The Albania NHDR 2002 is a significant contribution to the on-going of the transition process in Albania. It is also the first attempt at calculating the Human Development Index, a goes a step further with the calculation of sub-national HDIs. This methodological innovation helps identify important socio-economic trends at the national and regional levels, and improve the analysis of the past decade of transition to a market economy. The report focuses on the difficulties facing local governments in managing local development in the public interest. It also analyses the lessons learnt from past unsuccessful attempts at integrating regional development initiatives to in a national development framework. The Report concludes with some strategic proposals to address the development imbalances that have risen among regions over the past decade.