all that is typically missing is the political will to act, and this is one of the key areas in need of reform. 2.2 The Future We Want The Rio+20 United Nations Conference on Sustainable Development set out the vision of the Future We Want post-2015 development agenda. 3 The conference s outcome document laid out the broad priorities and processes for determining the post-2015 SDGs. While governance per se was not explicitly identified as one of the future goals, the UN document unsurprisingly acknowledged that...democracy, 3 United Nations, Rio+20 United Nations Conference on Sustainable Development, The Future We Want, A/CONF.216/L.1, Rio de Janeiro, Brazil, 19 June 2012. Final Draft, November 2015 8

good governance and the rule of law, at the national and international levels, as well as an enabling environment, are essential for sustainable development (Ibid, article 10, page 2). The UN conference recommended the setting up of an Open Working Group (OWG) tasked to design the post-2015 SDGs. One of the main outputs of the OWG was the global thematic consultation on governance and the post-2015 framework, co-led by the United Nations High Commission for refugees (UNHCR) and UNDP, which took place from September 2012 to March 2013. 4 The OWG eventually developed a proposal for 17 broad SDGs, reflecting the priorities resulting from the Rio+20 conference. These are discussed in Section 4.12 of this report. 5 At the national level, Albania was an active contributor to the Future We Want process. More than 2,000 people participated in consultations from north to south. Over 5,000 people in Albania followed the post 2015 campaign through social media. More than 60% were women, 62% were people from urban areas, and 38% rural. Young people under 25 were proactive, and they represented 65% of the total. The process offered a unique bottom-up picture of the priorities of people of Albania as an input to the future successor framework for the MDGs. Among the Albanian citizen s top priorities emerging from this process were transparency, accountability and reducing corruption, with particular emphasis on health services. With extensive participation from all sectors of society, the process resulted in the production of a country report outlining the consensus view on development priorities for the country. 6 Of the 16 main development priorities voted through the process, the need for an honest and responsive government ranked fourth highest, and is a main contributing factor to the joint GoA-UN decision to mount the post- 2015 Governance SDG pilot project. 7 2.3 Purpose of the Pilot In mid-2014, the Office of the Prime Minister (OPM) and UNDP entered into a partnership to carry out a pilot project to develop and test governance targets and indicators to feed the post-2015 SDG 4 UNHCR & UNDP, The World We Want: Global Thematic Consultation on Governance and the Post-2015 Development Framework, Report #gov2015, 2013, http://www.worldwewant2015.org/governance. 5 OWG, Introduction to the Proposal of the Open Working group for Sustainable Development Goals, 19 July 2014. These 16 goals were formally accepted and documented in the UN Secretary General s final report of the World We Want process: The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet. Synthesis Report of the Secretary- General on the Post-2015 Agenda, New York, 4 December 2014, page 18. 6 UN Albania, the Future We Want Country Report Second Phase of Post-2015 Development Agenda Consultations: Transparency, Awareness and Responsiveness Voices from Albania, Tirana, Albania, 21 July 2014. It is significant to note that more than 2,000 people participated in consultations from north to south. Over 5,000 people in Albania followed the post 2015 campaign through social media. More than 60% were women, 62% were people from urban areas, and 38% rural. 7 The top three development priorities voted by participants were: better healthcare, a good education, and better job opportunities. Ibid, p. 8. Final Draft, November 2015 9

framework. 8 This work is to be carried out in three phases. The first phase of the pilot (June December, 2014) focused on the selection / identification of a set of Albania-based governance indicators/ subindicators that will be subject to special monitoring and reporting for both national purposes as well as to inform the post-2015 agenda. The process was completed through a second phase (July-September 2015) in which the set of the indicators was revised and the Government agreed on an amended set of governance indicators to be considered in the pilot. This was done during the same process as the finalization of the NSDI 2015-2020. A validation assessment was also performed during this phase to confirm the sources of data, the owner of the data (i.e. institution or organization responsible for producing the data), the current systems used to produce the data, and for those indicators that may require systems work, a quick assessment of time/resources needed to develop/implement supporting measurement/reporting systems. This report presents the results of the first two phases. The pilot project has national and global dimensions. At the national level, the pilot project provides expertise to integrate good governance performance measures and indicators into the NSDI 2015-2020 as well as increasing capacity for gathering, monitoring and analyzing data for the selected indicators as a baseline for the strategy. At the global level, the project will support the Government of Albania (GoA) to share their experiences to inform the development of the MDG successor framework, or SDGs, for the post-2015 agenda in the area of rule of law, effective and capable institutions. The strategic planning and monitoring processes for the pilot project are the responsibility of the Department for Development, Financing, and Foreign Assistance (DDFFA) at the Prime Minister s Office. A Delivery Unit has been established to coordinate and facilitate with line ministries, and central and local agencies the achievement of the six national priorities. The DDFFA is the government authority accountable for execution of this pilot project. The UNDP has functioned as the project manager for the pilot project. An international consultant was engaged to carry out the bulk of the analysis and to prepare this report and a local consultant was engaged to follow up with the amendment and validation of the indicators. Key government and development stakeholders were consulted during the course of the preparation of the report and selection of the set of indicators. Numerous documents were provided by the government and other organizations, and extensive literature searches were undertaken on the topics of governance, governance indicators and related topics. 2.4 Organization of this Report Section 1 a very brief summary of this report. Section 2 presents a brief introduction to and context for the pilot project. Section 3 contains a description of the method and approach. 8 The reader is referred to the basic proposal for the pilot project which is contained in the UNDP/Albania document Sustainable Development Goal (SDG) Pilot: Showing Progress towards Innovative and Good Governance in Albania, July, 2014. Final Draft, November 2015 10

Section 4 presents the results of the analysis of the various governance indicator sources, and the selection of a range of governance indicators that could be used for the pilot project. A master list of some 70 potential governance indicators is developed. Section 5: drawing from the master list, a smaller set of indicators is proposed. This is done to spur discussion and brainstorming among the government, UNDP and other stakeholders as to which indicators should be finally selected. Section 6 contains a short description of the next steps for the pilot project. 3.0 METHOD AND APPROACH The following logic, method and approach to the identification and selection of a set of governance indicators for this pilot project have been applied. 3.1 Scope of Governance The identification and selection of governance indicators to support the post-2015 SDG governance pilot is not an uncomplicated matter. One main reason for this is that the scope and definition of the term governance has evolved considerably over the years. The term traditionally focused on government performance primarily in the areas of accountability, transparency, participation and predictability. The concept can now take on just about any aspect of national performance in all sectors (state, private and civil society). The first step therefore was to determine, in broad terms, the scope of governance itself, in the Albanian context. The NSDI 2015-2020, which is discussed in following sections of this report, lays the main ground for the scope of good governance, democracy and the rule of law without actually defining the term per se. Rather, good governance is understood by the government to be defined by goals, priorities and expected outcomes across all sectors, including cross-sectoral areas. Also, and for the purposes of this pilot project, the scope of governance performance focuses primarily on the underlying principles and operational dimensions of accountability, transparency, participation and predictability. These are the main cross-cutting dimensions of governance throughout the NSDI and sector strategies. These dimensions cover anti-corruption issues as well as the efficient and effective functioning of government (service delivery) in the priority areas. At some point, it would be useful for the Government of Albania to explicitly define what it means by the term good governance, and to include that definition in the NSDI. To help in this process, Annex 1 attached hereto extracts a number of conventional definitions of the concept which may be seen to apply to Albania. 3.2 Goal 16 of the Sustainable Development Goals The SDGs framework is set to offer opportunities for countries to strengthen national country systems Final Draft, November 2015 11

and statistical capacities so that data collected at the national and sub-national level may be more efficiently translated into reliable and relevant data for global monitoring. This may be particularly relevant for SDG goal 16 on promoting peaceful and inclusive societies, providing access to justice for all and building effective, accountable and inclusive institutions, i due to possible political sensitivities and the need to ensure national sovereignty whilst achieving sufficient buy-in and national ownership. Goal 16 has a central place in the 2030 Agenda because it will ensure the principles of accountability, participation, and transparency, underpin implementation and localisation of the SDGs in all countries around the world. The inclusion of the goal in the wider SDGs framework reflects the growing acceptance that issues related to peace, security, voice and accountable governance are critical drivers of development progress and have a direct bearing on the achievement of all the other SDGs. In turn, the wider push towards achieving a more peaceful, just and inclusive world will not be successful unless the specific targets of Goal 16 are met to address crucial areas of peace, access to information and justice, open and effective institutions and decision-making, and fighting corruption and illicit flows, amongst others. GOAL 16 Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Related Global targets for SDG 16: 16.1: Significantly reduce all forms of violence and related death rates everywhere 16.2: End abuse, exploitation, trafficking and all forms of violence against and torture of children 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all 16.4: By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime 16.5: Substantially reduce corruption and bribery in all their forms 16.6: Develop effective, accountable and transparent institutions at all levels 16.7: Ensure responsive, inclusive, participatory and representative decision-making at all levels 16.8: Broaden and strengthen the participation of developing countries in the institutions of global governance 16.9: By 2030, provide legal identity for all, including birth registration 16.10: Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements Means of implementation 16.a Strengthen relevant national institutions, including through international cooperation, for building capacity at all levels, in particular in developing countries, to prevent violence and combat terrorism and crime 16.b Promote and enforce non-discriminatory laws and policies for sustainable development Facts and figures Final Draft, November 2015 12

Among the institutions most affected by corruption are the judiciary and police Corruption, bribery, theft and tax evasion cost some US $1.26 trillion for developing countries per year; this amount of money could be used to lift those who are living on less than $1.25 a day above $1.25 for at least six years The rule of law and development have a significant interrelation and are mutually reinforcing, making it essential for sustainable development at the national and international level 3.3 Criteria for Selecting Governance Indicators Having more or less determined the scope of governance, the second major step was to determine the criteria for selecting specific governance indicators to be covered by the pilot project. 9 The number of governance indicators, as implied from the broad scope of governance, is indeed potentially very large. So, some constraints needed to be set. It was decided that the indicators selected needed to: fit within the government framework, that is, be reflected in the NSDI and/or sector strategies; fit in with the United Nations post-2015 SDG framework; exhibit a certain degree of balance in terms of some that would be selected from global or world-wide sources, and those that would be sourced from national sources; be objectively verifiable; have supporting systems for measuring and reporting that are in place; be simple and implementable, often referred to as SMART ; constitute a small number of targets and supporting indicators to ensure manageability within resource and time constraints; and have the potential for disaggregation, where complex or composite indicators are considered. Annex 2, attached hereto, contains a detailed description of the selection criteria. 3.4 Identification and Analysis of Sources for Governance Indicators The third step involved the identification and analysis of the main sources from which governance indicators, according to the criteria, could be identified and selected for consideration in the pilot. This analysis relies primarily on national sources for the identification and selection of governance targets and indicators to be used in the Albania post-2015 governance SDG pilot. A second group of indicators, and those that are more commonly understood and globally accepted, originate from world-wide sources such as Transparency International (TI) where a common definition can be applied to both the country as well as to support world-wide comparisons. A third group of indicators might be those that 9 An indicator can be defined as a parameter, or a value derived from parameters, which points to, provides information about, describes the state of a phenomenon/environment/area, with a significance extending beyond that directly associated with a parameter value. (OECD, 2003) Final Draft, November 2015 13

are defined by the government in cooperation with other countries in a region that can serve both internal governance performance measurement needs as well as support regional comparisons. The following main sources were identified and analysed. Applying the selection criteria discussed earlier, specific governance indicators were selected for potential pilot application. From each source, potential indicators were then put into a master list of over 70 potential indicators, and it is from this master list that the pilot stakeholders will decide on a smaller and manageable set for inclusion in the pilot project. Primary National Sources 1. NSDI (2014-2020) 2. Public Financial Management Strategy 3. Justice Inter Sector Strategy 4. Public Administration Reform Strategy & Decentralisation Strategy 5. Digital Albania Sector Strategy 6. Public Order Sector Strategy 7. Anti-Corruption Sector Strategy 8. EC Indicative Strategy Paper (aka CSP) 9. EU World Bank Study on West Balkans Sector Indicators 10. Current Albania MDG-9 related targets and indicators 11. Global Partnership for Effective Development Cooperation Secondary / Global Sources 12. Open Working Group on Sustainable Development (OWG) 13. Open Government Partnership (OGP) 14. Global Initiative for Fiscal Transparency (GIFT) 3.5 Selection of Potential Governance Indicators for the Pilot Based on the above analysis, a preliminary number of potential governance indicators were identified and selected. The aim here was to be comprehensive, to ensure that no possibly important target or indicator might be missed. As quite a few potential governance indicators were selected, a master list was developed, from which a smaller set of indicators was subsequently selected for the pilot project. Section 4 of this report describes each of these sources in detail, the analysis, and the various governance indicators that are extracted from them. Finalized list of governance indictors. It is expected that the government in cooperation with the UNDP will decide on which smaller sub-set of indicators will be used, and the decisions may be reflected in an amended version of this report, or in some other specially prepared summary document or proposal. 3.6 Assumptions and Constraints Final Draft, November 2015 14

This analysis and report has not been prepared without its challenges. The first main challenge has been the occupation of the government counterparts on other priorities, and only limited time could be made available on their part to participate. As at the time of writing, the NSDI has not been finalized, and a number of the key sector strategies have either not been released and/or not translated into English. To compensate for this, the analysis has used to the maximum extent possible those sources that have been available, including earlier drafts of the NSDI, as well as working drafts of some of the sector strategies. 4.0 ANALYSIS AND SELECTION OF GOVERNANCE INDICATORS This section of the report presents the main results of the initial identification and selection of governance indicators from primary / national sources, and secondary / global sources. For each source, a brief description is provided, and then a table lists the specific indicators selected from each source. PRIMARY NATIONAL SOURCES. 4.1 National Strategy for Development and Integration (2015-2020) The first version of the NSDI (2014-2020) was released in draft form in June, 2013, the same month of the Albanian national elections which resulted in the formation of a new government and a new government program, based on the six national development priorities noted in Section 3 of this report. The Office of the Prime Minister was also re-organized, and with the new government s strategic priorities, the draft NSDI needed to be amended. In October, 2014 the DDFFA released an amended Chapter 5 of the draft NSDI, which was further elaborated and revised in summer 2015. The NSDI draft is still undergoing final revision. A new draft version of the NSDI 2015-2020 has been prepared in July 2015 and the release of a fully amended NSDI 2015-2020 is planned by end September 2015. It will then undergo public consultations with the aim of formalization and final approval by the government s Strategic Planning Committee in late fall 2015 (November or December 2015). As the window for the post 2015 SDG pilot project is tight, it was decided to identify and select potential governance indicators from the most recent version of the NSDI 2015-2020 on the assumption that the details with respect to sector and cross-sector objectives, outcomes and performance indicators will remain pretty much intact during the process of consultation, finalisation and approval. The sector and cross-cutting priorities and objectives in the draft NSDI are indeed comprehensive. The overarching goal of the NSDI is EU integration and EU membership of Albania. Good governance, democracy and rule of law form the foundation upon which the NSDII vision will be achieved. Strong and effective government institutions are Albania s foundation for competitiveness and growth and for EU membership. The NSDI vision and main goals is supported by the Foundations and four pillars. Foundation Good governance, democracy and rule of law (justice, public order, public administration, etc.) Final Draft, November 2015 15

Pillar 1 Growth through macroeconomic and fiscal stability (Fiscal system and monetary policies & public finance) Pillar 2 Growth through increased competitiveness (property rights, promotion of business and direct foreign investments, ICT, etc). Pillar 3 Investing in people and social cohesion. (social programs, health, education, etc.) Pillar 4 Growth through the sustainable use of resources. (infrastructure, transport, environment, etc) Each pillar is comprised of a number of inter-related sectors and cross-cutting sectors of the Government. For each of these pillars the Government has established a set of individual targets by which performance will be measured. The NSDI 2015-2020 incorporates the principles of results-based management and the use of SMART indicators (i.e. specific, measurable, attainable, relevant and timebound). The NSDI foundations (Good governance, democracy and rule of law) and its first two pillars (Growth through macroeconomic and fiscal stability, & Growth through increased competitiveness) are the primary areas of governance. It is from these areas that most of the governance indicators for the pilot are selected; and to a lesser extent from the last two areas in terms of service delivery (and the governance of delivery, such as health care), and government effectiveness. Many of the indicators that are identified in the NSDI are drawn from the individual sector strategies. The draft NSDI contains numerous governance goals, results, targets and indicators, and only those deemed suitable for the pilot project are selected. Double-counting of indicators in the NSDI and in the sector strategies is avoided where possible. The matrix of proposed governance indicators reflects the selected indicators from the results matrices agreed by the government and used to monitor the NSDI 2015-2020. The selected indicators are presented in Table 1 (paraphrased from the wording in the NSDI). The indicators are also combined in the master List in Annex 5 attached hereto. Table 2. Proposed governance indicators sourced from the NSDI (2015-2020) Proposed Target / Indicator Data Source Baseline Target Year Value 2020 FROM NSDI Foundations: Good Governance, Democracy and the Rule of Law 1.1 Judiciary performance index (Number of finished cases in proportion to the number of registered cases in total for trial in the courts of first instance and appeal) (%) MoJ 2013 37.9% 20-25% Final Draft, November 2015 16