Romania

   

Policy Performance

#36

Economic Policies

#39
Despite some promising trends, Romania falls into the bottom ranks internationally (rank 39) in the area of economic policies. Its score on this measure has improved by 0.3 points relative to 2014.

The strong growth of recent years continued in 2017, driven mainly by private consumption boosted by tax cuts and strong increases in wages and pensions. While private investment has recovered, public investment fell. Long-standing problems such as poor infrastructure, cumbersome business procedures and frequent regulatory changes remain a concern.

Unemployment rates declined to their lowest level in 20 years. Wages have grown substantially, led by an increase in the minimum wage and boosted by a tightening labor market. The share of economic inactivity remains high. Other outstanding issues include high youth-unemployment levels, a growing skills mismatch and a brain drain among the most educated youth.

Numerous tax changes have been implemented, including a decrease in the VAT rate, a decrease in the flat personal-income tax, increases in the income-tax allowance, and a shift in distribution of social contributions from employers to employees. Budget deficits are growing as a result. R&D spending has grown, and the country’s role as an emergent tech hub has driven private and public-sector innovation.

Social Policies

#39
With resources scarce, Romania falls into the bottom ranks internationally (rank 39) with respect to social policies. Its score on this measure is unchanged relative to its 2014 level.

Despite repeated, largely ineffective reform, the country’s education system suffers from inadequate public spending, difficulty in matching graduates with jobs, unequal rural and urban access, and teacher salary disputes. Poverty rates are very high, particularly among Roma. An ambitious anti-poverty package was passed in 2016, while a minimum-income law was postponed in 2017.

The public health-insurance system falls significantly short of universality. Retaining trained medical professionals has proved difficult. While parental-leave benefits are generous, family-policy spending is low overall, and a shortage of affordable child care hampers the work-parenting balance. Women today represent the majority of outward migrants.

Poverty among pensioners is a serious problem. Pensions have been increased, but a second pension pillar has been weakened. While the country has upheld commitments to receive and integrate migrants, these newcomers risk facing discrimination similar to that applied to the Roma community.

Environmental Policies

#20
Despite ongoing difficulties with pollution and waste, Romania falls into the middle ranks internationally (rank 20) with regard to its environmental policies. Its score on this measure has declined by 0.2 points relative to 2014.

Romania continues to struggle with developing and implementing comprehensive environmental regulations. Progress has been made on combating illegal logging and improving waste management policies.

Despite public protest, the government has reintroduced legislation that would allow a controversial mining project to reopen, as well as a law on mining more generally.

The country participated in the Paris climate conference, and has undertaken some measures to uphold its commitments.

Democracy

#38

Quality of Democracy

#38
With continuing tension between the government and civil society, Romania falls into the bottom ranks internationally (rank 38) with regard to democracy quality. Its score on this measure has declined by 0.1 point since 2014.

A controversial amendment to the new party- and campaign-financing regulations was invalidated by the courts. However, parties’ circumvention of the existing law remains the bigger concern. The government has significant influence over the public media, and private media owners often trade good coverage for favors.

Civil rights are generally respected, but preventive detentions and security-service surveillance activities have drawn criticism. Massive street protests continue, but leaders have been subject to a smear campaign by the governing coalition. Government failures to counter discrimination have been exacerbated by a church-backed initiative restricting the definition of marriage.

The government sought to make controversial criminal-code amendments and push through a judicial reform package undermining judicial independence. Corruption remains a serious problem and a key political issue. Legislation weakening anti-corruption laws was withdrawn after a strong public outcry.

Governance

#40

Executive Capacity

#40
With a number of notable weaknesses, Romania falls into the bottom ranks (rank 40) with regard to executive capacity. Its score on this measure has declined by 0.1 point relative to 2014.

Policymaking has suffered from a lack of strategic planning. Repeated reorganization of the Government Office undermined its policy-evaluation capacity. Informal coordination has involved effective control by the PSD party leader, who has removed prime ministers who became too independent. This has undermined formal government coordination measures.

RIAs are required, though quality and actual use are highly uneven. Civil society has often been perceived as an enemy, rather than an ally. Thus, a ministry tasked with public dialogue has been little used. A decentralized communications approach has resulted in frequent contradictions.

The Grindeanu government was able to implement a number of campaign promises. However, the resulting budget strains meant that others had to be abandoned. Ministerial turnover has been high. Political turbulence has stymied efforts to adapt to international developments. The EU-funds absorption rate is comparatively low.

Executive Accountability

#36
With only a few bright spots in this area, Romania falls into the bottom ranks internationally (rank 36) with regard to executive accountability. Its score represents a gain of 0.3 points relative to 2014.

Individual parliamentarians have minimal resources, but fairly broad formal oversight powers. The appointment of a new audit-court president has raised concern regarding its continued independence. The ombudsman has been criticized for ignoring ordinary citizens’ concerns and championing those of politicians.

Despite a wave of citizen activism and protest, the general level of policy knowledge beyond this area remains low. The largest media organizations are highly partisan, though some media brands provide in-depth information.

Political-party decision-making is quite centralized. Business associations and unions play only a minor role in proposing concrete policy measures. Despite a dependence on international financing, a number of NGOs have significant analytical capacities.
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