2014年-世界发展银行全球_Moldova_Public_Expenditure_Review___Reforming_Local_Public_Finance_for_More_Efficient_Equitable_and_Fiscally_Sustainable_Subnational_Spending_88页_1mb

Summary of the Public Expenditure Review for Moldova

Core Content

This report, titled Reforming Local Public Finance for More Efficient, Equitable and Fiscally Sustainable Subnational Spending, is a Public Expenditure Review (PER) conducted by the World Bank for Moldova. It evaluates the country's subnational fiscal framework and provides policy recommendations to improve the efficiency, equity, and fiscal sustainability of local public finance. The report is part of a broader programmatic fiscal effort to support Moldova's National Decentralization Strategy (2012) and aligns with the World Bank Group's (WBG) goals to promote better public spending outcomes.

Main Objectives

The report outlines five key reform areas:

1. Address inefficiencies from Moldova's fragmented administrative-territorial organization.
2. Improve the efficiency and equity of intergovernmental transfer formulas.
3. Enhance the revenue capacity of local governments.
4. Improve public investment management at the local level.
5. Ensure the sustainability of subnational debt.

Key Issues and Findings

1. Administrative-Territorial Organization

• Moldova's current structure is highly fragmented, with 896 bottom-tier municipalities and 35 top-tier jurisdictions.
• This fragmentation leads to inefficiencies in public spending and service delivery, particularly in rural areas.
• Many small municipalities have limited capacity to deliver services effectively, as they spend more on administration than on communal amenities.
• Consolidation and reorganization of local governments could reduce these inefficiencies.

2. Local Government Expenditures

• Subnational expenditures have declined from 10.8% of GDP in 2009 to 8.8% in 2013.
• The per capita expenditures of bottom-tier municipalities are higher in smaller populations, indicating a lack of fiscal equity.
• Local governments are increasingly reliant on central government grants due to declining own-source revenues.

3. Local Government Revenues

• Own-source revenues (taxes, fees, and levies) have been declining as a share of GDP over the past decade.
• Property tax revenue dropped from 0.7% of GDP in 2003 to 0.3% in 2013.
• Local governments face disincentives to raise their own revenues due to the current legal framework and transfer systems.

4. Public Investment Management

• The domestic part of capital investment is not adequately appraised, leading to inefficiencies.
• Local capital spending is mainly funded through central government transfers, which lack transparency and prioritization.
• Weak project implementation and monitoring systems are particularly evident in infrastructure sectors.

5. Subnational Debt

• Subnational debt ratios are low but increasing.
• Total outstanding local government debt was 0.7% of GDP in 2013.

Recent Reforms

• In November 2013, Parliament adopted a package of amendments to the Law on Local Public Finance and the Tax Code.
• These reforms aim to:
  • Reduce political influence over grant allocations.
  • Eliminate disincentives for local governments to raise own revenues.
  • Introduce new revenue-sharing formulas based on population and land area.
  • Allow bottom-tier municipalities to issue municipal bonds and guarantees.
  • Establish a compensation fund for local governments affected by the reforms.

Implications and Recommendations

• The new transfer system may increase subnational expenditures, especially in small municipalities.
• The current grant formula is biased towards smaller municipalities and does not fully capture the differences in revenue capacity and expenditure needs.
• A more gradual and transparent transition is recommended to ensure political acceptability.
• Further legal and institutional changes are needed to enable administrative-territorial reform and improve local service delivery.
• The report suggests exploring alternative formulas that better reflect population size and reduce the bias towards small municipalities.
• Technical improvements to the transfer system, such as incorporating more accurate revenue capacity indicators, are also recommended.

Fiscal Sustainability and Poverty Reduction

• Maintaining fiscal sustainability is crucial in the medium term due to demographic and social challenges.
• The report emphasizes the importance of improving the efficiency of public services, especially in rural areas, to reduce poverty and promote shared prosperity.
• Reforms should support the rationalization of expenditures and public investment, while ensuring that local governments have the capacity to manage resources effectively.

Conclusion

The report concludes that while recent reforms have introduced important improvements in the intergovernmental fiscal framework, further action is needed to address the inefficiencies in the administrative-territorial structure, enhance revenue capacity, and improve public investment and debt sustainability. These reforms are expected to be implemented starting in 2015, with some pilot applications in 2014.