Moldova Unitary state

Reforms

So far there are only declarations and discussions regarding local autonomy and decentralisation in Moldova. Not a single decentralization measure has been approved by the Parliament or entered into force yet.

Since 2009, decentralisation and consolidation of local autonomy are considered governmental priorities for the progress in social affairs, economic development and democratisation of society. A radical and comprehensive reform of local finances is currently awaiting its final approval by the Parliament. De facto reforms were formally launched after the National Decentralisation Strategy went into force on 12 September 2012.

The fiscal decentralisation reform is expected to have a large impact on budgets and financial organization of local and regional authorities. This new reform introduces fixed quotas of shared taxes, separates transfers with special and general destinations, separates transfers to 2nd and 1st tier local governments, and liberalises the fiscal efforts of local governments. At the same time, a heavy issue of financing the newly delegated competencies has surfaced, as the government is trying to cancel funding of a large majority of previously centrally financed competencies.

The draft calls for a change in the division of competences in the area of education, which would be managed in the future by the regional level (2nd tier) instead of the municipalities. The objective of this reform is to introduce important savings into a fairly expensive education system and to ensure equal access to education. However, local governments point out the heavy departing from subsidiarity principle, the centralisation of the competence, and the political dependence of the 2nd tier of local public administration from central government.

Local self-government in Moldova:

Except for the local finance reform which remains to be approved, the central government repeatedly attempts centralization and provides local governments with more competences, but without complementary fiscal decentralisation. Apart from education, centralisation has recently been manifested in the financing of police, in water management, rigorous controls of public procurement, national development funds, and the excessive and quite often abusive controls of local governments’ operations.

KEY REFORMS

• Since 2009: decentralisation and consolidation of local self-government have been high on the government’s agenda as part of its social and economic development and democratisation programme.
• 12 September 2012: the national decentralisation strategy enters into force.
• Development of sectoral decentralisation strategies.
• Controversial delays to reforms
• National decentralisation strategy adopted by law but used as a roadmap
• Tax decentralisation reform halted (adoption ongoing)
• Overhaul of local and regional authority staff and elected representative pay
• Recentralisation of education (power transferred to the regions – second tier of local government)
• Ongoing centralisation of law enforcement, water services, public procurement and development funds