Financial Autonomy in the Republic of Moldova: The Evolution of Local Budget Revenues
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Automatically translated summary. The full text is available in Romanian.
An analysis of local budget revenues in the Republic of Moldova over 2014-2018 shows that the state budget concentrates over 62% of the country's budget resources and that local authorities depend heavily on transfers from it. The article compares Gagauzia, districts, Chișinău and Bălți, and first- and second-level local authorities.
Over 70% of local budget revenues in 2017-2018 came from state budget transfers, a dependence that has grown since the 2013 local public finance reform. Gagauzia benefits from a more advantageous system: its total revenue per capita reached MDL 5,497.4 in 2018, and it has outpaced Chișinău since 2017. Districts performed worst, with average revenues at 98.3% of their 2014 level in real terms.
Own-source revenues account for about 10.9% of consolidated local budget revenues and contributed only 2.3 p.p. to the 20.5% growth in 2016-2018. The share of revenues over which local authorities have full decision-making power fell from 42% to 39.3%, as earmarked transfers exceeded 50% of revenues in all groups of second-level units. Apart from Chișinău, second-level authorities act more like deconcentrated services of central government than genuine local authorities.
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