EU accession will affect four broad areas of local governance and public administration:

The need to develop local administrative capacity is becoming more acute as central administrations shed more functions. There is a need to improve local staff’s managerial competence and its awareness of European integration–related issues, as well as to streamline local government organization itself.

The importance of developing staff qualifications and capacities of local government—in order to take advantage of the few tools available to influence the EU policy process—has often been underestimated at the local level. Improving the central government’s administrative capacity should go hand in hand with upgrading local structures and organizational systems. It should not be forgotten that in many areas the European Commission has the exclusive authority to initiate policies affecting local authorities. If local authorities wish to influence draft legislation that ultimately will affect them, they must focus on the activity of the Commission. Reform efforts should also aim at developing stable and workable financial and legal frameworks governing local-central relations, as well as creating institutionalized consultation mechanisms. Crucial components of intergovernmental relations are the clear division of labor between central government and self-governments, separation of county and municipal property from state property, and definition of the relations between local stategovernments and local self-governments.

Attention should also be paid to developing local-local relations among municipalities. Policy coordination and joint planning mechanisms are especially important if local governments want to create regions on a "problem" basis in order to attract EU funds. Developing strong partnership ties with local NGOs and citizen groups should also be a top priority in order to guarantee smooth communication and understanding among local institutions and their constituents. Contracting out practices at the local level have to be fostered in order to make local public service delivery more effective and efficient.

The main preconditions for effective assistance are adequate absorption capacities, a proactive attitude on the part of beneficiaries, flexibility of programs, and well-designed packages of measures. In order to cover institutional gaps, various institution-building measures have to be applied in Central and Eastern Europe, including support for developing staffing strategies and functional reviews, reassigning certain functions.

To help candidate countries cope with the challenges of the accession process, donors should support policy institutes that develop second opinions on EU positions. They should also provide assistance for building institutions that can support strategic planning and policy analysis. Donor involvement is beneficial at the central level to help assess the impact of draft legislation, particularly its effect on economic sectors and vulnerable groups in society.