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Dismantling a weak state: The crisis as a pretext for even more neoliberalism in the Romanian economic policies

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  • Cărămidariu, Dan

Abstract

The paper presents the evolution of Romanian economic policies shortly before and during the financial and economic crisis. It starts by pointing out key data on the Romanian economy in 2008 and focuses on the different action plans the Romanian governement has drawn and put into practice in 2009 and 2010. The paper analysizes especially the general cut-off of wages in the public sector, the raise of taxes (2010) and their influence on consumers' demand and the evolution of Romanian GDP in 2010 and 2011. At the same time, it focuses on the evolution of governement investments in 2010 and 2011, the tool officially proclaimed as Romania's magical key for getting out of the recession. The paper shows that although such a raise in public investments was a dominant element in the governement's economic discourse, in fact public investments decreased in 2011. Based on the fact that the austerity measures, combined with the raise of public investments, were - according to mainstream economists - the best possible policy mix for fighting the crisis, the paper comes to the conclusion that this policy mix has more negative than positive effects for the unreformed Romanian economy, as long as a true raise of public investments cannot be revealed. It shows that the crisis was used as a pretext for implementing Neoliberal principles in Romanian economic thought and policy as well, for pushing forward the dismantling process of the Romanian state.

Suggested Citation

  • Cărămidariu, Dan, 2012. "Dismantling a weak state: The crisis as a pretext for even more neoliberalism in the Romanian economic policies," MPRA Paper 40349, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:40349
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    File URL: https://mpra.ub.uni-muenchen.de/40349/1/MPRA_paper_40349.pdf
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    References listed on IDEAS

    as
    1. Molnar, Maria, 2011. "Income Polarization In Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 64-83, June.
    2. Maria Ana Lugo, 2005. "Comparing Multidimensional Indices of Inequality: methods and application," Working Papers 14, ECINEQ, Society for the Study of Economic Inequality.
    3. Voinea, Liviu & Mihaescu, Flaviu, 2009. "The Impact of the Flat Tax Reform on Inequality - the case of Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 19-41, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    response to crisis; neoliberalism; fiscal policy;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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