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01.06.2016.

Centralism, Corruption and Underdevelopment - Romania’s Way Out

Centralism seems to be encoded in Romania’s political DNA. Communist centralism was engrafted upon an earlier tradition inspired by nineteenth-century France, so that the unholy trinity centralisme, étatisme, dirigismebecame an article of faith of the Romanian state. Against this background, crony capitalism and state-induced corruption have been common currency since the collapse of communism.

Centralism has a double articulation in Romania. It is historically inherited and geographically replicated. The centralism of Bucharest is reproduced in the forty-one counties, each ruled rather feudally by a president of the county council, aptly nicknamed ‘local baron’ in contemporary folklore. The ‘decentralisation’ effected by post-communist governments has mostly meant just the reinforcement of a secondary level of centralism. The flow of public money went from the central government down to the barons, and from these to their feudal clients, the mayors. The more influential a baron within the governing party, the more financing he received from the central government; the more compliant a mayor, the more eligible his infrastructure projects. This system provided a convenient way of blackmailing mayors, who often switched parties in order to get their projects funded, and thus to ensure their own re-election. 

This pseudo-decentralised scheme has predictably generated corruption and stagnation. The lasting political and economic power of barons suffocated the counties, and hindered any attempt at regional reform. Each baron was jealous of his own fiefdom, and seldom cooperated regionally with other barons in order to develop much needed services, such as regional hospitals or transportation.

Few decentralisation initiatives taken by the central government over the past decades had in mind the common good, or the sound values of localism and subsidiarity. Prerogatives were devolved to local authorities that had no money to cope with them, and thus kept depending on subsidies from the government. Big cities managed to get along, but small towns and the all too numerous rural communities entered a prolonged state of indigence, or even bankruptcy.

Fake decentralisation also meant the creation of so-called ‘deconcentrated’ authorities, suspended in a limbo between local and ministerial control, and ruled by the unwritten rules of political influence and corruption. The agencies governing water, forests, energy or transportation generated great fortunes for a few well-connected businessmen. Under the disguise of decentralisation, the socialist government led by Victor Ponta (May 2012-November 2015) attempted to transfer the ports of Galați (on the Danube river) and Constanța (at the Black Sea) to local authorities controlled by socialist barons. Instead of being privatised, many state-owned agencies and enterprises functioned as piggy banks for the barons and the parties in power.

The way out of this state of things involves two apparently contrary measures. On the one hand, real subsidiarity should free the local communities from their feudal overlords, the barons and the ministers. The greatest share of money should be spent where it is produced, which would allow more areas to become sustainable. Wealth is contagious, and competition among regions will further stimulate economic growth through innovation, low taxation and business-friendly regulations. On the other hand, unsustainable rural communities should merge and become viable administrative units, or enter metropolitan areas, with integrated transportation and better public services.

To quote just an example, Cluj, Romania’s second largest city (over 320,000 inhabitants) is one of the welfare poles in the country due to the presence of important universities and innovative industries. As a result, the population of former villages around Cluj has boomed. With 7,000 to 20,000 inhabitants each, these populous outskirts lack proper schooling, medical or transportation infrastructure. The solution is to integrate these communities into a metropolitan area, rather than to expect overcrowded yet undermanaged entities to build the much-needed roads, schools and hospitals by themselves, or through the good will of barons and the government.

Zooming out of Romania, now, a glimpse at the Eurostat map presenting the GDP per inhabitant in purchasing power standard by NUTS 2 regions in 2013 discloses the undeniable effects of centralism.

In federal or decentralised countries, the discrepancies between the capital city and the richest regions tend to be lower than in countries with a centralist tradition. For historical reasons, countries like Italy, Austria and Germany are the best examples, and their wealthiest regions can be richer than the capital city. In the new EU member states, only the regions around the capital cities have managed to exceed the EU average of relative wealth; interestingly, this also concerns East Germany. In Romania, the gap between the richest and the poorest region is particularly high: the Bucharest region reached 131% of the EU average in 2013 (higher than Lisbon, and comparable to Lombardy and Madrid), whereas the Northeast region is struggling to reach one third of the EU average.

A long tradition, inscribed in the Maastricht Treaty, but going back, through the Quadragesimo Anno Encyclical, to Thomas Aquinas’ commentaries on Aristotle’s Politics, stresses the commonsensical truth that bigger communities include smaller ones, all the way down to the basic community – the family. Unlike most modern nation states, the European Union was born subsidiary. It would be a shame if centralism rather than subsidiarity were allowed to dominate the common philosophy and political practice of the Union. Countries like Romania, still struggling with the nefarious effects of communism, would not benefit by the addition of a further layer of centralism to the already existing ones. In joining the Union, Romanians hoped to find a bulwark against the corrupt practices of centralised national power, and to obtain the enfranchisement of local communities. This expectation remains plausible if the Union does not abdicate its original design.

Adrian Papahagi, PhD is Associate Professor of Mediaeval Studies at the University of Cluj, Romania and a founding member of the M10 Party.

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