Moldovan Local Governments' Efficiency: Importance and Key Factors

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Publishing date: Thursday, 21 April 2011
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The goal of this study is to estimate the technical efficiency of each local government from the Republic of Moldova, to identify efficiency determinants, as well as its role for local development. The econometric simulations denote the fact that current policy of transfers negatively contributes to the technical efficiency of local governments, due to the moral hazards it creates and the limited discretion related to the allocation of financial resources at the local level. It reveals the acute necessity for systemic reforms related to the organization and functioning of local administrations. These actions should aim at enhancing the transfers’ system, strengthening the local financial autonomy and solving the problem of excessive fragmentation of the territorial-administrative structure. All these measures could significantly improve the efficiency of local governments which have an important impact on local development.

Full version available only in Romanian.

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