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Are Investments in Basic Infrastructure the Magic Wand to Boost the Local Economy of Rural Communities from Romania?

Alexandru Pavel (), Bogdan Moldovan (), Bogdana Neamtu () and Cristina Hintea ()
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Alexandru Pavel: Department of Public Administration and Management, Babeş-Bolyai University of Cluj-Napoca, Cluj-Napoca 400084, Romania
Bogdan Moldovan: Department of Public Administration and Management, Babeş-Bolyai University of Cluj-Napoca, Cluj-Napoca 400084, Romania
Bogdana Neamtu: Department of Public Administration and Management, Babeş-Bolyai University of Cluj-Napoca, Cluj-Napoca 400084, Romania
Cristina Hintea: Department of Public Administration and Management, Babeş-Bolyai University of Cluj-Napoca, Cluj-Napoca 400084, Romania

Sustainability, 2018, vol. 10, issue 10, 1-32

Abstract: This article investigates if public investments in rural basic infrastructure represent the best strategy for boosting the local economy of rural communities from Romania. The article focuses on one specific program implemented under the Cohesion policy in the framework of the National Plan for Rural Development, called Measure 322. Geographically, the research included a sample of rural communities from the North-Western Region of Romania. Moreover, the study also looks at other determinants of local economic development (LED), rather than infrastructure investments, with a focus on certain features characterizing Romanian rural communities such as population size, isolation from urban centers, connection with European and national roads networks, educational stock, etc. The research included three steps, namely the construction of the LED Index, a cvasi-experimental research, and a regression model. Our main findings seem to suggest that, while investments in infrastructure do help, the development gap between beneficiaries and non-beneficiaries remains relatively the same. In terms of determinants of LED level, percentage of population with a university degree and connection to a European road are the most significant in the Romanian rural context.

Keywords: local economic development (LED) index; basic infrastructure; rural development; Romania; impact assessment (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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