The objective of this report is to present an analysis of the current situation and problems of the municipal organizational and financial framework in Albania, and the extent to which decentralization of essential local functions to local authorities is aided or impeded by this framework. It also includes a summary of findings and recommendations resulting from this analysis. This paper was published in the Sourcebook on Intergovernmental Fiscal Relations in Eastern Europe produced by the Urban Institute under contract to USAID. The materials of the sourcebook is available in Intergovernmental Fiscal Relations in Eastern Europe Sourcebook either on CD ROM ROM (please contact: bwalter@usaid.gov) or at http://www.urban.org/centers/iac/localgov/index.html