The different mechanisms employed by the EU to transmit consociational practices to countries undergoing democratization can be better understood through a comparison of local decentralization reforms in Albania and Macedonia. In a mostly unified society such as Albania, the involvement of the EU in such sectorial reforms proved minor. Instead, other specialized regional organizations like the Council of Europe (CoE) and the Organization for Security and Cooperation in Europe (OSCE) stepped in to assist the Albanian government with the technicalities of reform. By contrast, local decentralization reform represented the core of the Ohrid Agreement and was one of the most important consociational practices designed to maintain social cohesion in Macedonia; yet despite the radical decentralization reform implemented in accordance with the Ohrid Agreement, the country still lags far behind Albania in that sector. Between 1992 and 2002, these countries' local government systems became remarkably similar, but they have since progressed at different rates.

A historical analysis of the reform process reveals that some of the problems relating to fiscal decentralization continue to linger both in Macedonia and Albania. This chapter shows that, while Albania follows a typical Eastern European path toward local decentralization, Macedonian decentralization reform involves more complex dynamics; policy choices and implementation in Macedonia reflect the peculiar social context, that is, the seemingly impossible task of decentralizing local government while consolidating a unitary nation state out of a society deeply divided along ethnic lines.