Strengthening the Public Administration Management in Albania, Needs Reforms to Counter Growth Slowdown

Albania transitioned away from an extremely closed, autarchic socialist system only in 1992. At that time, Albania's administrative system was considered chaotic and ineffective. Its administrative culture - a combination of many influences - emphasized security over service delivery. The capacity of public administration was weak; the system, stemming from a party focused environment, was highly politicized. Corruption was pervasive in every facet of the public sector. Citizens feared public administration and did not trust it to provide even the most basic services in a fair or impartial way. Until recently, Albania coped with the unfavorable external economic environment quite well. The economy avoided a sharp fall in output, inflation stayed low and stable, and the banking system remained sound. Albania's main external links are through exports, banks, and remittances, mainly with its two next door neighbors—Italy and Greece. Despite the problems in Europe, spillovers to Albania through these channels have been limited so far. There are several reasons for this. Albania’s exports are a small part of the economy. And, since the onset of the crisis, the country has been able to reorient and redirect some of its exports towards new products and markets.