Reform in the year of economic crisis.

Kurtuhuz, Andreea ; Vasilescu, Ion ; Badea, Ruxandra 等

1. INTRODUCTION

The crisis as an opportunity for reform in the public administration

2. INFORMATION

2.1 Layout

In this brief rapport there are analysed three aspects of the public administrations:

a). Operational costs, especially the wages, but not only, are good to be followed up as possible inefficient areas and be kept under control in the period of full crisis of 2009-2010

b). At the institutional structure level of the county council as well as the subordinated institutions, for identifying the possibilities of strategic reorganisations of the Directorates, Services or Departments that can lead to the improvement of their performance and, again, to cost reductions.

c). Finally, into a medium term perspective, both components must be judged not only by their actual attributions of the local administration, but also by the process of decentralisation. Any reorganisation made in this period of time must admit that the final target is a moving and changing one and the institution of the County Council must be prepared to take very fast new responsibilities.

If these things are done, two master types of benefits will be accomplished. First of all, the reduction of the current expenditures will provide resources for the investment programmes. The best aid for the local economy in a year of crises are the public investment and even if these amounts are not very consistent, they are very important because they come from their own unconditional income that can be used freely on the local plan.

Secondly, a better and rational organisation of the County Council and the subordinated institutions will create more space (physically and more important budgetary) for assuming new attributions, without any problems, when the decentralisation will transfer to them.

In the same time, the global economic crisis has an impact on the local budgets, impact that can be smaller or bigger, depending on the social structure and the local income from a certain administrative or geographical area.

From the experience of other neighbour states and new members of The European Union, some general conclusions will be the same also for Romania.

* The local income will dwindle slowly, but sure. The biggest risk sources for Romania are the tax on global income rate (due to the significant decrease of the employment from an administrative area) and the transfers from their government (especially the transfers from VAT receipts).

* The discrepancy between the incomes from the towns of the same county will be bigger due to the decrease of the economic activities in the poor towns and the loss of individuals' income of the residents.

* It already was felt a decrease of the money sent home from the Romanian emigrants, many of them being on the dole until the end of this year. The individuals' income will decrease for many families, especially for the people from the country.

* As the public income will reduce, the expenditures with welfare will increase. The number of people that will ask for minimum income guaranteed and different types of assistance is growing day by day.

* On the other hand a good part of this crisis is that the cost of goods and services are abating and here are favoured the investment projects from the public founds.

A rapport of Local Government Initiative (LGI) think tank from Budapest, which analysed the market and the financial situation of the municipalities from Hungary, this year and the next two years, will probably be the most favoured from the whole decade for the beneficiary, during a full cycle of a public project: expropriation, projection and execution. This is the best moment to start investment programs.

Finally for this hard period of time, with budget reductions, the main priority must be to protect the essential local public services, sustaining the local authorities' effort to provide them. The quality and the level of local public services must be maintained and the reforms must improve them and provide a better economic efficiency.

2.2 The costs with the Human Resources

Policy wages from Romania are different for every category of personnel. Even if in the summer of 2009 the Prime Minister Emil Boc negotiated with the syndicates a new policy wages, the law has given birth to many disputed at every level. Not only in the public sector, but also the private organisation did not agree with this law. There were many meetings with the representatives of teachers, doctors, policemen, judges and all the types of people that work for the public sector and in the end the result was not as successful as it was planned. Indeed, the economic crisis was the most important factor that changed the whole problem, but the government thought that any decision taken under actual circumstances would provide more or less income for the next years, more or less pleased people and revolutionary actions.

No matter what institution are they working, the personnel from the public sector in Romania is paid under some characteristics which are generally applied for everyone, the new law changing only the rise upon the next five years, thought after a schedule which had as a basic factor the economic crisis. The basic wage is only a piece of the total remuneration and it is varying after the budget category: public servant, teachers, army, public security and others. In most of the European countries the basic wage is at least 80% from the total remuneration.

In Romania, the law gives different types of pay rises, some of them for all the employs to increase their income, but others only for a few of them. Sometimes, different types of pay rises are in nature and not explained in the law. The main problem is that some of these pay rises have no transparency and are very hard to customize and to monitories. As a result of these practises, the link between the wage and the responsibility of the work is very thin.

More than that, the actual strategies for wages and the career development are not making the public sector a pleasant one. Even if after Romania has entered in UE and the demand for people with professional background and different competences increased, the remuneration policy is still unacceptable for many good specialists. This is the reason for which many of them chose to go and work in other countries where are better paid.

In the public sector, the only benefits that an employee has, is the pay rise for the time worked. The new comers are welcomed with a small wage and sometimes there are necessary too many years of work in the same place for a respectable income. So it is compulsory to do a re-projection of the posts and a re-evaluation of the responsibilities and the wage.

2.3 The structure of remuneration in the public sector

The costs with the personnel from the public sector are accorded under three levels of budget:

* Pay rise in nature -allowance for food, cloths, home, transport;

* Social contributions--paid by the employers to the retirement found, the health found and the dole found;

* Wages expenditures--basic wages, pay rise and other compensational expenditures.

Even if the actual wages represent the most important personnel expenditures, the real average varies between the force of civil work and the special sector one. The last one has preferential rights and also preferential pay rises, which are intended to cover the special needs of this sort of workers (policemen, gendarme).

More important, the pay rise are very important for the wage expenditures, so to decrease the expenditures it is necessary to cut many of these pay rises that are deserved by any category of personnel.

One of the tendencies in the last four years was the increase of the numbers of public servant in the local administration (41%). The increases to the local administration level were determined by the demand of personnel in the local public services and the delegation of the decisional power.

Until 2004 the number of posts approved in the public administration was limited by a Government Ordinance. Today, the lists with the posts are approved by a decision of the local councils or county councils, depending on their needs. Since the elimination of limitation, the local administration has raised the number of public servant in the public services and city halls.

2.4 Scenery of restructuration

The expenditures with goods and services must be reduced and a better using of the resources will decrease other expenditures. This thing is possible if the people from the public sector were more responsible for the goods and the services they offer, they receive and they expend.

The expenditures with the pay rise for extra work hours are measures that were taken to a higher level. The government took the decision to decrease the expenditures with the personnel and not paying for extra hours or not employing new people. A new step is to decrease the personnel of public administration and to assure a better scale of services quality.

Another measure that should be taken is to assure more training for the human resources, to prepare and to guide people for a better and efficient result of their work. It is common in the public sector to employ more personnel to accomplish some duties instead of specialize and to prepare experts in the main sectors by sending them back to study the newest discoveries and theories in that field and to make changes of experience from others more developed countries from EU.

But Romania's accession to the EU has not always been an issue without reservations. The Bavarian Minister Emilia Muller (2006) welcomed the decision to integrate Romania into the European Union but also emphasized that the accession of new member state should not cause negative externalities for other member state. Likewise, EU accession negotiations with Romania were much stricter than with formerly acceded member states and higher hurdles had to be taken before accession in 2007. The motives were not always based on calm assessments, only. Sometimes the European Parliament rather used the accession issue to deal with internal conflicts.

On the other hand, Romania did few effective efforts so far in communicating its progresses to a broader public. Hence, even scientific literature was sometimes surprised to find "Romanian institutions ... better than could be expected". The huge gap between the widespread image and Romanian realities is frequently reflected in surveys, which investigate the opinion of investors that already do business in Romania on the one side and potential investors on the other side.

3. CONCLUSION

This crisis gives an opportunity to the reforms which in the years of economic growth were not approved to be implemented and did not beneficiated of political attention at all. In the same time, the re-centralisation must be avoided and the progress in decentralisation already done must be preserved, also as the local self-sufficiency, according to European Charta of the Local Self-Government.

During the past few years, empirical economic growth modelling has emerged by constructing and testing numerous model and explanatory variable alternatives. One of the most promising recent ideas consists that also human aspects should be included as explanatory variables into economic growth models, therefore capturing influences of culture, moral and ethics.

4. REFERENCES

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Andy Pike et al. (2006). Local and Regional Development, Routledge, London

Fota, D. & Bacescu, M.. (2009). Criza economica din Romania anului 2009: Cauza, efecte, solutii, Editura Universitara, ISBN: 9789737495914, Bucuresti

Martin, R. (1999). The Regional Dimension in European Public Policy. Convergence or Divergence?, Basingstoke: Macmillan

Roberta, Capello (2007). Regional Economics, Rutledge, London