Paper/Speech Details of Conference Program for the 19th NISPAcee Annual Conference Program Overview Fiscal Policy Author(s) Ovidiu Stoica University "Alexandru Ioan Cuza" Iasi Iasi Romania Oprea Florin, Mehdian Seyed, Title The reform of the public expenses in Romania – expectations and results File Paper files are available only for conference participants, please login first. Presenter Abstract The governmental expenditure represents a significant component in the equation of the general economic equilibrium and GNP determination. In follows, the state is able to influence the economy and the society through specific fiscal and/ or monetary policies. Considered as a basic instrument of the fiscal-budgetary policy, the public expenditure serves to achieve the objectives of the general policy, in the context of the “musgravian” functions of the public budget i.e. allocation, distribution and economic stabilisation. The accomplishment of these objectives depends on the approach that public expenses are conceived and applied, taking into consideration the objective correlations that develop in the economy in the process of implementations of the policies. In this framework, our paper analysis the measures of public spending policy in Romania for the period 1990-2010, highlighting the correlations between the declared objectives and the results obtained, in order to identify the sources of disfunctionality. We further propose solutions for improvement. The key questions that we raise in our study are listed as follow: - is the structure of the public spending in concordance with real needs? - is the dimension of the public spending based on economic rational? - is there any well-defined connection between the level of the public spending and possibility to cover them? - What are the structure and dimension of the public spending for different sectors? Is there any correlation between public spending and optimal and sustainable economic growth? - What are the impacts of the European integration on the policies of public spending based on a pre/post EU accession analysis? In order to answer these questions, we employed a set of models to quantitatively analyze the public expenditures in Romania. We collect data from the Romanian Statistical Yearbook, Eurostat, IMF Statistical Yearbook, OECD data, annual central and local budgets and special funds. We attempt to identify and highlight changes in structure and dynamic of government spending and to investigate the correlation of these changes with the macroeconomic variables such as GDP, investments, consumption, unemployment. We, in addition, conduct a comparative analysis with the EU averages. More specifically, we use Data Envelopment Analysis (DEA) to measure the efficiency of the expenditures reform in the Romanian education and health sectors, and compare the result with international data. Our study, furthermore, concentrate on a three year period from 2008 to 2010 to analyze the method that the public expenses and their efficiency were prioritised during the period of financial crisis and to predict the outcome of the policy of public spending for the next period.
