Studying political clientelism in various countries and governance systems enabled the identification of some key features of this phenomenon: mutual advantages for participants; the hierarchical system of subordination and the repetitive nature of the transfer of benefits. The main factors contributing to its development are:

 

- Reduced capacity of the public administration (both centrally and locally) to provide quality services and meet the citizens’ needs;

- The complexity of the public policy-making process and the challenges faced by decision-makers;

- Low credibility of politicians' promises;

- Limited budgetary transparency and low citizen participation in the examination and approval of budgets;

- Deliberate adoption of clientelism as a political strategy of the party;

- Collective acceptance of political clientelism as a solution to local problems.

Clientelism diminishes political pluralism and reduces competition among political parties. Researcher Larry Diamond, having analysed clientelistic parties and hybrid regimes, found that the high level of clientelism leads to electoral hegemony (domination of a particular party), and the victory of opposition parties ‘requires a level of mobilization, unity, skill, and heroism far beyond what would normally be required in a democracy’. 

At the same time, political systems with a high level of clientelism show a tendency to substitute public institutions and some of the exclusive functions of the public authority in reality are presented as a direct success of the ruling party. However politicians and political parties are an ineffective substitute for public institutions that should provide services to citizens. This undermines the idea of the public good, affects the legitimacy of public institutions and facilitates the capture of institutions by small interest groups. Thus, it is not the public authorities that provide services and implement infrastructure projects, but the politicians, who condition the continuation of projects in exchange for electoral support.  

Clientelism also flourishes because of the centralised allocation of national investment funds. The lack of own financial resources, as well as the lack of clear criteria for the distribution of capital investment funds affect the ability of local authorities to implement projects that raise the quality of life. This vulnerability is skilfully exploited by the ruling political elites who, directly or not, condition the provision of financial resources. 

For the Republic of Moldova, the allocation of budgetary resources from the central to the local level based on political criteria is a common practice. No exception to this rule was the approval of the 2021 State Budget. The estimates show that the political affiliation is statistically significant and closely linked to transfers for capital expenditure. Thus, it is predictable that the administrative-territorial units run by people close to the parliamentary majority receive much larger transfers compared to the districts and localities administered by people not affiliated with the government. According to the analysis, clientelism showed up only in capital expenditure transfers. According to the 2021 State Budget Law, the localities whose mayors are representatives of the ruling parties, will benefit from inter-budgetary transfers that are 40.2% higher than the financial resources to be allocated to the cities and villages whose administrations are not affiliated with the government. At the same time, transfers for capital expenditure from the State Budget will be made to 44.1% of localities run by mayors not affiliated with the government (281 out of 637 settlements), while the area of transfer coverage for the cities and villages run by those close to the ruling parties accounts for about 69% (162 out of 235 settlements). The situation is similar in case of transfers to level-two LPAs. Thus, the administrative-territorial units with leaders affiliated with the Government will receive amounts that are three times higher than the transfers provided to the districts with where the leadership is not affiliated with the government. In terms of territorial distribution, about 43% of districts with presidents not affiliated with the government (6 out of 14 districts) are to benefit from transfers for capital expenditure, while in case of administrative-territorial units run by people close to the governing parties – 80% (16 out of 20 administrative-territorial units) will obtain allocations for capital expenditure from the State Budget.

The reason may be the fact that allocation of transfers for capital expenditure is not regulated, while all other types of transfers from the State Budget to local budgets there are clearly regulated. For example, the general purpose transfers for level-two LPAs are determined based on the population number and the size of the territorial unit; the road infrastructure transfers for level-two LPAs are determined based on the road length; and the road infrastructure transfers for level-one LPAs are calculated based on the population number.

It is important to note that the phenomenon of clientelism cannot be eliminated entirely: even if the transfers are calculated solely based on formulas, that does not guarantee a total immunity from political clientelism. The ruling parties can change formulas for calculating inter-budgetary transfers in order to achieve their political goals. For example, if the ruling party is supported by the elderly, then the mechanism for distributing transfers can be modified so that areas with a higher share of the elderly benefit from budgetary allocations. The public policies and the actions of the authorities are the ones that should contribute to the reduction of this phenomenon in the society.  Given the harmfulness of this practice for the development of the country, it is necessary to initiate a dialogue between political actors, both the ruling and opposition parties, in order to support a package of measures to improve the legislative framework and the public finance management. The struggle with clientelism will continue beyond the mandate of one government and this is an additional reason for a dialogue between the political forces. Harmful and flawed practices should not be left-wing or right-wing issues, but should be dealt by all political actors because they affect the economic development and citizens’ quality of life.    

In order to reduce political clientelism and to increase the efficiency of capital expenditure financed by allocating transfers for capital expenditure from the State Budget to local budgets, the following is recommended:

- Make additional efforts for the institutional development and strengthening of the public authorities responsible to ensure the integrity of political competition (e.g. Central Electoral Commission, National Integrity Authority, Court of Accounts, General Prosecutor's Office, National Anticorruption Center, etc.);

- Improve the quality of public services provided by the authorities. When citizens are sure that they have access to quality and fast services, then they no longer need to ask for the involvement of the political factor in order to obtain certain favours, thus contributing to the diminution of political clientelism;

- Increase transparency and participation of citizens, civil society, businesses, academia and other stakeholders in decision-making and preparation of the national public budget; 

- Delegate responsibilities regarding the distribution of public resource allocations to the politically independent institutions or allocate transfers on the basis of specific regulations. The regulations are usually transposed into formulas or mechanisms which provide that the amount of transfers is determined according to objective socio-economic factors, such as the number of students, the length of roads or the income of the population;

- Establish a mechanism for evaluating all investment projects – systematic evaluation will allow a better concentration of the state’s financial effort, facilitate access to new development funds, and increase the chance of financing the projects, which are really needed for the economic recovery of the Republic of Moldova, both at national and local level;

- Based on the evaluation results, develop the universal list of investment projects, i.e. these projects will be a priority for state funding, including through inter-budgetary transfers. These projects can also be supported by issuing municipal bonds or negotiating public-private partnership agreements;

- Build the capacity of both central and local authorities responsible for assessing and analysing the economic benefits of investment projects. Introduce the obligation to apply the ex-ante and ex-post analysis mechanism for public sector investments made out of public funds;

- Increase the transparency of investment projects and publish in detail the proposed projects;

- Clarify the situation regarding the infrastructure projects implemented on the account of donations from economic operators or other stakeholders. In order to ensure monitoring and reduce the number of cases when favours and advantages could be offered to these economic operators, a register should be developed specifying the details and conditions of these donations.

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This publication was developed under the project ”Inform, Empower and Act! Civil Society for Better Budgetary Governance in Moldova”, which is implemented by Expert-Grup Independent Think Tank as the main partner, in consortium with the Konrad Adenauer Foundation (KAS, Germany), Eastern Europe Studies Centre (EESC, Lithuania) and the Institute for European Policies and Reforms (IEPR). The project is co-financed by the European Union and the Konrad Adenauer Foundation. The opinions expressed are those of the authors and do not necessarily represent the views of the European Union and the Konrad Adenauer Foundation.