Corruption In Romania An Obstacle Economics Essay

Corruption is a sensation that is available both in developed countries and in the expanding countries, but at different levels and it can be noticed an increased inclination of the poorer countries towards corruption acts than the main one present in the developed countries. Corruption in the general public sector has adverse effects in the efficiency of the general public spending, over the general public sector's performance; it also undermines the assurance in the general public institutions and brings about an unnecessarily increase of the price of the public deals. The higher level of corruption in Romania is the main factor that has a negative impact over the potency of the public activities. The economic implications are related to the low foreign investments and to the gradual development of the private sector, the introduction of the underground current economic climate, the irrational use of the general public financial resources that affect the public sector's performance. In 2011, Romania occupies the previous position on the list of EU analyzed countries in conditions of problem control, at an insignificant distance from Italy, Greece and Bulgaria. Inside the fight against corruption, an elevated attention should get to proactive steps; to the protection procedures of such acts, once dedicated will induce a chain response. It must be kept in mind that problem doesn't have only economic and politics triggers, but it is mainly found in human being aspect. For Romania, in the context of the financial and financial crisis, the only real solution is to combat corruption, namely guarding the general public resources from the potential risks associated to corruption.

Keywords: corruption, open public cash, efficiency, performance

JEL Classification:


Corruption is an internationally spread phenomenon, with which both developed and the ones in producing countries, market and centralized economies are faced with and does not have its roots in today's period.

Since 1983, David J. Gould and Jose A. Amaro Reyes, in a global Bank study "THE CONSEQUENCES of Problem on Administrative Performance. Illustrations from Expanding Countries" found that "corruption has a deleterious, often devastating, effect on administrative performance and monetary and political development [3]. "

Defining this idea and measuring the occurrence still leaves room for many debates, regardless of the attention paid to this happening both by international organizations and by renowned researchers.

U. Myint, in his newspaper "Corruption: Causes, Repercussions And Cures" defines problem as the use of general public function for private gain, or in other words, the use of the official position, rank or status for its own benefit. Following this definition, examples of corrupt habit would include: (a) bribery, (b) extortion, (c) scam, (d) embezzlement, (e) nepotism (f) use of general population property and property consumer for private use, and (g) impact peddling. Some corruption acts such as fraudulence and embezzlement can be undertaken by an individual officer without including any other party. While others, such as bribery, finance extortion and impact peddling involve two celebrations - the corrupted person and the corruptive person. The problem serves that involve two parts derive from various circumstances, such as [7]

- In the case of the public procurement contracts: bribery can impact the honor of the contract, the conditions of the agreement;

- In the case of granting some express benefits: bribery can effect the allocation of the financial benefits, such as credit subsidies, the favorite prices and the exchange rates. The bribe can also be important in obtaining licenses and enables needed to engage in certain strategic financial activities. Additionally, bribe may be used to obtain benefits in kind, such as usage of privileged universities, to subsidized medical care, subsidized housing and to privatization operations;

- In circumstances affecting levies to the state of hawaii budget: bribe may be used to reduce fees, fees, custom taxes owed to the state budget by the private sector celebrities;

- Where it is desired to save time and avoid regulations: bribery can speed up granting of permits and licenses had a need to carry out certain activities, even if these activities are flawlessly legal;

- In cases where it is intended to effect the legal effects of an action: bribery may be used to provide bonuses for the legal regulators in order not to apply sanctions when the private partner is illegal.

The Business of the United Nations, in the paper "Prevention: An Effective Tool to lessen Corruption" identifies the types of corruption in line with the size of the happening, an element which is important to learn when making the anti-corruption actions [6]

Low level corruption, practiced by the public officials that can basically be decent and genuine as individuals, but who are really underpaid and depend on bribery from the public to maintain.

High-level corruption, seen in the situation of some general population officers and politicians who make decisions that entail public procurement agreements or large jobs financed from external funds. This problem is determined by personal greed. Money or property purchased from the corruption serves are usually used in individuals or to certain political people.

Episodic problem, "honest habit is the norm, the problem is the exception and the dishonest public public is disciplined when it is caught".

Systemic corruption is a solid form of problem, which raises chain implications, and the system in question can only just survive through further problem acts.

A research course is designated to figuring out the apparition causes of this happening. Matei A. , Andrei T. , and Rosca I. G. in the paper "The Problem. An Economic and Friendly Analysis " identifies four factors that will be the direct causes of the corruption functions incidence, specifically [1]

Political and legislative factors that relate to the grade of the politics system in general, the product quality and rigor of the legal restrictions, building and arranging establishments with the role of struggling with corruption, the lifestyle of a democratic regime in fact, the decentralization level.

Historical, traditional factors, which usually affects the propagation of the intergenerational happening.

Social and cultural factors.

Economic factors, which make reference to the openness degree of the national market, to the size of the public sector also to the general public sector payroll.


Corruption in the public sector has undesireable effects above the efficiency of the public spending, over the general public sector's performance; it also undermines the self confidence in the public institutions and leads to an unnecessarily increase of the cost of the public deals. Corruption is a scourge that has propagate to all the general public sector activities: in the control activity of collecting and using the public funds, in the activity regarding public acquisitions, in the privatization process and in the whole general population sector area. I believe the advanced of problem in Romania is the key factor which has a negative impact over the potency of the public activities. A series of national priorities, some efficiency and restoration methods, of reforming the machine, are all set in vain, they will all remain in words with no any concrete effect or in the way of measuring the effort involved if there is no conscious for the management of open public assets, if honest efforts will never be manufactured in order to eliminate corruption surrounding the general public sector and between the relations between the public and private industries.

Corruption is normally linked to the express activities and requires serious effects, of communal and economic aspect. It exacerbates poverty, either straight through cutting down the living standard, or indirectly through accentuating income inequality; it can have negative affects over the grade of life. The economic effects are related to the lower foreign investments and the slow-moving development of the private sector, the development of the underground current economic climate, the irrational use of the general public financial resources that affect the public sector's performance.

For these reasons, the dimension of problem and the examination of its repercussions are crucial in today's researches. In recent years, more and more studies aimed at identifying the sources of problem, at estimating the effects of corruption acts over the economical and sociable development of the countries. The need for corruption as one factor that prevents a sustainable economic development, which constitutes as an obstacle to the nationwide competitiveness, in addition has been recognized by international bodies such as the International Monetary Fund, the World Loan provider, the Organization for Assistance and Economical Development which support a series of active methods that combat corruption works. For the same reasons the non-governmental organization, Transparency International, which advocates for transparency of the decisions manufactured in the general public sector, and screens the level of the corruption worldwide and nationally through some indices.

Considerable efforts are being made in order to measure the level of problem, thus in the books several signals for measuring problem are being revealed, each expressing aspects of the happening, being calculated for a few countries and for different intervals.

According to the Corruption Conception Index released by Transparency International, which screens corruption in the general public sector, in 2009 2009 Romania gets 3. 8 highlights of 10 and rates position 71, so Romania is within the last place in the standing of the EU member states, as well as Bulgaria and Greece. This year 2010, Romania ascends 2 steps in the ranking getting on position 69, but in 2011 we can see, according to the index, a worsening of the situation in Romania, ranking 75 out of the 183 countries examined and position 25 among the EU Member Expresses, being used only by Greece and Bulgaria. The entire year 2012 brings for Romania position 66 from the 176 countries analyzed by Transparency International because of this year, this means position 24 among the list of EU countries, followed by Italy, Bulgaria and Greece. The entire year 2012 is the first yr in which Romania records a significant increase of the rating and position. The European union countries that have the ability to keep the level of the corruption under control are: Denmark, Finland, Sweden, Netherland and Luxembourg.

Transparency International Romania considers these results derive from having less strategic coordination regarding the legislative and institutional actions, which resulted in an extreme vulnerability of most pillars of integrity and to damaging the trustworthiness of reforms and of Romania in general. Among the worst damaged pillars was the judiciary system, for which there is absolutely no coherent technique for further reforms. Another pillar that was very seriously affected was the public procurement one and the one that generally uses open public resources, a pillar that possessed the greatest effect on the business environment. Dismantling the safety mechanisms in the area of spending general population resources, under the conditions of the monetary problems and of the increasing indebtedness of the united states, has resulted in a higher reduction of Romania's competitiveness on the Western public money market, funds that can compensate a few of the effects of the financial crisis and which could support the efforts to regulate and fulfill the obligations assumed [9].

According to the Global Corruption Barometer, another index elaborated by Transparency International, Romanian people understand the measures considered against corruption as ineffective. In 2009 2009, 59% of the populace, 8 percent more than in 2008, appreciate that the government's anti-corruption efforts are inadequate, and this year 2010 83% of the population believes this. Politics gatherings and the Parliament still take up the most notable positions one of the organizations that are most influenced by corruption, third place being occupied by justice. The barometer reveals, however, that Romanians have given bribes especially for healthcare services, about 22% from respondents admitting paying a certain amount of bribe in medical system before 12 months. Meanwhile, 13 percent say they may have bribed cops and 6% admit to obtain given bribe in the judiciary system.

Transparency International Romania advises that the government bodies increase the transparency degree in planning and using of the public resources to be able to remove suspicions of politicization of the source distribution criteria and to stop the unnecessary politicization of the general public supervision and of appointing to general public positions based on political customers, which affects the fairness and integrity in consequently exerting the function by those appointed in this way.

World Economic Message board, in the report from 2009 over global competitiveness, projected the level of problem in the analyzed claims with the aid of the "Ethics and problem" indicator included in pillar no. 1 of competitiveness and which can take under consideration trusting in politicians by the populace and the misappropriation of open public funds. Romania ranks 92 in this chapter about corruption, from the 133 analyzed countries, and the area 22 from the European union countries with a rating of 2. 6 [10]. Rank first among the EU countries is Denmark, with the cheapest level of problem according to this technique, and on the previous position is situated Bulgaria, on position 114 of the many countries analyzed in the record.


Chart no. 1: The connection corruption-inefficiency of the general public sector in the European union 27, 2009

Source: The interactiv record of the The Global Competitiveness Record", offered by http://gcr. weforum. org/gcr09/

In chart no. 1 two indicators created by the planet Economic Message board are analyzed and used in building the global competitiveness rating, namely: Ethics and problem, versus the inefficiency of the general public sector. The Ethics and Corruption indicator has been presented above, and the sign that steps the inefficiency of the public sector takes under consideration the following nationwide issues: waste material of public expenditure, the efficiency of the legal platform in settling disputes, transparency of general population decisions. It can be noticed that there is a strong and direct connection between the two indicators, meaning the countries which may have a high problem degree have also shown inefficiency in public administration. Denmark, Finland, Luxembourg, Netherlands, Austria, Germany are situated on the first position in the rank of the European union member claims in conditions of the public sector efficiency and in conditions of the reduced corruption level. On the other hand, with a higher problem level and a low efficiency of the public sector are situated the next: Bulgaria, Italy, Hungary, Romania, and Greece. Romania rates 22 in the problem level, on the list of EU countries, a posture that indicates a high degree of problem, and ranks on the 24th place at the inefficiency of the general public sector. Associated with all the 133 countries examined, Romania rates 92 on corruption and 112 on open public sector inefficiency.

The World Lender, in the paper "Governance Concerns VIII Aggregate and Individual Governance Indications 1996-2008" it's creators being: Daniel Kaufmann, Aart Kraay and Massimo Mastruzzi, includes corruption control one of the analyses indicators of the governance quality, along with: words and responsibility; politics balance and the absence of violence, government effectiveness, the grade of regulations, guideline of legislation [2].

Chart no. : A comparison between corruption control in 2011 at the amount of some EU member states



As you can view from the graph above (chart no. 2), Romania occupies the last position among the list of EU countries examined in 2011 in conditions of problem control, at an insignificant distance from Italy, Greece and Bulgaria. Following analyzing all the 6 indications of the World Loan company that characterizes the governance quality at countrywide level has been witnessed that there surely is a strong relationship between them, and Romania occupies the following positions among the list of analyzed EU countries: the previous place at the control of problem; the previous place at the tone and accountability indicator; penultimate place, before Greece at the political stability and lack of assault, at the sign regulatory quality it is located at a superior position, being followed by Slovenia, Bulgaria, Greece, and the penultimate position, before Bulgaria, at the guideline of legislation.

According to the Western european Commission's publication from Feb 2012, Special Eurobarometer 374 - Corruption Report, problem continues to be one of the biggest challenges facing Europe, it harms the European union as a whole in conditions of reducing degrees of investment, obstructing the reasonable operation of the inner Market and having a poor impact on public finances. The economic costs incurred by corruption in the EU are estimated to amount to around EUR 120 billion per time. [4]"

Although these indices listed above bring an important contribution to the evaluation of the phenomenon, there are critics who claim these indices provide only 1 dimension of the belief on corruption by citizens, by the private sector, being great for comparative analysis between countries but as time passes they don't allow the direct way of measuring of the sensation, considering its components. In this respect there have been developed a series of econometric models that allow a primary, quantitative measurement of the problem. A Romanian guide paper work in the field is "The Corruption. An Economic and Friendly Research " having as authors: Andrew T. , Matthew A. , Rosca I. G, and which presents a number of models that permit the immediate quantification of the global problem, but also on certain areas, and also an estimation of the corruption acts consequences.


Corruption is a broadly seen phenomenon, but from the studies mentioned throughout the newspaper we can notice a higher inclination of the poorer countries towards problem acts than the main one present in the developed countries. Within the fight against problem, an elevated attention should be given to proactive steps; to the protection options of such acts, once committed will cause a chain response. It must also be considered that corruption doesn't have only economic and political triggers, but it is primarily found in human being character. In Romania, the problem prevention actions should be focused on the next areas: increasing the service delivery in the public sector, concentrating on the duty from the general public sector and on the legal form to be able to reintroduce regulations supremacy, promoting transparency in the utilization of the general public resource, creating a reliable anti-corruption system, including at the amount of the Parliament, enforcement firms, the judiciary system and also at the level of the civil modern culture, in particular by strengthening the non-governmental organizations (NGOs) and of the press; extending the role of the performance audit in the public sector [5].

For Romania, in the framework of the financial and financial crisis, the sole solution is to battle corruption, namely protecting the public resources from the potential risks associated to problem. There's a direct hyperlink between problem and poverty, between corruption and the reduced development degree of a country and between problem and the lack of democracy. Increasing transparency in taking care of Romania's resources can be considered a mechanism that would ensure a good response to the existent global challenges. In this framework, the only chance for Romania's development is combating corruption and securing the public resources [8].

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