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Imbalances in Financial Autonomy at Different Level of Local Government in Romania

Gheorghe Matei and Olivia Manole
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Gheorghe Matei: University of Craiova, Romania
Olivia Manole: University of Craiova, Romania

Annals of the University of Petrosani, Economics, 2012, vol. 12, issue 4, 137-146

Abstract: Fiscal decentralization is an important influence factor on the autonomy of local government. To the extent in which a local government benefits from amounts and transfers from the central government, it depends on it and has a reduced capacity to make decisions about the services they provide to citizens, local autonomy being limited. Even if the legal framework for decentralization was created in Romania, we still can not talk about a high degree of financial autonomy of local governments. Further, significant amounts from the state budget are transferred to local budgets to cover local expenses. Moreover, despite consistent efforts to implement the decentralization process, there is a series of imbalances, especially in smaller territorial administrative units that are clearly disadvantaged both in terms of financial capacity to finance themselves through local taxes and duties, and especially in terms of the low absorption capacity of European funds. In general, in Romania, the degree of financial autonomy differs nationally from the city level and from the village level.

Keywords: financial decentralization; financial independence; local revenues; local expenses (search for similar items in EconPapers)
JEL-codes: H71 H72 C58 (search for similar items in EconPapers)
Date: 2012
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