„The administrative-territorial structure of the Republic of Moldova remains one of the most fragmented in Europe. With a population of less than 3 million people, we have 898 town halls, 32 districts and an autonomous territorial unit. Although the minimum threshold allowed by law for the formation of an administrative-territorial unit is 1500 inhabitants, and at least one third of the administrative-territorial units no longer meet this criterion. At the same time, 9 out of 10 administrative-territorial units have a population of less than 5,000 inhabitants. All these aspects has been analysed in a lot of studies and policy documents and discussed on various platforms in the last 10 years, but without any results. Under these conditions, a reform of the local public administration is inevitable, the only question that remains is: When, how and under which conditions?...”
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Waves of local public administration reforms and the current context

During the 30 years of independence, the Moldovan authorities have managed to gather lessons learned in the field of local public administration reform. The reform from 1998 was relatively ambitious one by reducing the number of second level of local public authorities from 40 districts to 10 counties, to which was added an autonomous region (ATU Gagauzia), Chisinau municipality and localities on the left bank of the Dniester. At the same time, the first level of local public authorities were reduced from 912 to 662 (including the localities on the left bank of the Dniester).

Although it was an important step in the reform of local public administration, the importance of communication, service delivery, financial autonomy, patrimonial management and other issues were not taken into account, leading to massive dissatisfaction among the population and consequently imposed a "Counter-Reformation" in 2001. The reform from 2001 meant, in principle, a major return to the old model, with an even greater centralization, but also creating an additional dose of scepticism among the population for a possible subsequent reform.

As a result, in 2003, the Republic of Moldova returned to the Soviet system of administrative division into districts. Today, the country is divided de jure into 32 districts, 13 municipalities, ATU Gagauzia and the Administrative-Territorial Units from the Left Bank of the Nistru river.

Resources of the first level of administration vs. resources of districts

Although several steps have been taken to financial decentralization and strengthening the financial autonomy of the first level of local public authorities, there is still a major shortage of financial resources to ensure genuine local development. Half of the local budget is allocated to staff costs, to which is added about 30-40% for services and other current expenses, remaining less than 10% for capital investments.

In addition to financial issues, there are those related to human resources. If to refer to the number of tasks that a town hall has today, they should not have less than 20 employees. In reality, today about 300 town halls have less than 4 employees, others about 500 have from 4 to 7 employees and less than 100 town halls have more than 7 employees.

The situation is exactly the opposite at the district level, where the number of competencies has been reduced over the years, another part of the competencies they hold is doubled with the competencies of the central public authorities or town halls, but without undergoing major staff changes. The number of staff in the district authorities is about the same as the staff of the town halls taken together. This proves that the current number, role and structure of the districts is redundant and needs immediate reform.

Providing public services at local level

The lack of human and financial resources also affects the quality of the services provided, not to mention the qualitative realization of all the attributions that are in the competence of the local authorities. Today, only half of the country's population has access to the public water supply system, including the inhabitants of Chisinau, Balti and Cahul. At the same time, only a quarter of the country's population has access to a centralized sewerage system. If we talk about the rural area, then the access to a centralized sewerage system is less than 5%. The situation is no better in terms of waste collection, transportation and storage services, where coverage with rural sanitation services is below 10%.

When we analyze all these challenges together, starting from the level of fragmentation of the administrative-territorial units, demography, migration and last but not least the economic gap between Chisinau and the rest of the local public authorities, the need for a real local public administration reform is imminent, with participation of the relevant stakeholders, central public authorities, representatives of local public authorities, civil society and development partners. It must ensure sustainable local development, increased efficiency in the administration of local public finances, but also access to quality public services for citizens at the local level.

Which model can be successful in the Republic of Moldova?

Globally and in the region, we can see several types of LPA reform, whether mandatory, voluntary or mixed. The question we could ask ourselves is which amalgamation model should the Republic of Moldova choose, so that it is as widely accepted, is sustainable, but also does not repeat the experience of 20 years ago?

The easiest and fastest way to achieve this reform is the mandatory one, where after establishing a set of criteria and an accepted model, it is approved by law and is mandatory for all local public authorities in a certain period of time. As easy and quick as this form of amalgamation can be, it can be perceived negatively as "top down".

The second way would be the voluntary amalgamation, here being left to the local public authorities the decision to amalgamate or not based on certain criteria. This model can be perceived much more positively, as being "bottom up". However, it will take much longer time and is highly dependent on additional incentives for local public authorities to motivate them to merge. Compared to Ukraine where this model was applied, where voluntary amalgamation was encouraged with two types of incentives, namely new competences and additional financial resources, in Moldova only financial incentives remain valid, the share of competences was more or less already decentralized.

The third model would be the mixed amalgamation model, where voluntary amalgamation is applied over a certain period of time, after which it is mandatory. This is one of the most widespread models that have been successful, both in terms of sustainability and acceptance by all relevant stakeholders.

Although there are different experiences and models of amalgamation, the Republic of Moldova cannot and should not make a "copy-paste" to any particular model but must ensure that it chooses its own mechanism adapted to local conditions and needs. The chosen model must be accepted by the majority of the population and offer development prospects with quality services for citizens.

Building on lessons learned in order to have a successful reform, one of the most important things to do is to ensure effective communication. Communication between the Parliament, the Government, local public authorities, the Congress of Local Authorities of Moldova, the private sector, academia and civil society is especially important. In this way it will be possible to identify the most appropriate criteria for amalgamation and implementation of the reform.

Another important element is the identification of financial resources to provide financial incentives. Development partners can play an important role here, and once they see a clear and sustainable vision of the reform, they will be able to mobilize financial resources to make the reform as efficient as possible.

At the same time, it is extremely important to highlight that the objective of the reform is not to save financial resources, but to increase efficiency. And any resources saved in this reform process should be used exclusively for the development of localities.

The way forward ...

After countless studies, analyses, policy documents, migration, clear data on the role of districts authorities vs. the role of town halls, it is obvious that this reform can no longer suffer delays. And if it is done according to best practices, any amalgamation model could be successful in the Republic of Moldova. However, the model with the highest chances of success could be the mixed model of mandatory and voluntary amalgamation.

Therefore, once a broad consensus is identified, the reform can start by establishing a period of voluntary amalgamation for local public authorities at first level, accompanied by a substantial set of incentives, after which mandatory amalgamation is applied.

As for the districts, the mandatory amalgamation must be applied directly, with a very thorough examination of the competencies that will still be required to be achieved by this level. At the same time, the successful application of amalgamation at level I can completely reduce the need to maintain level II, having the option to remain with only one level for local public authorities. Thus, the role of Regional Development Agencies could be greatly increased by taking over the tasks required to be performed at regional level and consolidating decentralized services around them at regional level.

And as for the major concern about reducing jobs for civil servants, or increasing the level of unemployment at the local level, we must keep in mind that the number of staff in the town halls is so small that a possible reform will only make possible to use efficiently most of the human resources available in the current town halls. Additionally, with the amalgamation, it is necessary to examine the opportunity to keep some counters in the authorities that will not have town halls, in order not to remove the services from citizens.

The success of a reform of local public authorities depends on each of us and can only be achieved through close cooperation between central public authorities, local public authorities, civil society, the private sector, academia and last but not least development partners.
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Adrian Ermurachi is the Team Leader of the Good Governance and Rule of Law Program of the Institute for European Policies and Reforms (IPRE). He previously served as Deputy Secretary General of the Government of the Republic of Moldova.
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This commentary is prepared within the project "We and Europe - Analysis of EU-Moldovan relations through innovative media and analytical products", implemented by the Institute for European Policies and Reforms (IPRE), in partnership with IPN, Radio Chisinau, Zugo.md and with the support of Konrad Foundation Adenauer. The opinions presented in this comment belong to the authors.