02050cas a2200241 a 4500 AALejournalIMF014887 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498313414 1018-5941 BD-DhAAL BD-DhAAL Cevik, Serhan. Fragmentation and Vertical Fiscal Imbalances Lessons from Moldova / Serhan Cevik. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (20 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using a novel municipality-level panel dataset, this paper investigates the empirical characteristics of vertical fiscal imbalances (VFIs) in Moldova over the period 2005-13. The results show that the extent of variation in VFIs across 898 municipalities can be explained by the level of per capita income, fiscal capacity, and demographic characteristics, as well as the central government's fiscal behavior that reflects fiscal constraints and policy preferences at the national level. Political affiliation does not appear to be a significant factor, and the results are inconclusive in terms of direction. While some model specifications show larger VFIs when the mayor of a municipality belongs to the same party ruling the central government, other models suggest better coordination and thus lower VFIs. Altogether, these findings underscore the need for well-coordinated reforms to create economies of scale, enhance revenue collection, and improve the composition of spending at the subnational level. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2014/233 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/233/001.2014.issue-233-en.xml IMF e-Library