Capital Management and Budgeting Processes in Albania

Abstract

This chapter investigates, analyzes, and compares capital management and budgeting processes in Albania and the implications for road and highway infrastructure investment. It is a case study of Albania's capital management and budgeting processes seen through the framework of the Srithongrung, Yusuf, and Kriz normative model. The analysis and insights derived suggest a mixed picture of the contribution that the current capital management and budgeting processes make on the country's capital investment and its economic growth and development. Albania's capital management and budgeting processes are not consistent with the normative framework as follows: (1) the fragmentation and political involvement in capital improvement planning (CIP), (2) forecasting bias and fragmentation in the forecasting process resulting in misalignment and lack of prioritizing new capital investments, (3) shortcomings in the capital financing strategies stemming from court decisions and weak budgetary controls, (4) centralized execution and project management in monitoring highways maintenance.