The place of local and regional self-government in eastern partnership policy-making and delivery

The report explores the challenges and opportunities which the new generation of AAs/DCFTAs present for economic, political and institutional developments at the sub-national level in the six Eastern Partnership countries - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The report presents an analysis of (1) the costs and benefits for regional and local authorities of the countries which are signatories to the AA/DCFTA as well as of the particularities of the EU's relationship with the countries participating in the Eastern Partnership; (2) impediments for economic development; (3) the political situation and decisions and their impact on the LRA's economic development. The main conclusion is that though successful implementation of the AA/DCFTAs is likely to deliver medium to long-term benefits for economic developments at central, regional and local levels in participating states, short-term financial and administrative costs are likely to be high and as a result there is a risk that compliance will be severely hampered. Russia continues to have important economic leverage over EaP states, and has the potential to use sanctions to derail processes of closer integration with the EU. Thus, EaP states risk finding themselves in a situation of being "between two stools" (Korosteleva 2010) - unable to fully benefit from either the Russia- or EU-led mechanisms of economic integration and trade liberalization. The report also discusses the domestic structural and policy impediments to economic reforms, as well as the negative effects of authoritarianism, patrimonial politics, and corruption on governance at national, regional and local levels of authority.