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The first predictor variable (independent variable) Gi – or institutional quality – is provided by NewsIn 2008. “Institutional quality” does not necessarily need to be uniformly distributed all over the country, not even corruption levels.[1] Unfortunately, fitting data with regard to corruption on the local level in Romania is missing to my knowledge[2] but the Romanian news agency NewsIn (2008) published in their comprehensive “Manual de Romania” a monitoring and ranking of the public administration for the eight Romanian Development Regions (cf. chapter 3.3). For each Development Region in Romania between three and four local authorities from different counties were monitored in the period of 1st August to 12th September 2007.[3] The 24 contacted institutions were the City Halls of the county-municipalities and thus, do not just represent marginal institutions but ought to be of major importance.

Each local institution was contacted twice, one time via fax and one time by post. According to law 544/2001 NewsIn requested information concerning “execuția bugetului primăriei, în ultimul an fiscal, modificările în structura personalului și în organigrama instituției. De asemenea, a fost solicitată și o listă a proiectelor de investiții derulate în 2006” (NewsIn 2008: 17).[4] The institutions were scored according to the four criteria “complying with legal deadline”, “quality of answers”, “response time (counted in days)” and “information accuracy”. For each category a score of 5 points could be reached.

Law 544/2001 establishes that each public institution is free “to levy a tax for the copying of the documents” (ibid: 169). Pricing for this service is not arranged by law and remains up to local authorities. However, with the exception of the City Halls from Bucharest and Iași no single institution exercised this option.[5]

We will use these institution ranking scores for our statistical tests as dependent variable.


Academic Research paper and Study of the Economy of Romania and Romanian Business

[1] The IHK Pfalz states in their FAQ that, at first, corruption does matter in Romania. On the other hand, Romania seems to be much better than its reputation. Most SME and big investors claim that corruption never has been an issue to them. Nonetheless, some branches, especially transportation are much more frequently subject to corruption incidents than others. Furthermore, “lassen … sich auch regionale Unterschiede feststellen” [regional differences can be identified; SH].Cf.  http://www.pfalz.ihk24.de/produktmarken/international/Laender_-_Maerkte/laender_regionen/anhaengsel4531/FAQ.jsp. With regard to institutional quality the Western part of Romania is perceived more business-friendly than the East but data is missing. However, even the West performs not uniformly well and also some parts in the East do well.

[2] The latest World Bank “diagnostic surveys on corruption in Romania” (World Bank 2001) captured interviewees from different regions but did not use the regions to control the results. Its results seem obsolete when compared to more recent surveys (cf. chapter 4.1.4), anyhow.

[3] An exception was the Development Region Bucharest-Ilfov. For this region two local authorities got monitored and ranked; one from the county Ilfov and one from the Capital.

[4] “the budgetary execution in the last fiscal year, structural and personnel changes. Furthermore, the agency requested a list of investment projects carried out in 2006” (NewsIn 2008: 169, SH).

[5] “Bucharest City Hall levies a 1 leu tax for the copying of a page while Iași City Hall imposes a 3 lei tax for the same service” (ibid: 169).