The public administration needs an effective institutional framework to meet the social, economic and civic needs of the population. Today, the local government in Moldova requires modern management practices to meet the needs of local communities and civil society representatives and to allow citizens to participate in policy development. From the EU perspective, encouraging institutional capacity of local governments has an important role in the integration of the states that have already signed association agreements with the EU or are in the process of pre-accession. Focusing primarily on strengthening the institutional and administrative capacity can ensure a smooth transition towards acquiring membership status. Strengthening institutional and administrative capacity of local authorities is based on structural adjustments, increase in number of jobs, which are also growth factors.