Abstract
Armenia has witnessed an impressive amount of local governance reforms, which have established larger, more functional and better financed municipalities. Yet, despite the successes established so far, further reform efforts will be needed. In addition to strengthening the financial capacities of municipalities, it will be vital to ensure that they are also capable of delivering direct services to the citizens. In order to do so, further reforms are needed, which focus on functional and fiscal decentralization. Furthermore, a proper decentralization strategic framework for the next phase of the local governance reform process should be developed by the Ministry of Territorial Administration and Infrastructure (MTAI) in consultation with the municipalities and other stakeholders.