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3.3.9 Regional Disparities

Regional disparities are nothing new in Europe. The interesting point is their persistence and maybe slightly increasing trend. In the Romanian case, the year 2000 was the first year with clear positive growth. Furthermore, many subsidies were removed only between 1997 and 1999. Hence, the year 2000 seems the best fitting starting point for tracing the development of regional disparities in Romania.

Image 3.25: GDP per Capita 2000 by County in Romania
Regional Disparities in Romania as indicated by GDP per Capita by County

Source: Eurostat2008, own graphic

Inherited Regional Disparities in Romania

Since 2000, few things have changed concerning the order of the counties. Only few stepped up in rank (namely some Transylvanian counties which outperform now the few better developed counties from the south) while the disparities between the counties even have slightly increased. This is illustrated by the mean which moved some steps to the right when compared to Figure 3.16. In 1998, the earliest year with regional GDP per capita data at both INS and Eurostat, the coefficient of variation amounted to some .35, decreased by 2000 to .32 and reached again .35 by 2005. Convergence and a catch up on the regional level would imply higher growth rates for initially poor counties and lower growth rates for the “richer” counties. But such an effect is not to be observed.

Image 2.26: Growth Factor 2000 – 2005 and Initial GDP per Capita
Regional Disparities seem to persist as growth rates for the counties suggest

Source: Eurostat 2008, own calculations, own graphic

The good news is that also the poor regions grow but the rich regions do likewise, even at a slightly faster pace. Per capita GDP doubled on average between 2000 and 2005 and growth was equally distributed among the counties, thus did not follow any convergence path. The coefficient of variation even suggests an increasing trend of regional disparities. Overall, the pattern of regional disparities is not a new one but seems inherited as it still are the traditional better developed counties which continue to exhibit higher per capita GDP levels.

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

Accordingly, for further use in chapter 4 the appropriate measurement for regional disparities are not growth rates as they do not exhibit a usable trend but the perpetuated more or less equidistant GDP per capita levels among Romania’s counties. From a technical point of view the persistence of regional disparities has the advantage that it is virtually indifferent for most cross-county calculations for which year GDP data is deployed. The typical deployed Development Region perspective will be abandoned as county-level data reflects the development gaps more clearly. Chapter 3.4 and 3.5 will add some observations with regard to labor markets and FDI-attractivity on the national and regional level.