Abstract
|
Looking ahead: public decisions under increasing scarcity
The case of the Romanian Public Administration (2007-2009)
Initial Abstract
The resources, as classical divided by the economists into land, labour and capital, and their scarcity problem immediately triggers the private sector’s fear of not being able to satisfy every desire. The public sector, due to its myths of endless resources, job security and large investments, seemed rather certain such fears would not be born. The present times contradict what was meant to be a certainty. The current events put more and more pressure upon the public sector that finds itself constraint to limit the use of its production factors and goes deeper into the scarcity pot thus forcing the economy to remain on or below its production possibilities curve (PPC) and placing the chance for an outward shift of the PPC in the not so immediate future (Tucker, 2005).
In this context, decision-making, as the core of the policy cycle and the process by which governments adopt a particular course of action or non-action (Howlett, Ramesh and Perl, 2009) faces a more and more forked and bumpy trajectory, which triggers a per se substantiation. Consequently, the traditional tasks that governments and their administrations usually undertake have multiplied, and have become much more complex in scope. Is the curse of the public institutions to walk on shaky ground and deal with problems that have become perverse as they hide very delicate matters that need to be solved.
All these considerations are to be taken into account here, in this paper, a particular focus being rendered to the Romanian context. On national level, Romania is facing such a complex situations as presented above due to the economic crisis but, moreover, due to the ill-advised economic policies. Zooming into this situation, the paper seeks to underline the actions of the Romanian central PA pertaining to the reduction of the salary, pension, allowances expenditures, lump sum payments of entitlements as well as other salary type rights in the public sector. At the same time, the action of tax raise shall be looked into, with regard to the VAT increase and enlargement of the tax base for the revenue tax and the social contribution base. Were these measures well balanced before being included in the Memorandum of Agreement concluded between the Romanian Government and the European Commission and the Stand-By Arrangement concluded between Romanian and the International Monetary Fund? Were they the only option in hand? These questions are to be answered making use of an extensive documentary research of national policies and statistics relevant for the timeframe 2007-2009. Further, a comprehensive analysis of several interviews made with top officials of the Romanian Central Bank and the Romanian Government is to be taken into account. The conclusions of the research show that the Romanian PA’s sin becomes its action adopted in reaction to the current situation, simply put “reduce expenditures, raise taxes”, and multiplied beyond necessity. In other words, not only breaking the lex parsimoniae, but also ignoring other possible actions, for the same above mentioned reason: being stuck in a loop that endlessly multiplies itself.
Further explanation
The paper aims at a back to the future approach of the PA’s decisions pertaining to the recovery after crisis. For the paper’s scope, back to the future is defined as the current of thought according to which the decisional branches should be kept simple, namely should not be multiplied beyond necessity, with reference to Occam’s razor. PA’s future seems to be designed in a more and more complex manner, in contrast to the past future that emphasised simplicity, which the paper would like to better apply. Every day complex private mechanisms are forced onto its basically simple law-based PA instruments, e.g. IT platforms used to interconnect departments, cockpit decision-orienting system designed by the Belgian professor Patrick George, or costing tools like Activity Based Costing. We find ourselves in a situation were unnecessary decisions are on the verge of being implemented (e.g. the recent vote by the Romanian Senate to reduce the income tax rate from 16 percent to 10 percent), or public offices of extremely importance are cancelled without and in-depth analysis but only due to the one to seven rule (one hired public servant for each seven dismissed). The result is in antithesis with the initially aimed one and thus the triggered inefficiency knows now its entire three forms: allocative, productive and organizational. There is a lack of predictability of the evolutions due to the legislative and institutional chaos created by these decisions or the endless budgetary quarrel at the end of 2010. This paper suggests a more focused approach, which would not ignore the needs of each stakeholder. Like stated in the initial abstract, the analysed decisions refer to the ones taken in the context of Romania’s Stand-by Arrangement (2009-2011) with the International Monetary Fund, with special reference to the downsizing decisions unitary implemented. The present analysis shall emphasize the need for a deeper understanding of the single simple environment of a public institution that should not be subjected to a mass-applied complex public decision.
Key words
Public decision, scarcity, production factors
References
Howlett M, Ramesh M and Perl A, Studying Public Policy: policy cycles & policy subsystems, 3rd edition, Oxford University Press, 2009
Tucker IB, Economics for Today, 4th edition, Thomson SW, 2005
UPDATED VERSION
|
