Public Sector Pay Expenditure: How Much and How?
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Automatically translated summary. The full text is available in Romanian.
Independent Think Tank “Expert-Grup” examines pay spending in Moldova’s public sector, describing a fragmented regulatory framework and the planned single pay system reform. The analysis, produced under a project on the budget process funded by the Soros Foundation Moldova, assesses how much room remains to raise public salaries.
The pay framework is complex and fragmented, which lowers transparency in setting final salaries, increases the discretion of those managing institutional budgets and widens inequity between employees doing the same work. Some groups are favoured: judges’ and prosecutors’ salaries are indexed annually because they track the average economy-wide wage. A single pay system reform aims to standardise remuneration and raise salaries.
Fiscal space is limited. Personnel spending as a share of GDP and of the budget is already close to the EU average, so only a 0.5 percentage point rise in GDP, to 9% of GDP, is anticipated. Moldova pays far fewer employees per 1,000 inhabitants, and its economic capacity is modest. Between 2000 and 2015 average public wages rose substantially, yet institutional quality improved only marginally. The main cause is the excessive politicisation of staff selection and decision-making, not the pay system itself.
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