Moldova’s Territorial-Administrative Reform Must Be Linked to a Broad Fiscal Decentralisation Reform: Statistical and Econometric Calculations

According to the 2024 Census, over a third of Moldova’s municipalities have fewer than 1,000 inhabitants, and about half have between 1,000 and 3,000. In 2025, taxes and duties made up on average only 23% of local revenues, and just 20% in the smallest municipalities. Population size correlates positively with the local tax base, but weakly and unstably. The regression estimates a minimum functionality threshold of about 1,000 inhabitants, below which municipalities are structurally unviable and dependent on transfers. The Government’s 3,000 threshold therefore leaves a margin of efficiency.

Local taxes per capita raise performance, while state transfers per capita reduce it. The analysis recommends prioritising mergers below the critical threshold while avoiding mechanical amalgamation, deepening fiscal decentralisation, and improving administrative efficiency, including staff costs. The goal should be viable, fiscally autonomous municipalities able to drive local development.