Previous articles in this series:
Why Local Elections Are More Important Than They Seem;
A Region Doesn’t Start Over After Every Reform;
Local Self-Government Without an Independent Economy;
The Path: From the Logic of a Colony to the Logic of Development.
First, the region becomes poorer. Then it loses people. Then business shrinks. Then the budget weakens. Then services deteriorate.
And then the entire local government system begins to adapt to this state of affairs as if it were the norm. No one expects a breakthrough anymore. No one seriously talks about a new economic role. The main task becomes simpler and sadder: to hang on.
Repair the school roof. Find money for the road. Push through the water supply project. Secure a transfer payment. Apply for a grant. Negotiate with the district, the autonomous region, the ministry, or a donor. Plug the hole. Get through the year. Then the next one.
Thus, the mayor gradually transforms from a leader of development into a deficit manager.
Formally, he remains the head of the local government. He has a mandate, an official seal, an office, council meetings, meetings with citizens, reports, plans, and strategies. But in essence, his daily work increasingly consists not of building the territory’s future, but of preventing it from falling apart today.
This is not a matter of the personal qualities of any particular mayor. Moldova has many strong, energetic, and determined local leaders who do more than their resources allow.
The problem lies in the system. If the entire structure of local government is designed in such a way that there is little revenue, many obligations, a shortage of specialists, complex projects, and development depends on external support, then even the most active mayor begins to live in a constant state of firefighting. Moreover, this is not a heroic struggle, but a routine one.
This is the institutional trap of a depressed region: it begins to reproduce not development, but its own deficit.
Financial Dysfunction
To understand why this situation is so persistent, one need only look at the numbers. According to a comparative analysis of local budgets in Southeast European countries for 2024, the share of own-source revenues in Moldova’s local budget structure is only 7%, compared to an average of about 30%. Montenegro—60%, Austria—47%, Romania—24%. Moldova—7%.
This is not merely a matter of lagging behind. It is a fundamentally different model of budgetary relations, in which local authorities do not generate revenue—they receive it. They do not build a revenue base—they distribute what comes from above or from outside.
Only 47 of the country’s 892 municipalities are able to cover their administrative expenses from their own revenues. The remaining 94.7% depend on central government transfers even for basic operations—that is, simply to keep the administrative apparatus running.
Small municipalities spend, on average, about 30% of their budget on administrative expenses. And 80.5% of them lack project management specialists. This means that most of the country’s municipalities are overwhelmed by the task of sustaining themselves—and at the same time lack the basic professional competencies that would allow them to turn external funding into sustainable results.
It’s like asking someone to build a house by giving them a hammer without a handle and instructions in three languages, only one of which they know—and that’s the one full of swear words.
This state of stagnation is becoming not a temporary condition, but a persistent administrative model. Local authorities are getting used to living from one external resource to the next. Not because they particularly like it, but because the system simply won’t function otherwise.
Under this logic, the most important skill is not creating a new economic base, but the ability to secure aid. A good mayor in this model is someone who knows how to secure a transfer payment, negotiate a project, find a grant, persuade a donor, and get into a program. This is important work—sometimes vitally necessary. But it is not the same as development.
Development is when a region gradually becomes capable of sustaining itself without relying solely on external support—when jobs, businesses, processing industries, a tax base, services, and local investment projects emerge. When local authorities don’t just ask for money, but build an economic strategy around themselves. In the Moldovan reality, it often doesn’t get that far.
He who pays the piper calls the tune… loyalty
A transfer is not just money. It is a relationship with the authorities. The one who distributes the transfer shapes the behavior of the one who receives it.
If the entire system is structured so that the main resource comes from above, then the mayor’s primary task is to interact effectively with those who control that resource. You need to be on good terms with the ministry. You need to get into the program. You have to demonstrate your need more convincingly than the neighboring municipality.
This isn’t corruption or incompetence. It’s rational behavior within an irrational system.
A grant isn’t just money, either. It means incorporating the region into someone else’s agenda. The donor funds what it considers important: water supply, roads, energy efficiency, digitalization, and youth initiatives.
Sometimes this aligns with the region’s actual priorities. Sometimes it doesn’t. But the mayor is forced to adapt to the donor’s logic rather than develop his own investment strategy. Because no such strategy exists—there are neither the resources nor the tools to implement it. There is only a window of opportunity: when a donor arrives, an application must be submitted.
This is how the grant-based economy of local government takes shape. The mayor becomes not an architect of development, but a specialist in managing other people’s resources. His success is not measured by whether employment has grown, new businesses have emerged, or the tax base has improved. His success is measured by how many projects he has completed, how much money he has brought in, and how many facilities he has opened with ribbon-cutting ceremonies.
If local authorities constantly live in anticipation of external resources, the very logic of governance changes. A budget shortfall ceases to be an emergency. It becomes the normal language of communication with the central government.
The local government no longer says: “We have a development plan, and we need resources to implement it.” Instead, it says: “We’re short on money again; help us plug the hole.” And the central government, a donor, or a higher-level budget responds not to strategy, but to need.
This creates a system in which success goes not to those who have built a new economic function, but to those who have more convincingly demonstrated their lack of resources.
This is a very dangerous logic. It fosters not development, but dependence. Not agency, but supplication. Not strategy, but a report on a state of distress. Thus, a region’s stagnation becomes institutionalized. It exists not only in the economy but also in governance—in documents, budgets, applications, transfers, habits, citizens’ expectations, and the behavior of the authorities.
A Model of Stagnation
People get used to asking the mayor for help. The mayor gets used to asking the central government for help. The central government gets used to distributing funds. Donors get used to funding projects.
All participants in the system are busy. Everyone is working. Everyone is doing something. But the region isn’t necessarily developing. This is the most insidious form of stagnation: when there is activity but no development.
At the same time, the mayor’s responsibility remains enormous. A citizen does not go to a ministry to ask why there is no road in the village. He goes to the mayor. For the average person, the mayor is the closest representative of the state.
As a result, the local leader finds himself under double pressure. From below—people who need services, roads, water, electricity, schools, and jobs. From above—the system, with its resource constraints, complex rules, competitive bidding processes, and high standards.
As a result, the mayor becomes a mediator between people’s needs and budgetary constraints. Frustration over this mismatch is directed at the local level: the mayor is incompetent, the council is weak, and the council members do nothing.
Sometimes this is fair. But often the problem runs deeper: the system is structured in such a way that it promises more than it is capable of delivering.
Moldova knows this model all too well. We love projects. We love programs. We love strategies. We love roundtables. We love the phrases “sustainable development,” “European practices,” “local autonomy,” and “capacity building.”
But if, after all these words, the mayor is still left alone to deal with a leaky roof, a depopulating village, and a budget that’s barely enough to cover the administration’s own operating costs, then we haven’t built a system for development. We have built a system of managed scarcity.
That is precisely why administrative reform alone does not solve the problem. We can consolidate mayoral offices. We can reduce their number. We can redraw the map.
But if the new structure continues to operate within the logic of transfers, grants, and external support, the mayor will simply remain a manager of deficits—only across a larger territory.
The scale will change. The logic will remain.
Case Study: Comrat: The Mayor Caught Between Status and Deficit
Comrat illustrates this problem particularly clearly. It is neither a small mayor’s office nor a forgotten village. It is a municipality, the administrative center of Gagauzia—a city with a university, status, political clout, and aspirations to serve as a regional center. But even here, the logic of scarcity is very clear.
The Comrat municipal administration receives transfers from the central budget of the Autonomous Territorial Unit (ATO) of Gagauzia in the amount of 719,4 thousand lei.
For a household, this is a lot of money. For the city, it is an amount comparable to the cost of a single small infrastructure project. With that money, you can patch something up, cover part of the current needs, or resolve a single local issue.
But it is impossible to revive the region’s economy. It is impossible to develop a strategy. It is impossible to create the conditions for a KSU graduate to stay in the city rather than leave.
And that is the whole point. The figure of 719,4 thousand lei is not just the amount of a specific payment. It reflects the scale of the relationship. It represents the resources the system allocates to the administrative center of the autonomous region to work on its development. It is a signal of the logic behind local government.
Comrat needs more than just money for individual projects. It needs the ability to formulate an investment strategy: where to create jobs, how to link the university to the economy, how to develop processing industries, how to utilize the agricultural base, how to turn a road into a channel for transporting products rather than people, and how to make the city a center for services and logistics for the south.
But if local authorities are constantly focused on securing resources for day-to-day needs, there is almost no time or institutional energy left for such a strategy.
The mayor of Comrat operates under conditions that are all too familiar to mayors throughout Moldova: there is a responsibility to the population, but not enough tools to fulfill it.
Tax policy is determined by the central government. Major investment decisions are made outside the region. Government programs are formulated in ministries. The party hierarchy determines who receives priority funding. The mayor is left face-to-face with the population—and with whatever resources are available.
Comrat has advantages that many other regions lack. Its political status, which in principle provides leverage for negotiations with the central government. A university that could become the core of a knowledge-based economy or a technology partner for local businesses. An agricultural base that, with processing facilities, could form the foundation of a regional food brand. Garment factories with international orders.
But none of these assets is operating at full capacity—in part because local authorities are forced to operate within a logic of scarcity rather than a logic of development.
The university is not connected to the city’s labor market because no one is systematically addressing this link. The agricultural base is not being transformed into processing capacity because there are neither investment instruments nor specialists. Political status is used primarily for symbolic conflicts with the central government, rather than for negotiations on an economic package.
One can talk as much as one likes about the development of Comrat as a regional center. But if the administrative system forces the mayor to deal with roofs, roads, applications, and approvals every day, the city ends up with administrative survival rather than strategic management.
For the mayor of Comrat to function as a leader of development—rather than as a deficit manager—he needs different tools.
Land policy over which he has real control. The right to establish and promote investment sites. A clear share of new tax revenues, which makes the region’s economic development beneficial for the local budget. Access to investment funds without having to go through central ministries every time. A connection to the vocational education system—so that local specialization determines who local educational institutions train. Competencies within the mayor’s office itself—specialists who know how to develop strategies, manage projects, and negotiate with investors.
Without this, everything will just go round in circles.
The real question is not how many city halls there should be. The real question is what their economic and administrative functions should be.
Should city hall be merely a place for providing services and handling complaints? Or should it become a hub for the region—bringing together the economy, employment, investment, services, education, logistics, and the local tax base?
If we want the latter, it needs more than just money. It needs authority, staff, a project team, a stable revenue base, and the ability to plan not just for a single fiscal year, but at least ten years ahead.
The mayor as a deficit manager—this is not an accusation against the mayor. It is a diagnosis of the system. The system is structured in such a way that local authorities are forced to prove their need every day instead of demonstrating their capacity for development. It rewards not strategy, but the ability to secure aid. Not economic results, but a properly filed application. Not a new tax base, but a completed project.
And until this logic changes, depressed regions will remain depressed even with renovations, grants, strategies, and new administrative boundaries.
Because a region does not develop when it receives occasional assistance. A region develops when it ceases to be structured as a request.
Evgeny Perestoronin, journalist, economic and political analyst
Dmitry Tereburke, economist, expert in real estate and regional development
