A 2015 agreement between Kosovo and Serbia sketched out a role for an Association of Serb-majority Municipalities that would have transformative implications for the future of Serb communities in Kosovo and the country’s governance more broadly. Yet progress on establishing this arrangement has stalled due to political disagreements between the two countries and between Kosovo’s predominantly Albanian government and leaders of its Serb minority. The debate revolves around a vital but contentious tool for managing issues of ethnic diversity in many parts of the world: decentralization of political authority.

Establishing workable minority-majority relations and generating attachment to political institutions among all citizens are central preconditions for democratic stability, especially in post-conflict states where violent clashes have been based around ethnic identity. In many countries emerging from conflict, including most of those in the Western Balkans, accommodating and integrating ethnic minorities remains a major challenge on the road to democracy and European Union accession. The challenge has been even more acute in Kosovo, the independence of which is not universally accepted and even actively opposed by neighboring Serbia.

As originally conceived in an EU-brokered dialogue, the Association was intended to represent the collective interests of those local government areas in Kosovo with an ethnic Serb majority. Serbs in Kosovo expect the arrangement to provide institutional autonomy for their communities and a durable link to Serbia, but among ethnic Albanians there is widespread fear that it will become a de facto “statelet” inside Kosovo. This position was strengthened by a ruling of Kosovo’s Constitutional Court that found many parts of the agreement violated the country’s multi-ethnic and unitary character.

Under UN administration in the 2000s, and in the constitutional arrangements that accompanied independence in 2008, Kosovo developed a multi-layered and interlocking regime promoting and protecting its minority communities, including through legally secured equal citizenship and language rights, guaranteed enhanced political representation, and the entrenchment of parliamentary double-majorities—of all representatives, and of all minority representatives—for any major decisions that affect them.

Decentralization has been perhaps the most profound, and most divisive, means of ensuring a place for minority communities in the young country’s governance arrangements. This process not only involved the asymmetric redistribution of political, administrative, and fiscal power concentrated in central government towards municipalities, but also the creation of entirely new municipalities with ethnic Serb majorities. In this way, Kosovo endeavored to meet the expectations of Serb citizens for autonomy without compromising the principle of equal citizenship or state integrity.

For more than two decades, decentralization of authority has been a central tenet of international support for good governance around the world. In part, this recognizes the vital role for local government in producing an effective state that can perform its core functions and build constructive state-society relations. But it is of particular relevance in fragile and post-conflict contexts, where decentralization of power can empower minority groups with a degree of autonomy. In countries as diverse as Iraq and Uganda, where ethnic and territorial inequities have contributed to violent conflict, decentralized local governance has been a key aspect of building peace and sharing power.

Recent research indicates that decentralization can deepen democracy without compromising service delivery or state authority over people and territory, transforming politics from a top-down to bottom-up approach, and the state from a brittle command structure to one based on overlapping authority and complex complementarity. More responsive and accountable local governments, and local governments which look like the populations they represent (including women, the poorest, etc.), are not only more likely to attract and retain the consent and cooperation of populations, but also more likely to produce public goods that match the needs of local people. For these reasons, in both Syria and Ukraine, decentralization has been proposed or is now being used as a tool for protecting and articulating minority interests.

Kosovo’s own experience with decentralization has been mixed. Most Serb citizens continue to reject Kosovo’s sovereignty and look to Serbia for protection. The EU-facilitated Kosovo-Serbia dialogue was meant to normalize relations not only between those two countries, but between the Kosovan state and its ethnic Serb citizens. Negotiations around the Association have been complicated not only by distrust between Pristina and Belgrade, but also by the fierce resistance of ethnic Albanian opposition parties that fear the arrangement will make Kosovo ungovernable. Despite the importance both to Kosovo’s Serb communities and as a milestone on the path toward peace between Kosovo and Serbia, there has been no political progress on the Association’s establishment.

Last month, PAX and the European Centre for Minority Issues Kosovo launched a full package of practical recommendations to attempt to break the deadlock. Our report charts a path toward a breakthrough compromise that will be acceptable to all key stakeholders. Based on research in Serb communities and with respect for the functionality of Kosovo as a unitary and multi-ethnic state, the report’s advocacy is based on sound principles of inter-municipal cooperation already entrenched in Kosovan law. It maps out a series of practical arrangements that maximize potential for coordination in a wide variety of domains, from local democracy to urban and rural planning.

In addition, we argue that the Association could be complemented by “joint public institutions” to collaboratively exercise certain competences of the municipalities in areas of Serbian language education, culture, and healthcare. It would be integrated into existing mechanisms for community representation at a central level, uphold the principle of multi-ethnicity, and maintain financial and symbolic links with Serbia through the participating municipalities and in accordance with existing legislation.

The report also lays out a process by which agreement on the Association’s setup might be achieved, with a focus on strengthening measures for democratic debate and ensuring stronger citizen and civil society input than has been allowed by the closed-door negotiation process in Brussels thus far. At a  launch event for the report in Pristina last month, Kosovo Deputy Prime Minister Branimir Stojanović described the Association as a means of fostering coexistence, saying: “It is not our intention to create an isolated community that does not communicate or cooperate.”

Development of this new body may provide a model for decentralization elsewhere that promotes meaningful coexistence without undermining the ability of the state to govern. If the relevant stakeholders get the institutional setup right, the Association could embody the best of decentralization policies. It could serve the collective interests of Serb citizens while engaging them actively in Kosovo’s governance, in a way that strengthens political and state legitimacy.

Michael James Warren is Programme Manager, Kosovo, at PAX. Adrian Zeqiri is Executive Director, European Centre for Minority Issues Kosovo.