Equalization Transfers in Romania: Current System and Proposals for Reform
AbstractRomania has been actively reforming its intergovernmental transfer system during the last years. The new Law on Local Public Finance, which will come into force in January 2007, will involve substantial modifications both to the institutional arrangements and to the formula employed to distribute equalization funds across counties and communes. As with the former transfer mechanism, the new system is characterized by a high level of complexity and an emphasis on within-county equalization of communes instead of a more desirable nationwide approach. Overall, we argue that the equalization potential of the reformed 2007 system does not improve in any significant way over its predecessor. This report outlines the principles that should shape an efficient equalization transfer system and provides five proposals for reform based the concept of fiscal disparity and a bifurcated distribution scheme. The proposals represent feasible alternatives to improve the equalization potential of the system in place, as shown by the simulation analysis on each of the alternative transfer systems. The paper concludes offering a critical path to reform the Romanian transfer system.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0701.
Length: 93 pages
Date of creation: 01 Jan 2007
Date of revision:
Contact details of provider:
Web page: http://aysps.gsu.edu/isp/index.html
Romania; Equalization Transfers; reform;
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robin Boadway, 2003. "The Theory and Practice of Equalization," Working Papers 1016, Queen's University, Department of Economics.
- Richard Bird & Andrey Tarasov, 2002.
"Closing the Gap: Fiscal Imbalaces and Intergovernmental Transfers in Developed Federations,"
International Center for Public Policy Working Paper Series, at AYSPS, GSU
paper0202, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- Richard M Bird & Andrey V Tarasov, 2004. "Closing the gap: fiscal imbalances and intergovernmental transfers in developed federations," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 22(1), pages 77-102, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Benson).
If references are entirely missing, you can add them using this form.