Moldova became a sovereign state in 1991 and an s an independent republic in 1994. The Constitution of 1994 provides for a single-chamber Parliament consisting of 101 members, a President elected by the Parliament. The members of Parliament are elected every four years on the basis of proportional representation, with a threshold of 6% of the popular vote. The government is formed by the Prime Minister, the Deputy Prime Minister and the ministers. The Prime Minister and the government are nominated by the President after consultation with the parliamentary majority. The nomination of the government requires the approval of Parliament. Constitutional amendments passed in 2000 increased the powers of Parliament, by enabling it to elect the President (previously, the President was elected by popular vote) and reducing the powers of the executive branch.

During the transition period, the Republic of Moldova implemented three administrative-territorial reforms:

• In 1994 changes to the soviet system of administrative organization were made, but with no essential changes of territorial structures. The first autonomous territorial unit (Gagauzia) was created; it included three districts (dolay) which are still part of the internal division of the Gagauzian region. The Soviet model in the remaining administrative territorial units had been maintained largely unaltered. By 1998 the country's territory was divided into 38 raioane (districts), including five in the breakaway Transnistrian region.
• The Law on Territorial-Administrative Organization, 30 December 1998: The 30 districts on the right bank of the Nistru river were amalgamated into 9 judeţe (counties), to which later a tenth county was added. The territorial reorganization in 1999 was accompanied by a significant administrative reform, resulting in a new division of competences and resources, following the Romanian model. With the aim of conformity with European standards and subsequent to the adoption of the European Charter of Local Self-Administration, Moldova returned to the pre-communist model of administrative-territorial structure. The hope was that larger counties (equivalent to NUTS III) would be able to better cope with developmental and service provision issues as compared to smaller districts (equivalent to NUTS IV). The minimal population size of communes was increased to 2,500 inhabitants. The new law adopted on 30 December 1998 changed the territorial-administrative structure of the country and the number of units – from forty second level units to ten administrative units, thereby increasing the economic capacity and autonomy of local governments. The new law stipulated the delimitation of competencies of public authorities at different levels. An important aspect of the law was the decrease of the number of villages from 925 to 644, again, thereby increasing the financial capacity of first-level units of local government. Another important stipulation was the creation of the institution of prefect, the representative of the central government in a given territory tasked with facilitating the implementation of the administrative decentralization reform. The prefect was endowed with the power to manage the county's public services without interfering with the activities of local authorities. The prefect was endowed with powers of supervising only the legality, rather than the time-frame of the adopted acts.
• In December 2001, the newly-elected Communist government carried out another round of administrative-territorial reforms, which took effect after the local elections in 2003. The reform actually restored a quasi-Soviet model of territorial division of authority, while local autonomy was significantly reduced (The Law on Local Public Administration adopted on 18.03.2003).

The Alliance for European Integration III became the ruling coalition in Moldova in July 2015 after a vote of no confidence in the previous government and the Prime Minister. The current Prime Minister is Pavel Filip.

General Division of Powers

The main laws and decrees regulating the distribution of powers and the budget processes of the various administrative levels are:

• The Constitution
• Law on the Budgetary System and the Budgetary Process of 1996 (henceforth called the Budget Code)
• Law on Local Public Finance of 2003
• Law on Public Administration of 2006

According to the Constitution (Art. 109) of the Republic of Moldova, public administration at the level of administrative/territorial units is based on the principles of local autonomy, decentralization of public services, and consultation with local citizens on matters of local interest.

According to the Law no. 436 of 28 December 2006 on Local Public Administration, local government operates at two levels: the first level consists of public bodies with general or special powers created and functioning on the territory of a village or town/municipality with the purpose of promoting the interests of the local community and addressing local issues. The second level consists of public bodies with general or special powers created and functioning on the territory of rayons (districts), the Chisinau municipality and the special legal-status autonomous territorial units with the purpose of promoting the interests and resolving the problems of the population of the given territorial administrative unit.

Second level of administration: Each rayon (district) elects a council which co-ordinates the activities of the local councils in order to provide public services at a district or municipal level. The councils are elected on the basis of universal, equal and direct suffrage by secret ballot for a term of four years. The Head of the rayon is elected by the local council.

First level of administration: Mayors of towns (municipalities), villages (communes) and councillors in town (municipal) and village (commune) councils are elected via universal, equal, direct, secret and freely expressed vote, for a four-year term.
The delimitation of the competences among the first and second level authorities is unclear, contradictory, and in some cases even lacking. Some of the activities listed as falling within the sphere of local competences are not clearly defined, and in some cases are assigned to the level immediately above the particular local authority. The confusion and duplication of responsibilities and competences is also characteristic of de-concentrated state authorities.

The Law on Public Administration stipulates that subnational administrative units in Moldova enjoy financial autonomy and have the right to initiative in all matters concerning local administration. However, three key indicators of local autonomy (independence of local budgeting; control over local revenues; authority to determine local expenditures), show that budgetary processes in particular in Moldova are still centralized to a great extent.

1.1. Central level

The national level consists of ministries and the State Chancellery (led by the Prime Minister) and a large number of other agencies. Some agencies have the status of CPA (Central Public Authority) and are not subordinated to any ministry.

The government is comprised of the following ministries:

Ministry of Transports and Road Infrastructure
Ministry of Foreign Affairs and European Integration
Ministry of Internal Affairs
Ministry of Justice
Ministry of Defence
Ministry of Regional Development and Construction
Ministry of Agriculture and Food Industry
Ministry of Environment
Minister of Education
Ministry of Culture
Ministry of Labour, Social Protection and Family
Ministry of Health
Ministry of Informational Tehnologies and Communications
Ministry of Youth and Sport
Ministry of Finance

Public services are delivered by both central and local governments. The central government has authority, inter alia, over defence, law enforcement, transport, telecommunications, infrastructure of national importance, environmental protection and cultural heritage, and other areas of national importance. The central government is also responsible for the provision of higher education and healthcare, as well as for social security benefits (pensions, unemployment and disability). Service delivery is carried out by various state and non-state agencies (some with CPA status, not subordinated to a ministry) as well as by regular branches of ministries.
 
1.2. Regional level

Moldova is also divided into three regions but these are not administrative territorial units. The three regions – North, South and Central – do not represent administrative jurisdictions and they are mostly used in the context of planning, evaluating and implementing regional development policies.

Local level

Moldova is a unitary state with local governments operating at two tiers. There are thirty five territorial units corresponding to the second level of local government authority: thirty two districts (rayons), two municipalities (municipii) -Chisinau and Balti, one autonomous territorial unit (UTA Gagauazia), and one unrecognised territorial unit (Transnistria) which does not consider itself subject to the jurisdiction of Moldova. These thirty five units are divided into 896 first-level territorial units–towns (oraşe) and villages (sate), which have no direct financial relations with the centre. They liaise with their respective second-level units regarding budgeting and other financial issues. In total, there are 931 local authorities in Moldova.

Local governments are responsible for delivering a range of key public services. Local responsibilities are outlined in the Law on Local Public Finance and differ depending on the status and level of local authority. The mandates mainly include territorial development and town planning; providing utility services; construction and maintenance of roads, streets, bridges; providing social services to the population; construction and maintenance of social housing; primary and secondary education (pre-school, primary schools, gymnasiums, secondary schools, lyceums and maintenance of local cultural institutions, libraries and museums and the organization of public cultural activities); maintenance of parks and green spaces, as well as cemeteries; physical education and sports; and public order.

Following are the key types of public functions of the respective authorities:

• Centralized functions (national level)
• decentralized functions/local exclusive competences
• de-concentrated functions
• delegated Functions
  

Local exclusive competences:

According to the Law on Local Public Finance (No. 397-XV of Oct 16, 2003, Art 8, last amended on 1 November 2013); and the Law on Administrative Decentralization (No. 435-XVI of 28 December 2006, Art 4, last amended on 26 April 2012) the first level of the local public administration (mayoralties of towns and villages) has the following responsibilities:

• Fire protection; aspects of military administration
• Construction and maintenance of local public roads, streets, bridges within the local area; local public transport.
• Water management; waste management; public sanitation
• Urban planning; construction and maintenance of water supply and sewage systems; maintenance of parks, green spaces, and cemeteries; social housing construction and maintenance
• Maintenance of libraries, museums, other cultural institutions and carrying out programs in culture, physical culture and sports
• Education - construction, operation, and maintenance of kindergartens.

Responsibilities of the second tier of local public administration (rayons and ATU Gagauzia) include:

• Public order; coordination, organization and supervision of aspects of military administration
• Rayon-wide roads, construction, operation and repairs; rayon-wide local public transport
• Construction of long-distance gas pipelines and other heat and power facilities of local importance
• Coordination and implementation of sports and youth programs; maintenance of theatres and TV stations; provision of grants to the bottom tier ear-marked for personnel expenses in libraries and other cultural institutions other than museums
• Construction, operation, and maintenance of primary schools, gymnasiums, lyceums, after-school and other educational institutions, boarding schools
• Social protection and maintenance of social institutions.
  

Competences shared with the central government

De-concentrated services: The Government Regulation No 735 of 16 June 2003 covers de-concentrated authorities subordinated to particular ministries. The delivery of some de-concentrated services is closely linked to activities of local government bodies. Service delivery is also shared between de-concentrated offices of ministries and the relevant local governments. In these instances local government bodies either:

• Take part in decision making and administration of services delivery (e.g., via the local social assistance fund, ecological agency, state construction inspection and civil status office); or
• Have responsibility for the partial financing of service provision (municipal police).

There is significant overlap in the location and placement of these offices. Each region (rayon) has decentralized offices of at least of eight-ten organizations. Currently, each organization has authority over a particular de-concentrated office. Delegated functions

A substantial part of the implementation of central functions is delegated to local governments (LPAs); for example, the administration and maintenance of schools and hospitals, and the organization of social assistance to low-income groups belong in this category. When performing delegated functions, local government possesses limited autonomy, and operates as an agent of central government.

According to the Law on Administrative Decentralization (No. 435-XVI of 28 December 2006, Art. 6, last amended on 26 April 2012) it is mandatory for the state to ensure that any delegated functions are backed by adequate financial resources.

The legislation of the Republic of Moldova does not clearly stipulate what the key differences are between decentralized services, the de-concentrated and delegated ones. There is a tendency amongst CPAs to consider, in practice, the district decentralized services/institutions as being de-concentrated services/institutions, vis-a-vis which they possess authority. There is also the issue of inadequate provision of funding. As a consequence, the exercise of the relevant functions is difficult and sometimes even impossible for the small ATUs or those that are resource poor. ​