The major challenge of local governments in the eight countries under review (Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, and Ukraine) over the past twenty years has been adjusting to the narrowing role and size of government, and the resulting reduction in local resources, while attempting to maintain the high quality of social services provided at the local level during the Soviet period.
During the last years, positive trends have been seen in some countries in the field of decentralization. In Armenia, the list of local taxes and duties was enlarged in 2010. In Ukraine, the concept of Local Government Reform was recently approved, and a new framework for local self-government legislation is currently being developed. In 2010, Belarus adopted a law on Local Government and Self-government.
However, in other countries, centralization tendencies are being observed: a reduced level of tax autonomy in Russia, Kyrgyzstan, and Georgia; a nomination of local self-government heads by the central government in Kyrgyzstan; the reorganization of local governments in Georgia; as well as limitations to expenditure autonomy of local governments in Russia.
The recent financial crisis has revealed weaknesses within the local finance system of some of the Eurasian countries, while in other countries local budgets seem to be doing better than central/regional ones due to their reliance on the most stable revenues sources.