Moldova Public Expenditure Review : Reforming Local Public Finance for More Efficient, Equitable, and Fiscally Sustainable Subnational Spending
This report reviews intergovernmental fiscal relations in Moldova and recommends ways to improve the efficiency and equity of local public finance, while maintaining fiscal sustainability. Local public authorities are responsible for meeting key pu...
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| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19717169/moldova-public-expenditure-review-reforming-local-public-finance-more-efficient-equitable-fiscally-sustainable-subnational-spending http://hdl.handle.net/10986/19306 |
| Summary: | This report reviews intergovernmental
fiscal relations in Moldova and recommends ways to improve
the efficiency and equity of local public finance, while
maintaining fiscal sustainability. Local public authorities
are responsible for meeting key public service delivery
needs. They play a major role in education and bear primary
responsibility for urban and rural functions such as water
supply and local road construction and maintenance. But
local authorities are unable to fulfill this role due to
sub-optimal size, inadequate financial capacity, and low
administrative capacity. The Government of Moldova is
reforming intergovernmental fiscal relations, as part of
broader commitments under the national decentralization
strategy (2012). They set new rates for sharing national
taxes with the two tiers of local government, introduce
formulas for transfers to local governments, and remove
subordination in financial relations between top and bottom
tiers of local government. This report reviews recent
reforms in local public finance and makes suggestions to
further improve subnational expenditures, fiscal policy, and
budgetary processes. Suggestions are made in five key areas:
(i) address the inefficiencies of expenditures related to
the high fragmentation of Moldova's
administrative-territorial organization; (ii) improve the
efficiency and equity of intergovernmental transfer
formulas; (iii) help develop the revenue capacity of local
governments; (iv) improve public investment management at
the local level; and (v) ensure sustainability of
subnational debt. |
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