Decentralisation and local financial autonomy – opportunity for administrative units of the Republic of Moldova

Abstract

In this article is investigated the process of elaboration of local government budgeting in terms of autonomy and fiscal decentralization. The new funding formula of territorial administrative units increase stimulus of administrative units to supplement local incomes and improve their services. Motivation is supported by indicators underlying the calculation of financial balance transfers: fiscal capacity per capita, area and population of that territory - all of these indicators are calculated in relation to national indicators. Keywords: administrative territorial unit, fiscal capacity per capita, general transfers (equalization), special transfers, specific weight, distribution parameter, the fund for financial support.