IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/5927.html
   My bibliography  Save this paper

The challenges to long run fiscal sustainability in Romania

Author

Listed:
  • Canagarajah, Sudharshan
  • Brownbridge, Martin
  • Paliu, Anca
  • Dumitru, Ionut

Abstract

Romania, along with many other countries in the European Union, faces daunting fiscal challenges. Fiscal balances deteriorated sharply following the global economic crisis, forcing Romania to implement a fiscal consolidation that was one of the largest in the European Union, but which may not be sustainable without a recovery of economic growth. Although the ratio of public debt to gross domestic product is still relatively modest, at around 35 percent, long-term fiscal solvency is threatened by the costs of funding the public pension system in the face of adverse demographic shifts over the next 50 years. Because of widespread tax evasion, the tax system in Romania is one of the least efficient in the European Union. Tax reforms that can reduce the amount of tax lost to evasion and fraud could make a major contribution to enhancing fiscal sustainability.

Suggested Citation

  • Canagarajah, Sudharshan & Brownbridge, Martin & Paliu, Anca & Dumitru, Ionut, 2012. "The challenges to long run fiscal sustainability in Romania," Policy Research Working Paper Series 5927, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5927
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/01/03/000158349_20120103111719/Rendered/PDF/WPS5927.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Díaz Alvarado, Carlos & Izquierdo, Alejandro & Panizza, Ugo, 2004. "Fiscal Sustainability in Emerging Market Countries with an Application to Ecuador," IDB Publications (Working Papers) 1536, Inter-American Development Bank.
    2. Ingrid-Mihaela DRAGOTĂ & Emilian MIRICESCU, 2010. "The Public Pension System of Romania between Crisis and Reforms. The Case of Special Pensions System," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 9(9(550)), pages 97-116, September.
    3. Reckon, 2009. "Study to quantify and analyse the VAT gap in the EU-25 Member States," Taxation Studies 0029, Directorate General Taxation and Customs Union, European Commission.
    4. Luca Barbone, 2011. "The Battle Over Private Pensions," CASE Network E-briefs 05, CASE-Center for Social and Economic Research.
    5. European Commission, 2009. "Taxes in Europe Database," Taxes in Europe Database 0001, Directorate General Taxation and Customs Union, European Commission, revised Jun 2020.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mişa Ionuț & Kagitci Meral, 2019. "An overview of the influence of some macroeconomic variables on public revenues. A panel approach for a sample of European countries," Management & Marketing, Sciendo, vol. 14(2), pages 249-265, June.
    2. Ionel Bostan & Carmen Toderașcu & Anca Florentina Gavriluţă (Vatamanu), 2018. "Challenges and Vulnerabilities on Public Finance Sustainability. A Romanian Case Study," JRFM, MDPI, vol. 11(3), pages 1-24, September.
    3. Mura Petru-Ovidiu, 2015. "Public Finance Sustainability In Romania. Recent Developments," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 757-769, July.
    4. Herteliu, Claudiu & Jianu, Ionel & Dragan, Irina Maria & Apostu, Simona & Luchian, Iuliana, 2021. "Testing Benford’s Laws (non)conformity within disclosed companies’ financial statements among hospitality industry in Romania," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 582(C).
    5. María del Carmen Ramos-Herrera & María A. Prats, 2020. "Fiscal Sustainability in the European Countries: A Panel ARDL Approach and a Dynamic Panel Threshold Model," Sustainability, MDPI, vol. 12(20), pages 1-14, October.
    6. World Bank, 2013. "Reviving Romania's Growth and Convergence Challenges and Opportunities : A Country Economic Memorandum," World Bank Publications - Reports 16036, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. European Commission, 2012. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2012 Report," Taxation Papers 34, Directorate General Taxation and Customs Union, European Commission.
    2. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
    3. María Lorena Marí Del Cristo & Marta Gómez-Puig, 2013. "Fiscal dynamics in a dollarized, oil-exporting country: Ecuador," Working Papers 13-06, Asociación Española de Economía y Finanzas Internacionales.
    4. Campo Robledo, Jacobo, 2011. "Sostenibilidad fiscal: una aproximación con datos panel para 8 países Latinoaméricanos [Fiscal sustainability: A data panel approach for eight Latin American countries]," MPRA Paper 33091, University Library of Munich, Germany.
    5. Egidijus Bikas & Greta Bagdonaitė, 2020. "Tax avoidance: the aspect of value added tax," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(2), pages 590-605, December.
    6. Markus Eller & Jarmila Urvová, 2012. "How Sustainable Are Public Debt Levels in Emerging Europe?," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 48-79.
    7. Amakoe D. Alognon & Antonios M. Koumpias & Jorge Martínez-Vázquez, 2021. "The Impact of Plastic Money Use on VAT Compliance: Evidence from EU Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 239(4), pages 5-26, November.
    8. Alexis CRUZ-RODRÍGUEZ, 2014. "Assessing fiscal sustainability in some selected countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(6(595)), pages 7-22, June.
    9. Feige, Edgar L., 2015. "Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the “Shadow Economy”?," MPRA Paper 68466, University Library of Munich, Germany.
    10. Silva, Alexandre Manoel Angelo & Cândido Júnior, José Oswaldo, 2010. "É o mercado míope em relação á política fiscal brasileira?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(4), December.
    11. Michael Keen, 2013. "The Anatomy of the Vat," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(2), pages 423-446, June.
    12. Lukáš Moravec & Jana Hinke & Monika Borsiczká, 2021. "Fiscal Effect of VAT Control Statement - Case Study of the Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 69(3), pages 365-377.
    13. Hana Zídková, 2014. "Discussion of methods estimating the VAT gap [Diskuse metod odhadů mezery DPH]," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2014(4), pages 3-15.
    14. Anna Kowal & Grzegorz Przekota, 2021. "VAT Efficiency—A Discussion on the VAT System in the European Union," Sustainability, MDPI, vol. 13(9), pages 1-16, April.
    15. Ionela BUTU & Petre BREZEANU & Adriana PORUMBOIU & Sorina Emanuela ȘTEFONI, 2021. "The Relationship Between Vat Gap And Economic Or Institutional Variables," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 30(2), pages 250-259, December.
    16. International Monetary Fund, 2010. "Former Yugoslav Republic of Macedonia: Selected Issues for the 2009 Article IV Consultation," IMF Staff Country Reports 2010/020, International Monetary Fund.
    17. Gindra KasnauskienÄ— & Jolita KrimisieraitÄ—, 2015. "Using Mimic Models To Examine Determinants Of Vat Gap In Lithuania," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 6(1).
    18. Netherlands Bureau for Economic Policy Analysis, 2015. "Study on the economic effects of the current VAT rules for passenger transport," Taxation Studies 0055, Directorate General Taxation and Customs Union, European Commission.
    19. Luca Barbone & Richard Bird & Jaime Vázquez Caro, 2012. "The Costs of VAT: A Review of the Literature," CASE Network Reports 0106, CASE-Center for Social and Economic Research.
    20. Paolo Di Lorenzo, 2014. "Insights on Tax Evasion Using a Monetary Circuit Model," Metroeconomica, Wiley Blackwell, vol. 65(1), pages 36-57, February.

    More about this item

    Keywords

    Debt Markets; Public Sector Expenditure Policy; Emerging Markets; Public Sector Economics; Fiscal Adjustment;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5927. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.