Challenges of decentralization policy in Kosovo Decentralization is a policy and a program designed to reform government as well as governance, which leads to new institutions of government and shifts of vertical power sharing with its proponents and opponents. 12 Economic underdevelopment of newly created municipalities; low level of investments and high rate of unemployment; limited budget; lack of infrastructure; lack of qualified human capacities; intense politization of public administrative capacitates; never-ending political demands by the Serbian community; insu cient development of political culture; institutionalization of the existing ethnic divide…are directly influencing the decentralization process. Law on Local Self-Government guarantees broad local competencies to the municipalities. European standard-wise, this law fulfills all the elements that make a municipality not only self-sustainable but also provides them with the necessary administrative and financial means to broaden the prospects of good governance; local economic development and more security for the communities, especially those considered marginalized. Findings on the ground For the sake of attaining thorough perspective on the benefits and challenges that decentralization process has yielded throughout these years, we have provided the stakeholders(local government o cials and local citizens) with a questionnaire. Below you may have a look as to how and what these social groups think in regards to the overall decentralization process. The newly created municipality 16% 23% 61% God decision Bad decision I do not know Figure 1. The Kosovar with Albanian and Serbian ethnic background perspective on the process of decentralization. 12 Wolf Linder, Political Challenges of Decentralisation, University of Bern, 2004. http://www.unifr.ch/federalismnetwork/assets/files/Resources%20ALUMNI%20 Website/Wolf%20Linder%20Decentralisation%20challenges.pdf