International Review of Administrative Sciences

http://ras.sagepub.com Reforming local public administration in Romania: trends and obstacles

Dacian C. Dragos and Bogdana Neamtu International Review of Administrative Sciences 2007; 73; 629 DOI: 10.1177/0020852307083464 The online version of this article can be found at: http://ras.sagepub.com/cgi/content/abstract/73/4/629

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International Review of Administrative Sciences

Reforming local public administration in Romania: trends and obstacles Dacian C. Dragos and Bogdana Neamt u
Abstract This article endeavors to diagnose and critically assess some of the challenges Romanian public administration is confronted with and to discuss some of the reform efforts that have been made in order to cope with these challenges. The concept of administrative capacity is central to this analysis the authors examine the practical implications of this concept and try to assess what could be done in order to increase the administrative capacity of local public administration and to complete the decentralization process. From a methodological standpoint, the article employs qualitative analysis. Secondary data analysis and document analysis (scientific papers and official documents such as laws, reports issued by the EU institutions) were used in order to justify some of the comments and assumptions made throughout the article. Points for practitioners The article highlights several of the reform efforts in the field of public administration undertaken recently by Romania. It points out that the process of decentralization is closely intertwined with the development of the administrative capacity of the territorial units. The authors argue in favor of seeking a balance between focus on internal reform and changing the relations between the public administration and society. One of the main conclusions is that although Romania has improved the legislation in the field of decentralization and local autonomy, there are still steps that need to be taken towards better implementation. Keywords: administrative capacity, administrative territorial units, city manager, community development associations, decentralization, local autonomy
Dacian C. Dragos is Jean Monnet Associate Professor in the Public Administration Department, Babes Bolyai University, Romania. Bogdana Neamt u is Assistant Professor in the Public Administration Department, Babes Bolyai University, Romania.
Copyright 2007 IIAS, SAGE Publications (Los Angeles, London, New Delhi and Singapore) Vol 73(4):629648 [DOI:10.1177/0020852307083464]

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630 International Review of Administrative Sciences 73(4)

Introduction
Romania joined the EU in January 2007. Nevertheless, real integration into the European structures requires that the public administration system acts according to the principles of the European Administrative Space, and is also capable of supporting Romania, in order to meet the requirements of EU membership. Thus, even though no acquis communautaire exists for setting standards of horizontal systems of governance or national public administrations, over time a general consensus on key components of good governance has emerged among democratic states. These components include the rule of law principles of reliability, predictability, accountability and transparency, but also technical and managerial competence, organizational capacity and citizens participation (SIGMA Papers no. 23, 1998 and no. 27, 1999). It was observed that the major challenge for Romanian local authorities in the short and medium term is to create the mechanisms for supporting Romanias accession to the European Union, in order to deal with the cultural and economic changes, but also to be able to manage European structural and cohesion funds and to implement public policies (Profiroiu et al., 2006: 3). The last Country Report of the European Commission (May 2006) on Romanias progress towards accession into the European Union acknowledges the progress made in the public administrations reform process; it recommends, nonetheless, that the pace of the reform should be maintained. The main reason for a positive appreciation from the European Commission is the new legislative measures taken by the Romanian policy-makers regarding decentralization and de-politicization of the Prefect position.

A brief description of the local public administrations structure in Romania

The Romanian public administration is structured according to a three-tier system of government: central, county and local. The state is divided from a territorial standpoint into counties, which are formed by communes, towns and cities (larger towns). By the association of several counties eight Development Regions were formed, for purposes regarding the integrated management of European funds and access to international financing, but also in order to prepare the moment when Romania will be able to send representatives to the Committee of the Regions of the European Union. The regions are not, however, administrative territorial units, and they are not legal entities, like the counties, cities and communes. First, at the central level the President of the Republic is elected directly by the citizens for a five-year term and he/she has the power to appoint the Government, upon receiving the approval of the Parliament. The President is not able, though, to dismiss the Government. Only the Parliament has this power, provided certain strict requirements are met. Thats why the Romanian system of government is considered to be a parliamentarian one but with a directly elected President. In other words, the Presidents powers do not match its legitimacy. Under the authority of the Parliament there are many independent agencies, their attributions ranging from intelligence

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Dragos and Neamt u Reforming local public administration in Romania 631

matters (Romanian Intelligence Service), to monitoring the fair competition (Competition Council) or mediating administrative disputes (the Ombudsman). Second, the county level is a tier of the government whose purpose is to coordinate the local public authorities for common interest projects or for operating public services. The county is a territorial unit, a public law entity, formed by communes, towns and cities. It has local autonomy and is run by a County Council elected directly by the population of the county, ranging from 31 to 37 members, according to the countys population. The County Council elects from among its members a President to be the executive official. His/her position is similar, in terms of attributions, to that of a Mayor. At the county level, there is also the representative of the central government, the Prefect, whose duty is to oversee that the administrative activity of the Mayors, Local Councils and County Councils is carried on according to the law, and also to coordinate the administrative units of the ministries in the territory. Until recently, the prefect was a political appointee of the central government. In the last year significant changes have been made with regard to this position it is currently a highly ranked public servant with theoretically a non-political status. Thus, the persons currently in these positions were members of the political parties and they were appointed as prefects before the law requiring their non-political status was enacted. Consequently, they resigned from the party, and after an exam they were re-appointed as non-political civil servants. Nevertheless, their informal connection with the party is still present. In order to make the position fully non-political, the prefects should be appointed from among a core of professionals, constituted before appointment, and on a competitive basis. Third, the local level is the level where the local autonomy principle brings public authorities close to the people. At this level there are communes, towns and cities. They are all public legal entities, generically called territorial administrative units. The communes are composed of villages, but only the commune is a territorial unit with legal personality, not the inner villages. Every city, town or commune has a Mayor and a Local Council (ranging from nine to 31 members), both elected directly by the citizens, at large meaning the whole territorial unit as a single unit,1 not divided into separate units. The councillors are elected as a block list of candidates, so from a partys list will enter the Council one or several candidates, in proportion to the votes received in the election (PR or proportional representation). Past proposals drafted by various civil society groups/organizations regarding the establishment of the nominal electoral system (which means electing the members of the council as individual candidates, representing a sub-unit of the city/town/commune, or at least on an open list, not as part of a blocked list) have failed to be adopted due to a political consensus not to discuss them in the Parliament. Another issue is the large number of council members which makes the decision process quite difficult and full of political compromises. The current system could be criticized because it keeps the members of the Local Council safe from being held accountable by the electors through re-election. The need to reform this system has been precipitated by several practical experiences, where Mayors were impeded to act and fulfill their promises because of frictions with the Local Council. On the other hand, several Mayors justified their lack of performDownloaded from http://ras.sagepub.com by dascalu nicoleta on April 21, 2009

632 International Review of Administrative Sciences 73(4)

ance because of the Local Councils lack of cooperation, thus hiding their own incompetence. It has to be noted that the Local Council has the final decision on most local matters, with the Mayor as the initiator and also as the authority who implements the decision. The members of the Council also have the right to propose legislation, so the Mayor can theoretically be ignored in the process. The Mayors party doesnt have the majority in the Local Council, as is the case in France, for instance. In this context, a major criticism of the system is that the decision-making process is quite slow and full of compromises. In addition, the fact that some of the villages which form/comprise/makeup a commune do not have proper representation on the Local Council of the commune, encourages the villages, as shown further on, to wish to go it alone and form a new territorial unit, a new commune.

Lack of administrative capacity at the local level and recent developments regarding this issue
It has been argued that effectiveness of the basic units of government depends upon municipality size (Dahl and Tufte, 1973; Newton, 1982). Large units are capable of better utilizing systemic capacities in order to provide public services, while smaller sized municipalities provide more opportunities for citizens to participate directly in governance (Horvath, 2000). Page and Goldsmith (1987) classify Western European unitary states local governance systems into integrated systems, those which have local government units adjusted to a size that supposedly allows providing quality public services, and nonintegrated systems, which have many local government units while other institutions, called integrative institutions, help them to fulfill common functions. Regarding the size of municipalities, Romania can be included in the latter category, thus joining its models, France and the Mediterranean states. Romania has 22.7 million inhabitants; 11.9 million of them living in urban areas with the rest, 9.8 million, in rural areas.2 In 2004, there were 42 counties (including the capital city), 314 cities and towns, 2820 communes and 12,957 villages. The average population of a commune is thus 3466 inhabitants, and that of a village 756 inhabitants. Classifying the communes according to the number of their inhabitants, there are 60 communes with under 1000 inhabitants, 532 between 1000 and 2000, 1747 with 2000 to 5000, 460 with 5000 to 10,000 and 21 with over 10,000 inhabitants. It should be noted though that among towns, 17 have under 5000 inhabitants, and there are a lot of towns with around 10,000 inhabitants. Thus, the communes with around 10,000 inhabitants are usually on the fast track to being declared towns. Comparing these numbers with neighboring countries that make a relevant comparison to Romania in terms of size, it can be noticed that in 1999 Poland had 2483 municipalities, the average number of inhabitants living in municipalities being 15,561 (considering all municipalities, not only the rural ones), and no municipality had less than 1000 inhabitants (Horvath, 2000: 43). The Romanian average inhabitants per unit, considering all territorial units and the entire population, would be only 6924. When the Western European models are considered, France has the largest number of communities (36,880) and the smallest average number of inhabitants
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Dragos and Neamt u Reforming local public administration in Romania 633

per territorial unit (1491). Following Page and Goldsmiths distinction between northern and southern models of local democracy structures (Page, 1991; Page and Goldsmith, 1987), countries from the Nordic part of Western Europe (Denmark, Finland, Ireland, Netherlands, Sweden) have an average of 386 territorial units and 18,338 inhabitants per unit at the lowest tier; the Southern European countries (Belgium, Italy, Greece, Portugal, Spain and France) have an average of 10,708 territorial units and 4802 inhabitants per unit at the lowest tier (Council of Europe, Structure and Operation of Local and Regional Democracy, country reports, cited in John, 2004: 35). It should also be observed that France skews this rate with its large number of territorial units. Comparing the Romanian averages with these figures, the conclusion is that Romanias territorial units are more numerous than those of the Nordic countries, and their average number of inhabitants is smaller. On the other hand, compared to the Southern states, the average number of inhabitants is bigger, while the number of territorial units is smaller. According to the data provided, Romania has a relatively fragmented public administration at the local level with numerous small to medium size communes which also have a low number of inhabitants. If we take into consideration that the size of an administrative unit has the potential to impact its administrative capacity, then efforts should be made towards encouraging associations among communes that will be more able to provide common local public services. On the other hand, administrative capacity could be built at the lowest administrative level by means of personnel training, support of publicprivate partnerships, and cooperation with local non-profits and community development associations.

Administrative capacity at the local level of administration

The administrative capacity of public administration is one of the central concepts in the Europeanization doctrine, and can be used as a theoretical framework for analyzing the current stage of local public administration reform in Romania. As the enlargement process of the EU progressed, the administrative capacity requirements grew in importance and complexity from administrative capacity to institution-building. Since 1997, the EU enlargement governance has required the strengthening of the institutional and administrative capacity of the candidates. The 1999 Commission Progress reports included the recommendations based on the new baseline assessment of the candidates horizontal administrative capacities made by SIGMA (1998). Institution-building was also made a goal of the PHARE program and was included in the objectives of the new enlargement instrument the Accession Partnerships. The repeated references to the new criterion, however, did not mean that there was more clarity on what it implied. The Commission defined institutionbuilding as developing the structures and systems, human resources and management skills needed to implement the acquis (Dimitrova, 2002: 178). From the standpoint of EU institutions, it was argued that administrative capacity is to be understood in relation to the implementation of the acquis in various areas, such as the single market, competition and so on (1995 Madrid European Council3). From a broader perspective, administrative capacity can be extrapolated to require horizontal capacity, reform of the administrative structures as a whole and, later, regionalization
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and reform of the judiciary. The main requirements associated with the bureaucracy criterion emerged as sectoral capacity to implement sectoral acquis; the development of European integration coordination structures; horizontal reform of the administrations including civil service laws and a strategy for comprehensive public administration reform; and, finally, ability to implement (Dimitrova, 2002: 178). At the international level, there is a growing body of literature on the topic of administrative capacity. Several definitions provided below are worth taking into consideration as they provide the main elements or criteria for assessing the administrative capacity or the lack of it at the local level. The conventional concept of capacity-building was very closely related to education, training and human resource development. It has changed over the years towards a broader and more holistic view, covering both institutional and systemic initiatives. The OECD defines capacity-building as follows: Capacity development is the process by which individuals, groups, organizations and societies increase their abilities to (i) perform core functions, solve problems, define and achieve objectives; and (ii) understand and deal with their development needs in a broad context and in a sustainable manner (OECD, 1995). Moreover, the modern concept of capacity development suggests a shift from building new capacities/institutions towards enhancement and strengthening of existing capacities. Administrative capacity is commonly distinguished from both state capacity and policy capacity although it is also usually recognized that the ability of organizations to achieve their specified goals is dependent on wider factors beyond the public sector and on the policy goals themselves being precisely defined (Painter and Pierre, 2005: 3):
Administrative capability means the institutional capacity of a government . . . to formulate and carry out plans, policies, operations, or other measures to fulfil public purposes. (Donald C. Stone in Honadle, 1981)

In relation to the Romanian situation, the projects aiming at reforming the structure and the functioning of local authorities in Romania present a very difficult challenge. The European Commission, in its regular reports, has stressed until recently that the current structure of Romanias local public administration is failing to provide a sound management of local affairs, due to the lack of administrative capacity at the local level. One of the reasons for these circumstances was connected with the incapacity of decentralized authorities to make use of their powers in the interests of the community and thus their dependence upon the central or regional authorities. The fact that the European Commission has not reiterated these considerations in its recent Report does not mean that the problem is solved; it only means that it does not deserve a red flag to influence negatively the progress of Romanias full accession to the EU. The lack of administrative capacity owes its existence to the weak expertise of public officials and the reluctance of trained specialists to work at the local level of administration, to the political-driven approach in managing local affairs, and of particular importance, to the municipalities size.

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Dragos and Neamt u Reforming local public administration in Romania 635

a. Human resources Two major issues have been identified in relation to human resources that seem to hinder the process of administrative capacity-building. The first one is related to the pay system in place for public servants. The second one is related to the training of public servants and how this affects their interest and motivation towards supporting the reform process. The pay system for public servants currently experiences several challenges with negative implications for those who work at the local level (Romanian Agency for Public Servants Reports, www.anfp.ro): a There is a lack of correlation between the level of the salary and the public servants responsibilities. The current system disregards the principles of equal pay for equal work. In other words, public servants doing the same kind of work get different salaries depending upon the institution they work for, more if they work for the central administration and less if they work for local institutions, and the ability of the institutions to attract supplementary funds this mainly happen at the central level. Due to these factors, there is a constant migration of public servants not only from the public sector toward the private one, but also within public administration from the local toward the central level. The most affected by this process are the small communes and municipalities who are not able to keep their personnel. b Difficulties associated with fighting corruption among public servants. The low level of salaries and the lack of correlation with the public servants duties and responsibilities very often lead to corruption and unethical practices. This phenomenon is exacerbated by very strict incompatibilities imposed for public servants. They are not able to engage in other types of lucrative activities, with very few exceptions. Corruption increases the negative perception of the society vis-a-vis the public administration c A lack of transparency with regard to supplementary revenues obtained by certain public servants. These are not usually disclosed. The second aspect related to human resources is training. The reform cannot be implemented by civil servants who do not understand it or who simply reject it. The building of a civil service body able to promote and support reform is a major task, and cannot be designed without involving universities (Hintea et al., 2006). In 1989, schools in public administration were non-existent in Romania. Nowadays there are more than 20 academic programs in the field, both in public and private universities. Given that these schools were developed in the absence of a tradition in the field, they appeared as annexes of departments of law, political sciences, economics, etc. This fact slowed the development of their own identity, and made it a very lengthy process. The attitude displayed by CNEAA (National Evaluation and Accreditation Counsel) in the 1990s was primarily directed that way, and it managed to be overcome only in the second part of the decade. The interdisciplinary approach for public administration is, perhaps, the most important common characteristic in all democratic countries (Hintea et al., 2006). The diversity of curricula, which can focus on various broad areas, depending upon the specific orientation of the

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636 International Review of Administrative Sciences 73(4)

school, is a normal and logical consequence. ASIAP (Romanian Association of Institutes and Schools of Public Administration) defined, in this spirit, the recommendations for development of curricula in view of the Bologna reform. An interesting question that arises with regard to the training of public servants involves their educational background. A survey conducted in 2004 shows that two-thirds of the public servants hold a bachelor degree. Out of those, 41 percent have engineering as background (the large number of engineers in public administration is due to downsizing in industry after the 1990s), 27 percent are economists, 15 percent law school graduates, 3 percent social science graduates, 2 percent administrative sciences graduates, 2 percent architects and 2 percent mathematics and computers graduates (IPP, 2004). The situation of the graduate degrees has changed dramatically in the recent years, due to specific governmental policies. Thus, the law on civil servants statute amended in 2003 requires every high ranking public employee to complete, before 2009, a program in public administration (administrative sciences), in order to keep their management position. Annually, almost every university in Romania has around 200 or more public servants in these programs (this is an approximation because no data exist). They come from different specializations (engineering, law, economics, education, etc.) and mainly are interested in getting the diploma required by law. The will to improve their education is mostly affected by their age (average 4045 years). Usually, the public authorities are paying for their top management employees to attend these courses. It has to be mentioned, though, that some other public employees are enrolling in such programs on their own initiative, because they know that at some point they will try to compete for a management position and then they will need the diploma. Those students are younger (average 30 years) and more willing to learn something in the program. The conclusion is that at least for the top management positions within local public administration, some type of public administration education is mandatory by law. The continuous education of the civil servants is assured mainly by the National Institute of Administration, which is a governmental unit subordinated to the Ministry of Internal Affairs and Administrative Reform and under the direct patronage of the Prime Minister (for more details, see Balan, 2004). There is an ongoing struggle in the Institute to issue diplomas instead of just certificates for continuous education, and these attempts face the opposition of the schools of public administration, grouped in the Romanian Association of Schools and Institutes of Public Administration. Another question that still has to be answered is whether there has been a substantial turnover among administrators replacing the older generation. There is no easy answer because there are no research data on this. Nevertheless, some observations can be made based on the perception of the public administration and on practical experience. First, it can be said that the newly trained specialists are more and more involved in management due to programs like the Young Professional Scheme, run by the Ministry of Internal Affairs and Administrative Reform with EU Twinning Projects support, which tries to support financially and institutionally young specialists trained abroad for at least one year, in order to come back to management positions in the public sector. The downside of the program is the low integration of these young specialists into the core of public servants after the program is over. The
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higher participation in these programs is that of employees of central public administration and territorial units of the ministries (inspectorates, directorates, etc.), while there is a lower presence in local public administration from the commune level. At the commune level, on the other hand, there is a need for undergraduate programs rather that graduate ones. There are, on the other hand, very few legal incentives to recruit specialists with international experience or with public administration studies, because the recruiting system is equalizing values. Every new entry in the system is based on an exam, where the knowledge of the laws specific to that field is important. The possibility of giving greater consideration to the qualifications of the candidate is assured by the interview that accompanies the exam. The data provided by the National Agency for Public Servants show that in 2004, out of 112,849 public servants, 44.43 percent were working in local public administration and among them, only 3.09 percent were at the entry-level position. Out of the vacant positions, only 16.24 percent were debutant positions, which require no experience (www.anfp-map.ro). There are no data available regarding the educational background of the public servants in management positions and in executive positions. Overall, though, the perception is that the older generation is still in control of the policy-making in public administration, while the infusion of young specialists can be traced at the entry level positions. Another perception is that the new generation of specialists is tempted to learn the old way of doing public administration, to blend in, rather that stand out and confront the old techniques. Thats why there is also a migration to the private sector or to other countries of the EU. Political interference in local public administration The local public administration is confronted also with the problem of the influence of politics upon administration in Romania. Even though a certain degree of political control is normal in any democratic society (considering the needed control over the bureaucratic machine and the democratic legitimacy of politicians), its negative effects are known and visible. One can observe here the personnel selection based upon political criteria, massive changes in the civil service body, continuous changes of objectives and policies, etc. The theory of de-politicization must be supported by a mentality of professionalization of the civil service body, which is an essential condition for administrative reform (Hintea et al., 2006). The political influence over public administration manifests itself mainly because the lack of capacity at local level weak local public administration needs guidance from the county level, which means in fact political control. Its no wonder that recent years have shown a major immediate political migration of the elected Mayors to the party (or parties) which won the county and/or national elections. One of the most significant examples is the political migration of mayors after the local elections in 2000 (Romanian Institute for Public Policy, 2003). The ratio of government-party mayors rose from 35 percent in 2000 to 64.4 percent in 2003. This development is directly related to the dependence of rural communities on financial transfers from the state budget and on the political influence in allocating these resources.

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638 International Review of Administrative Sciences 73(4)

The electoral system and its influence on the reform of local public administration Another issue that contributes to the low satisfaction of citizens with local public administration is the electoral system. Far from considering the models adopted by other former communist countries like Hungary and Poland, which distinguish between communities with a lower population and those with larger number of inhabitants when establishing the electoral system, Romania has the same electoral system for communes of under 1000 inhabitants and for cities with over 300,000, or for Bucharest, with 2 million. Thus, in Poland, municipalities with fewer than 20,000 inhabitants have a majority system, while municipalities over 20,000 inhabitants utilize a proportional system. In Hungary, the population threshold is 10,000, but the majority system is then compensated for on a party basis. The idea behind the proportional system in larger communities is that here the party involvement is stronger (Horvath, 2000). In smaller units, the quality of the individuals is instrumental in winning the elections and running public affairs. Having a party-list driven electoral system at the local level, one can imagine the interest of political parties to endorse the creation of new administrative territorial units, and the effect of government change over the local elected officials. They migrate from one party to another, following the partys position in power or in opposition. Despite all attempts of the civic society organizations to propose legislation that would establish the individual candidatures for local councils in rural areas (even on a party list), the political parties have joined together informally to bury from the beginning any such endeavor. Initiatives that targeted political migration failed as well. Political migration means mayors and members of the local councils leaving parties they belonged to at the time of the elections for parties that later won the national elections and thus controlled the transfers from the central budget so necessary for local development. All the aforementioned aspects have contributed towards the existence of difficulties in the process of building administrative capacity and furthering the decentralization process. The remaining part of this section focuses on how inconsistent and incoherent efforts made towards decentralization have generated a lack of administrative capacity as well. Inconsistent decentralization leading to administrative incapacity Decentralization in Romania was not a rapid and constant process. On the contrary, starting with the 1990s, the transfer of tasks from the central to the local level was gradual, inconsistent and substantively unequal (Coms a, 2007). Up until 1993, local authorities dealt with urban planning, urban services (garbage, cleaning, parks, roads, etc.), primary social services and few cultural establishments. Since 1993, public authorities are in charge of maintaining the public health institutions, which means between 12 percent and 15 percent from the local budget (National Union of County Councils of Romania, 2003). In 1995 the maintenance of schools (except university buildings) was transferred 10 percent of the budget. The ownership of the buildings of these schools was not transferred, though, so no incentives for real involvement of the local public authorities existed. Between 1996 and

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2000, responsibilities were transferred to local public authorities in areas such as child protection, regional airports, etc. Between 2001 and 2004, personal expenses and scholarships were transferred for schools, pre-kindergartens and some social services. Finally, in 2005 population evidence services were transferred and community police were set up. This enumeration could lead to the conclusion that the process of decentralization was carefully planned and monitored. In fact, a thorough analysis shows that it was done in the absence of a strategy, or of some impact studies (Coms a, 2007). Even when such a strategy was adopted (2004), there was no central unit to coordinate and to technically advise the sectoral effort of decentralization, and the ministries have not assumed the implementation of the strategy. The decisions to decentralize were taken on the spot, on the basis of international pressure and ignoring the cycle of public policies. They were not consistent, and the continuous conflicts between ministries also affected the coordination of the process. Moreover, the dialogue between the Government and the local authorities was politicized, meaning that there were consultations only with the mayors and the presidents of county councils that were close to the parties in power. In most of the cases, the transfer of competences was incomplete: local public authorities received only the task to cover expenses, not the chance to control the organizing and functioning of the public service. For instance, the schools are maintained by the local public authorities, but the establishment of a new school, the management of the school and the curriculum is centralized. In other cases, the transfer was incomplete because only the task was transferred, not the financial means to realize it. For instance, the national roads that pass the communes and cities are to be maintained by the local authorities, even though they are used by the nation as a whole and not only by the inhabitants of that city/commune. While discussing this issue, it is interesting to observe that in a survey, when asked are there any public services in your community whose performance will improve if they were decentralized from the central to the local level?, only 24.5 percent of the citizens responded affirmatively, while 36.7 percent considered that decentralization would not improve the operation of public services (Profiroiu et al., 2006: 11). The conclusion of the study was that smaller communities, which do not benefit from public services provided by the central level, have a more negative opinion about decentralization. A strong sense of frustration was also observed among local elected officials who think that the decentralization provided by legal texts is not implemented enough and therefore they ultimately depend on their ability to negotiate with the central level. This negotiation, on the other hand, brings with it the pressure to accept the corresponding political risk. Because financial subsidies from the central government depend especially on the resources from income tax and VAT collected from that territorial unit, a significant equalization effort is needed for communities to be able to fund the basic, legally compulsory functions. Consequently, it is almost impossible for these communities to generate resources to sustain development. Even the small and medium-sized towns are affected by the lack of resources when dealing with infrastructure projects. In an attempt to grasp the attention of the central Government, the Association of Romanian Towns has asked on behalf of over 200 municipalities for larger financial resources along with local autonomy, and the
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right to be consulted when the Government is decentralizing more competences to the local level, because often this process takes place without the decentralization of proper financial resources. The main request regarded the reallocation of some public revenues. Presently, from the income tax collected, 47 percent goes to municipalities, 12 percent to the County Council, 22 percent into an account managed by the County Council for re-equilibrating the local budgets, and 17 percent to the national budget. The Association asked that a larger percentage from the income tax and a percentage of the VAT should go directly to municipalities. The Government is in the process of amending the regime of local finances, and a Governmental Decision issued in 2005 (no. 521) includes the obligation of central authorities to consult the associations of the municipalities when adopting measures that would affect them and provides for a mandatory procedure of consultation as well. Taking into consideration the lack of resources in small and medium-sized towns, one can imagine then the stalemate in communes, which are much more affected by this situation. The process of reforming local public administration is also held back by the fact that in recent years, Romania has witnessed a process of disintegration of local communities into smaller entities, by creating new legal entities (communes) from the existing ones. Data from 2004 and 2005 show that in these two years alone 163 new communes have been created, the majority of them formed by a single village or two villages. The reasons for this situation are institutional (not all the villages have proper representation at the commune level), economic (the existing facilities in the territory of a village and the reluctance to share them with other villages), political (the perspective of having new political appointees and political elected officials, thus political influence in the zone, is profitable for political parties). Another aspect that cannot be disregarded when talking about political interests in such newly created establishments is the intermediate period between establishing the new commune by law and electing new local public authorities. In the period that follows immediately after setting up new communes and until the local elections can be organized (which is within six months from the enactment of the law), local public affairs are run by the Prefects appointees. The Prefect appoints not only the acting Mayor, but also the acting Secretary, which is supposed to be a non-political and professional public employee. The political nature of such appointees is evident, and the benefit they derive from running the communes public affairs during this period provide them with a jump start in the elections, and they frequently become the newly elected or appointed public officials of the new commune. The question that can be raised in this context is how these new entities are expected to perform their duties effectively in the context of reforming Romanian public administration, when entities that they were extracted from are lacking this competence? The effects of the trend we are witnessing are irreversible, because its easy to imagine that no political power will assume the risk of losing popularity by reuniting those communes or proposing a rearrangement of the regional public administration with its effect eliminating the job of mayors, local elected officials and public employees.

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Dragos and Neamt u Reforming local public administration in Romania 641

New legal mechanisms aimed at improving the administrative capacity and cooperation between local entities when providing public services
Provisions contained in several laws recently adopted by the Romanian Parliament are intended to increase the level of cooperation between local public authorities in providing public services and in managing European funds. They envisage the creation of so-called Community Development Associations which are designed to encourage/compel public entities to act in a collaborative manner when providing public services. Also, for the first time in Romania, the possibility of utilizing the institution of City Manager is provided, together with substantially reducing the political influence upon local authorities exercised presently by the institution of Prefect. Finally, the new provisions are intended to encourage the creation and development of metropolitan regions around urban agglomerations and a new legal base for local public finances. The new laws have already stirred up debate among practitioners and have caused adverse reactions from local public authorities. Community Development Associations It is our conviction that in this period of transition to a democratic society and to an efficient public administration, Romania needs to have large and strong local communities, due to their better ability to manage infrastructure projects, access and make use of European funds, operate public services and employ specialized human resources. Regardless of this imperative, as shown above, the trend was to increase the number of small communes, and the process, once started, will be very hard, if not impossible, to turn around. It was argued (Swaniewicz, 2001: 39) that, taking into consideration the unwillingness of citizens to be directly involved in policy formulation, improving the quality of local services might sometimes be the best strategy for improving the level of satisfaction of citizens with local democracy and the decentralization process. In this context, the solution envisaged by the policy-makers at this moment is to regulate institutional and financial instruments designed to bring together communes that dont have self-governing capacity and encourage them to work together in order to provide better public services for their citizens, to access European funds and generally to better manage the local affairs. The institutional instrument designed for this purpose is the Community Development Associations, legal entities formed by several communes or communes together with towns. By setting up these Associations three major objectives are targeted: First, to bring together, within a collaboration mechanism much more efficient than other mechanisms established before, those communes that lack the institutional capacity of facing the challenges brought about by the European integration, and which, collaborating among themselves, can overcome the difficulties. The model exists in Germany, for instance, where in some federate states there have been established associations of smaller communes to deal with their incapacity to self-govern. The association deals with matters beyond the scope of a single
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642 International Review of Administrative Sciences 73(4)

commune. They are run by a representative body presided over by a mayor of the joint communes (Schrder, 2002: 104). Second, to promote, for the first time in the Romanian legislation, the Metropolitan Regions, as an institutional form of association between a town or a city with neighboring communes. These communes have become in time satellites of the city, and they need better public services in order to attract professionals from the city to live in the area. They also have something to offer to the city in exchange: large portions of land where big investments can come and settle, knowing that cities have trouble finding large terrains for such investments. It has been argued (OECD, 2001) that cities need to be competitive, but the quality of life of a city is nevertheless a key factor of competitiveness. Reconciling policies aimed at improving the position of the metropolitan areas in the national and international arena while respecting the goals and interests of the local electorate is a major challenge for city leaders. The ability to meet this challenge will depend upon substantially enhancing the governance capacity of metropolitan authorities. Third, the Association can be formed also by counties. This provision has been criticized, because the counties already have a collaborating mechanism within the regional strategy that endorses the law on regional development. According to this regulation, the national territory is divided into eight development regions, formed by three to five counties, which are not public entities, but have a role in coordinating the counties for regional interest projects. The association has the power to take over a part of the competences belonging to the mayor and the local council. Taking over those functions is possible due to the decision of the local councils of the communes which are members of the association, at the beginning of the association or anytime thereafter. The functions are exercised in common, in the name of all the entities that are members. Among such tasks can be mentioned: operating public services and running large public projects, mostly infrastructure ones. Setting up the Association is realized upon the initiative of the executive officials (the Mayor or the President of the County Council), by decision of the Local Council, that is, of the County Council. Then the executive officials carry on the process of setting up the Association, representing the public body (commune, city, county). At the time when the Association is being set up or after this time, the public body appoints its representatives on the Board of the Association. The financing for the activity of the Association would be assured from a special established fund, at the central level, and also through the State Office for Decentralization. The financing aspect represents the main tool to encourage setting up such collaborative forms of local development. In the absence of financial incentives, no Mayor or Local Council would set up associations, preferring to act on their own even if they dont have the capacity to do it adequately, as stated above. The Public Administrator The law introduces a new institution for Romanian public administration, the Public Administrator, which is intended to be the replica of the city manager model in Romania. The model functions not only in the United States but also in Europe (the

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Dragos and Neamt u Reforming local public administration in Romania 643

Local Administration Director in Ireland, for instance) (Terrazoni, 1992). The initiators of the law had to consider, though, the resistance of the Mayors towards giving up their functions and powers in favor of a hired professional. The reluctance is somehow normal, taking into consideration that the Mayor is elected directly by the citizens, and its accountability towards them is impeding any formal and definitive delegation of the Mayors powers to any appointee. In this context, in Romania, the Public Administrator would be a contractual appointee, serving at the will of the Mayor, not a hired professional at the will of the Local Council, as in the American model. This solution is not new, being implemented by other Central and Eastern European countries (Horvath, 2000: 41). It was adopted as a compromise between the necessity that the Mayor would delegate its current operations powers to a professional, and the fact that only the Mayor has the greatest legitimacy as an elected official. The alternative model, according to which the city manager is appointed and can be dismissed by the Local Council, works only in those systems where the Mayor is elected indirectly, that is from among the members of the Local Council. It has to be noted, also, that the Public Administrator can be appointed or hired by Community Development Associations as well. Local public finances reform Another aspect that had to be improved by the policy-makers was the way in which local public finances are managed. Thus, a new regulation on local public finances was adopted (Law 273/2006). It serves the purpose of improving the implementation of budgetary principles and procedures, following generally the model of Western democracies and especially the Financial Regulation applicable to the EU budget. The new regulation reiterates four budgetary principles according to which the local finances need to be managed: financial autonomy, consultation, proportionality and solidarity. A problem that occurred while implementing previous stages of reform was that the County Councils had the tendency to use their power of equalizing local budgets as a political tool for subordinating, influencing and even recruiting the locally elected officials. A permanent preoccupation of the policy-makers was, thus, to stop this process and to make the equalizing process a transparent and accurate one, based only on the needs of local communities. The solution found at this moment is to empower the county branches (extensions) of the Finance Ministry to do the budgetary equalization, using accurate technical specifications. This measure is thought to respond to the criticism enclosed in the European commissions regular reports on the progress of reforming public administration. Moreover, there have been established concrete criteria for exclusion from the equalization process of the local communities which dont need such financing, considering their budget and their overall development. The criterion will be the Medium Income Rate of the inhabitants, which has to be under the county average in order for the locality to be considered for financing. This measure will support those communities that are in real need of subsidies from the county level. The overall situation, though, will not record a spectacular improvement, due also to the policy, as mentioned above, of allowing the setting up of new communes by dividing the existing ones.

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644 International Review of Administrative Sciences 73(4)

Another provision, applicable from 2008, will change the way in which local budgets are designed. It regards the philosophy of the structure of the budget, namely dividing it into operating expenses and development expenses, with clear guidance for assuring the existence and feasibility of both parts. The operating section includes current functioning expenses and will be made up by local taxes and transfers from the central budget as parts of the central taxes. The development section will be made up of international funds, grants or loans. The central Government will also finance local development projects on a competitive basis. The need for such provisions came from the fact that, at present, few communes can afford to have development provisions in the budget. Until now, local communities could borrow up to a total of 20 percent of the local budget. This percentage seems high and unsafe when comparing it to the US average, but is far from being enough in a candidate country trying to co-finance European subsidies and grants. Thus, the new regulation raises the limit to 30 percent of the budget, allowing local authorities to engage in multi-annual development and infrastructure programs. The Prefect and the Ministry of Finance will be in charge, as before, to check that local communities do not exceed this limit. The regulation introduces also for the first time in the Romanian legislation a separate chapter for the insolvability of the territorial administrative units, with its components: the financial crisis, the insolvency and insolvability. Regarding the transparency of the budgetary process, the law states the obligation of the public authorities to post on their web page the budget proposal (draft), the execution of the budget and its amendments, and also the duty to periodically (every three months) update the data posted. With a view to making the most out of the provisions of the local public administration law regarding the Community Development Associations, the local finances law introduces the possibility of financing these Associations through the special fund set up for this purpose. Another aspect of past regulations that was heavily criticized regarded the practice of local authorities to intentionally assess revenues as being lower in order to get more equalizing subsidies from the central or county level of government, and then to ignore the process of cashing those revenues, relying thus only on subsidies. To prevent this practice from being carried on, the new regulation sets up sanctions for public authorities involved in such practices. A new legal framework for decentralizing public affairs Up until now, the decentralization process has been carried on without any written rules and rather sporadically, not as a consistent policy (Coms a, 2007). The main feature of this process was that many new competences were transferred from the central level of government to local public authorities without providing also the financial means to support them. Due to its broad implications, the decentralization process is very difficult and involves coordination of all actors concerned together with the acceptance by the local authorities of the measures convened. For the purpose of making the decentralization effort more coherent and integrated, the new Framework Law on Decentralization no. 195 of 2006 enables the Ministry of Internal Affairs and Administrative Reform, through the newly established
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Dragos and Neamt u Reforming local public administration in Romania 645

Decentralization Office, to be the institutional structure which coordinates the other ministries and agencies as regards the decentralizing process, in order to avoid disparate and inefficient decentralizing measures. Moreover, the rules according to which the process shall be conducted are established quite accurately. Thus, new competences can be transferred to the government level closest to citizens, but only when the administrative capacity of this level enables implementing such competences. The selection of the competences to be transferred shall take into consideration several aspects, like economic efficiency of the public services delivered in a decentralized manner and the size of territorial areas where the public services beneficiaries are located. Before transferring responsibilities, several pilot projects need to be carried out in order to test the system. In this context, the process of decentralization shall encourage local communities which do not possess the administrative capacity to manage the decentralized responsibilities to set up Associations of Community Development, according to the new Law on Local Public Administration, in order to receive such decentralized responsibilities. The transfer of responsibilities to the local level shall be accompanied by the mandatory transfer of all the corresponding financing. At the same time, a set of cost standards will be assessed, enabling central Government to determine the necessary costs of providing the public services in a decentralized manner. Furthermore, there will be some common standards for providing public services which local public authorities will have to observe. The concept of administrative capacity is meant to govern the transfer of competences to the local level. Activating this concept was necessary because until now the decentralization policy has looked at all territorial units as equal recipients of the decentralized competences, although their administrative capacity was quite different. On the other hand, the imperative of providing the same quality of public services for all citizens requires transferring the existing central-managed competences to the level of local administration that is at the same time as close to the citizen as possible but also capable of managing the competences in a satisfactory manner. Thus, when local public authorities from communes do not possess the capacity for receiving such competences, the next level (county) will receive the competences instead. As of 2006 Romania has completed the decentralization of a significant number of public services, and the decentralization of others is currently pending. In the first category one can include public utilities, local road maintenance, social services, urban planning, and public housing, management of local cultural institutions, taxes and fees. In the second category, characterized by an early stage of decentralization, one can include public health (the management of hospitals has already been decentralized to the local level), the management of crisis situations, local police. In a more advanced stage is the decentralization of public education (kindergarten through grade 12), of the so-called national cultural institutions, and regional airports. At present, the ministries in charge are in the process of drafting strategies meant to further the decentralization of the services in the second category, and also are starting the decentralization of new responsibilities such as those in the field of employment.
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646 International Review of Administrative Sciences 73(4)

Currently, based on the level of responsibility of the local public administration, the competences in the provision of local public services are divided into three main categories (a) exclusive; (b) shared; and (c) delegated. a Exclusive competences mean that the local authority has the right to decide in every aspect of the local affairs. They include public utilities, local cultural institutions, urban planning and land use, social services for elderly, management of hospitals, and regional airports. b With regard to shared competences, local authorities share their responsibility towards the provision of certain services with either the central level or, in fewer instances, with other levels of the local public administration. In this category one can include public education (kindergarten through grade 12), public safety, management of crisis situations, public housing, etc. c The third category includes all services provided by the local administration but financed by the state. In this case the local administration is merely an agent of the state. At this point in time delegated competences include subventions for persons with disabilities and for their support personnel.

Concluding remarks
Reforming a former communist public administration is a daunting task, and it takes more than a decade until the first signs of success can be observed. The process is a painful one and it has to be approached with great care so that new mistakes do not hold it back. The developments presented in this article are the expression of a stepby-step approach to the reform, while considering the resistance to this endeavor of the political parties and of the old mentalities entrenched in public officials minds. Central to our analysis is the concept of administrative capacity. Narrowly defined, it means the ability of public administration to implement the acquis in different sectors. From a broader perspective, administrative capacity includes the managerial, human, technical and financial resources and the ability of an administrative institution to act upon its responsibilities in an efficient and effective manner. In Romania, one of the problems that hinders the administrative capacity of local public administration is fragmentation. This can be addressed as mentioned before by encouraging cooperation among different municipalities and communes in the provision of services. Another avenue can be also pursued efforts should be made to strengthen the lowest local level in charge. Based on the data provided, this could be accomplished by a more efficient management of human resources the most important problem to be solved remains the discrepancy in civil servants salaries between the local and central level, the implementation of the public administrator position a variation of the city manager position, though less politically independent, etc. The concept of administrative capacity is closely intertwined with the decentralization process. Significant steps have been made, but there are still problems. The most important one stems from a lack of vision and coherence over the long run with regard to decentralization in Romania. Several important measures were implemented but without being coordinated. The newly adopted framework law on decentralization holds the promise of making a difference. It is built on the concept of
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administrative capacity and for the first time it tries to phase the decentralization process according to the capacity of the local level. It also creates stimulants for the fragmented local level to cooperate with the provision of public services. Romania is now in the position of being less criticized by the European Commission in its regular reports on the issue of public administration reform. It is a first for our country to be in this position and it shows that improvements have been made. Nevertheless, Romania lacks the stability of the legislation necessary to deepen the reforms already realized and the political willingness to implement the existing regulations. In order to tackle this issue, an Administrative Code and an Administrative Procedure Code need to be adopted, so that the actors engaged in the public sector can develop law-abiding mechanisms and administrative good practices. Moreover, existing regulations have to be properly implemented and safeguarded, because any rules without proper implementation are useless. Romania has been characterized as having good laws, inspired by European experience, but at the same time lacking the will to implement them.

Notes
1 It is called circumscription in Romanian. 2 Source: Romanian National Statistical Institute, 1 July 2004, available at www.insse.ro 3 http://www.europarl.europa.eu/summits/mad1_en.htm

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