From Corruption To Modernity The Evolution of Romania's Entrepreneurship Culture

SPRINGER BRIEFS IN ECONOMICS
Sebastian Văduva
From Corruption
to Modernity
The Evolution
of Romania’s
Entrepreneurship
Culture
SpringerBriefs in Economics
More information about this series at http://www.springer.com/series/8876

Sebastian Văduva
From Corruption to Modernity

The Evolution of Romania’s
Entrepreneurship Culture
Sebastian Văduva
Griffiths School of Management
Emanuel University of Oradea
Oradea, Romania
ISSN 2191-5504 ISSN 2191-5512 (electronic)

SpringerBriefs in Economics
ISBN 978-3-319-26996-2 ISBN 978-3-319-26997-9 (eBook)
DOI 10.1007/978-3-319-26997-9
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Preface
The concept of the “business civil society” outlined in this volume, an outgrowth of
the traditional civil society, itself an old, yet misunderstood and underutilized con-
cept, is an attempt to provide a neutral, voluntary, and contingent space where pub-
lic politicians, administrators, theoreticians, et al., can meet and dialogue with their
counterparts from the private sector. The nations of Europe, including Romania,
have different civil traditions varying in their intensity, cultural heritage, scope of
activity, religious or nonreligious affiliation, etc., to the point that the civil society
means different things for different people. Western Europe has experienced over a
century of modern government involvement crowding out the efforts of traditional
civil society; while Romania, along with the other Eastern nations of the former
Soviet bloc, experienced almost a half-century of systematic efforts by communist
regimes to eradicate and control all spheres of voluntary, nongovernmental civil life.
To make matters worse, the inexperience and immaturity of Romanian society in the
early transition period after communism, particularly its so-called entrepreneurial
class, have discredited and abused the concept of civil society, utilizing it solely for
tax benefits and selfish purposes. Nevertheless, I hope my work will provide a hum-
ble impetus to both business and public administrators in both Romania and the
European Union to consider this complementary alternative to future public admin-
istration reforms. I believe that our historical global context expects fresh and inno-
vative ideological paradigms from both the public and the private sector.
In 2010, while writing on my dissertation, I outlined three historical realities that
comprise the era of globalization and why both business and public administration
communities ought to change their adversarial paradigms and find common solu-
tions instead of finding flaws with the other: (1) rapid technological transformation,
(2) the interconnectivity of the capital markets, and (3) competition from develop-
ing nations with massive populations such as China and India. Since then, I must
add two other realities that have taken place and will probably have substantial
historical implications for Romania and the European Union: (4) the “Arab Spring”
political revolutions potentially causing vast population migration toward the
European Union and placing an immense strain on the public treasury with possible
social unrest and native retaliation, and (5) the possible collapse of the Euro and/or
v
vi Preface
the loss of national sovereignty. I hope these, along with other historical and global
realities, will provide sufficient motivation for Romanian and European public
administrators and business owners to search for solutions that are “out of the box”
of traditional thinking and finger-pointing.
The business civil society is built on the traditional, value-based concepts of
early Western European nations, yet it takes into account the realities and pressures
of globalization. In these challenging times, practitioners and theoreticians alike
from multiple disciplines and various nations owe it to their societies to engage in
honest and professional dialogue and explore nonlinear and nontraditional solu-
tions. I trust the current volume will be a small contribution to the ongoing dia-
logue among political scientists, public administrators, business leaders, and the
civil society.
I state the hypothesis that there are no inherently rich or poor nations; instead
there are well-managed, prosperous nations and poorly-managed, impoverished
ones. This builds upon Michael Porter’s (1990) and Hernando de Soto’s (2000)
claim that governments have an absolute determinant role on the quality of life of
their citizens. This has always been true, yet I will argue that in the current era of
globalization, international competition has increased, placing unusually high
demands on national public administrators not only to perform routine tasks associ-
ated with their office, but increasingly to generate prosperity and well-being for
their citizens. Globalization, with its three major pillars of technology, international
and unrestricted finance, and demography, is changing the governance paradigms
we have inherited from the nineteenth and the twentieth centuries with worrisome
speed. The traditional passive and reactionary role of public administration is being
altered to include proactive and anticipatory measures. The traditional levers of
power are also being transformed. Where in the past public administrators reacted
primarily to their political masters, in the global era they are increasingly sensitive
to faceless financial markets, rating agencies, international media conglomerates,
and increasingly technology-enhanced micro-corporations. In these first sections I
will broadly outline the global issues facing public administration reformers the
world over, along with some of the globalization forces that are dictating a different
reform paradigm. Even if this volume focuses mainly on Romania, it behooves us
to understand what pressures mold our new world.
This global, macroeconomic reality manifests itself in the perception of
Romanian society through the process of Europeanization; therefore, I will suc-
cinctly outline the literature on the European Union along with its theoretical under-
pinnings, history, identity, integration impetus, and administrative/legal structure.
For an in-depth analysis on the European Union in the Romanian language, I fol-
lowed in the footsteps of Iordan Gheorghe Bărbulescu and his school of thought,
utilizing his numerous and insightful works on the subject. The European Union is
a dynamic and robust political and social construct that is too large for one volume
to contain. I am afraid my work will not do it sufficient justice and I would like to
apologize in advance; any shortcomings and omissions are entirely my own. In the
past few years, any committed and passionate student of the European Union has
been witnessing events that are both challenging and exhilarating. The academic
Preface vii
future of European Union studies will be ripe with opportunity for analyses and
interpretations and I trust that the experts from both Romania and the rest of the
Union will continue to provide us with astute elucidation.
I will then contextualize the discussion of globalization and Europeanization and
refer to the nation of Romania, which is the focus of my research. Again, I will not
go into all the exhaustive details of the current Romanian public administration with
its two decades of reforms, since many significant scholarly works have already
been written on this subject. I will mainly focus on the historical legacies and the
major legal and political transformations that took place after the fall of the com-
munist regime. Valuable work of my Romanian colleagues has permitted me to also
briefly focus on the reforms and alterations affected by European integration along
with the instruments utilized in the Europeanization process.1
In the opinion of this author, although the Europeanization efforts of both the
European Union and the Romanian reformers have been commendable, they have
also been both hypocritical and insufficient. Further, I will address what is consid-
ered the greatest challenge to Romanian public administration and to Romania’s
place in the world: corruption and a lack of healthy leadership. Once again, the limi-
tations imposed by the time and the space of my research did not permit me to
adequately discuss this subject; therefore, the works of other experts on this subject
ought to be explored. My primary research contribution has been a study on
Romanian business leadership, who are the target group that my work is attempting
to mobilize and engage in the current public administration reform discussion.
Given the speed of communication and the interconnectivity of the world, both busi-
ness and government leaders have a real incentive to reduce corruption and increase
transparency. Through various “corporate social responsibility” (CSR) initiatives,
the globalization of the NGO sector, and anticorruption priorities for local and
national government, there are numerous studies that correlate low levels of corrup-
tion with long-term, sustainable prosperity.
Although fully integrated into the European Union and the global community,
Romania’s reform initiatives on corruption eradication, and, more importantly, eco-
nomic prosperity, are not over. To complicate matters, the global continuous change
and hyper-turbulence identified and outlined previously are even more pronounced
in public administration. The European Union, portrayed as a beacon of stability,
prosperity, and civilization, seems to be shaking to its core. I will return to the theo-
retical and ideological instruments of public administration reforms of New Public
Management (NPM), Neo-Weberianism, and Digital Government. As valuable
instruments for future public administration reforms, they necessitate in-depth
understanding and masterful utilization; therefore I will outline their history, their
context, and ideological underpinnings. These three tools, especially Digital
Government, must be properly utilized by Romanian public administrators and the
1
I would like to mention Adrian Miroiu, Iordan Gheorghe Bărbulescu, Mihai Păunescu, S‚erban
Cerkez, Mirela State-Cerkez, Radu Nicolae, Florin Bondar, Ana-Raluca Alecu, Radu Coms‚a,
Lucian Ciolan, Andrei Trandafira, Bogdan Lazarescu, and Andrei Miroiu, whose research has pro-
vided me invaluable information and guidance.
viii Preface
Romanian population at large. Public administrators must strike a right balance so

that the benefits of each ideological tool may be maximized, while its negatives
neutralized. However, based upon historical observation and world-wide research,
neither New Public Management, nor Neo-/Traditional Weberianism, nor Digital
Government can function without an adequate cultural construct. Unfortunately,
most public administration reform initiatives ignore this reality, downplay its impor-
tance, or do not think that culture creation and nurturing is their responsibility. This
is why I propose the consideration of a fourth reform ideology, Civil Society, which
is both complementary and foundational to the above-mentioned three.
Eventually, I will proceed on a transdisciplinary and complementary approach to
public administration reform by discussing the concept of a modern Business Civil
Society in Romania. I begin with an attempt to explain the concept of traditional
civil society, a concept minimized by the advent of the modern state in the late nine-
teenth century, and sometimes misused in the public discourse. Traditionally, the
Civil Society complemented and enhanced public governance, as it was the “third
sector” providing a neutral, voluntary interface between government and business.
Historically, it held three main responsibilities: (1) generate appropriate national
culture, (2) hold government accountable, and (3) supplement the government’s
activity, when needed.
The timing of this initiative is most appropriate since the private business sector
is recognizing its duty and, through corporate social responsibility (CSR), it is will-
ing to contribute to the improvement in social conditions. Therefore, Romanian and
European Union political and administrative leaders ought to take concrete steps in
revitalizing this most important and all-benefiting space. Perhaps this can be a long-
term public-private partnership of educating the general public as to the benefits of
having a healthy, functioning, and objective civil society. The instruments and para-
digms that produced the European experiment and modern prosperity are limited in
their reach, especially under the pressures of new technological, financial, and
demographic realities. It is my argument that both the public and the private sectors
have to find innovative methods to complement and aid each other, otherwise both
will sink under the weight of their own selfish demands.
Methodology
This work utilizes a theoretical approach, by presenting various theories of public

administration, public policy, globalization, governance, Europeanization, govern-
ment reform, corruption, culture, economic development, civil society, and corporate
social responsibility. In most cases I begin with a general, macro perspective and move
to particular, locally contextualized realities. I will utilize primary date studies, journal
articles published in prestigious journals, and international electronic databases, as
well as seminal books published by reputable publishing houses. Invariably, my
research will move back and forth over the course of the past century on selective
specialty literature published mainly in English and Romanian, giving it also a
Preface ix
historical perspective. In 2011, along with a group of young researchers at the

Griffiths School of Management, we conducted a survey of 145 top Romanian leaders
and institutions on a broad range of topics giving this research a primary data dimen-
sion. This survey was conducted online using advanced and efficient survey instru-
ments (Qualtrix), obtaining data from top Romanian leaders and their organizations.
The results will be presented along with interpretations and explanations.
However, I believe the greatest contribution of my research is its transdisci-
plinary nature. Considering the pressures that global finance and economics are
exercising upon public administration, and the fact that budgetary austerity is
becoming the new norm for most public treasuries, perhaps nontraditional fields
need to be explored for possible solutions. I argue that cultural and religious studies
could offer a complementary perspective and reform instruments to the traditional
public administration and public policy. My hypothesis is that voluntary cultural
and religious initiatives could: (a) reduce the budgetary burden on government bud-
gets, especially in the area of social services; (b) decrease waste and inefficiency of
current government structures through objective and transparent accountability, and
(c) rekindle a healthy entrepreneurial spirit that will create societal prosperity. The
space that should be explored, and in some instances created, is what I refer to as the
business civil society, envisioned as a neutral, transdisciplinary, and mutually ben-
eficial space. Public administrators and private businesses alike are the beneficiaries
of economically virtuous cultures, and by the same token they are negatively
affected by a culture where corruption and inefficiencies are the norm rather than
the exception. By bringing a cultural and implicitly a religious perspective into the
field of public administration and economics, I hope to enlarge the scope of the cur-
rent dialogue and render some transdisciplinary alternatives.
Oradea, Romania Sebastian Văduva

Contents
1 Corruption, the Unfinished Business of Europeanization

in Romania................................................................................................. 1
1.1 Corruption: Theories and Realities .................................................... 4
1.1.1 The General Causes and Forms of Corruption ...................... 6
1.1.2 Cultural Values that Ascertain Corruption ............................. 8
1.2 Corruption in Romania: General Concepts and
Poignant Examples............................................................................. 10
1.3 Corruption Studies and Surveys in Romania and the Region ............ 14
References ................................................................................................... 24
2 The Future of Public Administration Reform in Romania ................... 27
2.1 Cultural Considerations for Public Administration Reforms
in Romania ......................................................................................... 28
2.1.1 Romania’s Lack of Administrative Tradition......................... 29
2.1.2 The Inconsistency Between Ideas and Practice ..................... 29
2.1.3 Unhealthy Reliance on International Pressures ..................... 30
2.1.4 The Negative Perception Regarding a Strong State ............... 31
2.1.5 The Necessity of Stable and Healthy Regulations ................. 31
2.1.6 The Absence of a Private Sector ............................................ 33
2.1.7 The Fragmented and Competing Nature
of Public Administration in Romania .................................... 34
2.1.8 Technocracy May Stifle Democracy ...................................... 35
2.2 New Public Management ................................................................... 37
2.2.1 The Historical Basis of NPM ................................................. 38
2.2.2 Public Choice Theory............................................................. 40
2.2.3 Policy Analysis and Public Management............................... 41
2.2.4 The Shortcomings of NPM .................................................... 43
2.3 Neo-Weberianism and the Revival of Classical Bureaucracy ........... 46
2.4 Digital Government (e-Government) ................................................. 50
xi
xii Contents
2.5 The Limitations of Current Reform Initiatives .................................. 56

2.5.1 Bureaucratic Efficiency that May Suffocate Democracy....... 57
2.5.2 The Objectionable Connection Between Politics
and Bureaucracy..................................................................... 60
References ................................................................................................... 64
3 The Business Civil Society and its Impact
on Romanian Public Administration....................................................... 71
3.1 Modern Challenges to Government Reforms .................................... 74
3.1.1 The Aspirations of Future Government Reforms................... 77
3.1.2 The Hindrances to Modern Government Reforms................. 79
3.1.3 The Appeal and Importance of Entrepreneurial
Government............................................................................ 84
3.2 Culture, Social Trust, and Entrepreneurship ...................................... 86
3.2.1 National Culture and Its Impact on Entrepreneurship ........... 88
3.3 Civil Society: The Generator of National Culture ............................. 90
3.3.1 General Concepts on the Civil Society .................................. 91
3.3.2 Religion as the Underpinning Of Civil Society ..................... 93
3.3.3 The Civil Society as a Government Counterbalance ............. 97
3.4 The Business Civil Society and the Creation
of an Entrepreneurial Ecosystem ....................................................... 103
3.4.1 The Creation of an Entrepreneurial Ecosystem ..................... 105
3.4.2 Corporate Social Responsibility ............................................ 107
3.4.3 The Romanian Business Civil Society and Its Benefits ......... 114
3.5 Limitations and Future Research ....................................................... 118
References ................................................................................................... 119
Appendix .......................................................................................................... 127
Further Reading .............................................................................................. 134

List of Figures
Fig. 1.1 What do you consider as the major obstacles of 2012 ..................... 20
Fig. 1.2 What impact will the following political factors have
on your company? ............................................................................ 20
Fig. 1.3 What impact will the following economic factors have
on your company? ............................................................................ 21
Fig. 1.4 What impact will the following social factors have
on your company? ............................................................................ 22
Fig. 1.5 Risk—Opportunity perception ......................................................... 22
xiii
List of Tables
Table 1.1 How do you appreciate the level of corruption

in the following sectors?................................................................ 18
Table 1.2 Corruption by public administration sectors ................................. 18
Table 1.3 The causes of corruption in Romania ............................................ 18
Table 2.1 The undisputed characteristics of the NPM................................... 39
Table 2.2 The generally accepted characteristics
of the NPM .................................................................................... 39
Table 3.1 Characteristics of the instrumental and the new political
approach to CSR ............................................................................ 112
xv
Chapter 1
Corruption, the Unfinished Business
of Europeanization in Romania
I shall begin this chapter with a brief analysis of corruption along with some general
considerations that must be taken into account for future reform initiatives. This
analysis was excellently done by Lucica Matei in her 2010 book, Public
Administration in the Balkans—from Weberian bureaucracy to New Public
Management. My analysis was also aided by the 2009 thesis, Corruption, an insti-
tutional approach. For an excellent and profound understanding along with case
studies and examples, I highly recommend the above-mentioned works. Many
authors and international publications point to the fact that Romania is one of the
laggards in corruption reform in Europe (Frederick, 2008; Interior Minister Report,
2007; Lăzărescu, 2007; Negrescu, 1999; Pasti, 2004, 2006; Precupeţu, 2007; Ristei,
2010; Vachudova, 2009). The World Bank data, comparing Romania with its Central
and Eastern European counterparts, ranks it at the bottom in all indicators, espe-
cially “Rule of Law” and “Control of Corruption” (World Bank & Kaufmann
Report, 2006). Even if anticorruption initiatives have had a positive and significant
impact, corruption still persists in the Romanian society in general and its public
administration in particular.
Corruption research, an important area of modern public administration, mea-
sures the negative impact corruption has upon the economic and social ecosystem
of a country or a region and attempts to identify the causes and its perpetuation
within that system. Most corruption research identifies the causes that bring corrup-
tion into the system, and they typically fall into one of the following four
categories:
• Political and judicial (Leite & Weidmann, 1999).
• Historical and cultural (La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1999;
Treisman, 2000).
• Economic and poverty (Dreher, 2003; Treisman, 2000; Wei, 2001).
• Public sector size and employees compensations (Otahal, 2007; Tanzi, 1998;
Treisman, 2000; Van Rijckeghem & Weder, 1997).
© The Author(s) 2016 1

S. Văduva, From Corruption to Modernity, SpringerBriefs in Economics,
DOI 10.1007/978-3-319-26997-9_1
2 1 Corruption, the Unfinished Business of Europeanization in Romania
Generally speaking, corruption is caused by the selfish nature of people exhibited

through excessive and misguided government regulations as well as the government
participation in the economy. The most common form of corruption is “conflict of
interests,” where politicians and/or public administrators engage in private dealings
with the government—directly or indirectly—and charge inflated rates for govern-
ment contracts, in a sense siphoning money out of the public treasury. The level of
corruption existent within a system is determined by the national culture, the overall
quality of the political system, the institutions that are entrusted to fight corruption,
the quality of the democratic system, the political party system, the public adminis-
trative system, and the level of decentralization. The obvious problem in attempting
to analyze corruption is the limited and the unreliable nature of the data, therefore
the instrument chosen to study corruption is of utmost importance. The traditional
instruments utilized in evaluating national levels of corruption are:
• The International Country Risk Guide.
• The Corruption Perception Index published annually by Transparency
International.
• The Corruption Control (Kaufmann, Kraay, & Mastruzzi, 2003).
The phenomenon of corruption is not new and is not limited to Romania; gov-
ernments worldwide and throughout history fought corruption given its negative
impact on efficiency and prosperity. Corruption prevents the production of eco-
nomic resources, instead facilitating their transfer through rent-seeking bureaucrats
from the state to selective private ownership. In the long-run it has the effect of
de-motivating people from working hard, investing, innovating, and saving.
Corruption further generates government illegitimacy, since citizens lose trust in
governmental officials and the civil servants hired to serve them. Romania, with a
tradition of corrupt administration dating back to the sixteenth and seventeenth
century, required special attention from the European Union who made curbing
corruption a top priority, given the interconnectivity of member states. In the case
of Romania and Bulgaria, the two latest integrated members, organized crime, traf-
ficking, and corrupt government contracts among other issues has been signaled out
as major issues.
Upon Romanian’s accession into the European Union, certain systemic weak-
nesses were signaled in the area of justice reform and the fight against corruption
that could prevent the implementation of the European Legal space and preclude
Romania from enjoying the full rights of a European member. Therefore, the
Commission took upon itself the obligation to periodically issue cooperation and
verification mechanism reports to assist Romania in its integration process and
benchmark the progress made in the fight against corruption. The benchmarks that
were agreed upon are interlinked and are part of a broader reform of the judicial
system, necessitating political commitment and will. These benchmarks were:
1. Ensure a more transparent and efficient judicial process notably by enhancing
the capacity and accountability of the Superior Council of Magistracy. Report
and monitor the impact of the new civil and penal procedure codes.
1 Corruption, the Unfinished Business of Europeanization in Romania 3
2. Establish, as foreseen, an integrity agency with responsibilities for verifying

assets, incompatibilities, and potential conflicts of interest and for issuing man-
datory decisions on the basis of which sanctions can be taken.
3. Building on progress already made, continue to conduct professional, non-
partisan investigations into allegations of high-level corruption.
4. Take further measures to prevent and fight against corruption, in particular within
the local government (European Commission Integration Report, 2006).
The July 20th, 2010 European Commission assessment report notes that some
public administration areas remain a challenge in Romania, particularly the fight
against corruption. The report suggests that Romania needs to take urgent action in
order to speed up the high-level corruption trials that are already on the roll and
prevent the expiration of their statute of limitations. The fight against corruption
should be a top priority for the Romanian political class and urgent measures need
to be taken to improve the recovery of proceeds from crime, the pursuit of money
laundry, and the protection against conflict of interest in the management of public
funds. Better results should be demonstrated through the confiscation of unjustified
assets and delivering of sanctions of incompatibility.
The Economist in its December 11th 2010 article, Holes and Corners—
Disappointing Romania, states that after wasting time and cash in the period that led
up to 2009, Romania is finally attempting to cope with its daunting problems. The
biggest problem, according to the article, is the terrible state of the economy. After
joining the European Union in 2007, Romania enjoyed an average annual growth
rate of around 8 %, yet instead of acting prudently, the Romanian political class
deliberately ran a budget deficit. In 2009 it was forced to seek a 20 billion euro
bailout loan from the IMF with the only positive being the restrictions placed upon
politicians in further spending public money. Upon integration, the European Union
designated approximately 30 billion euros for modernizing and integrating Romania,
unfortunately only about 1.5 billion had been absorbed so far. “…On paper, its
reform program looks impressive, if belated. But many doubt if it can cure the
perennial ills of corruption, bad bureaucracy and poor public services.” The article
concludes that Romania is actively seeking foreign direct investment (FDI), but the
large-scale deregulation often promised is seldom delivered. There are significant
problems with ignorant and incompetent judges and the laws that are increasingly
European on paper, but quite Balkan and unpredictable in practice. Foreign inves-
tors who may consider Romania as an appropriate market for investment are deterred
by the unpredictability of the decision-making process that typifies Romanian pub-
lic administrators and its political class.
The Financial Times article, How the EU let Romania Off, published on July 21,
2008 quoted Tom Gallagher in explaining how the Romanian government “has
launched numerous action plans and other reform rituals which were essentially just
public relations gimmicks in order to satisfy Eurocrats that Romania was busy inter-
nalizing European norms and values." The article argues that the Romanian govern-
ment just put on a reformist facade until it joined the European Union, and
immediately after integration returned to their old, corrupt, and culturally accepted
ways. Regardless of political party, the Romanian political elites seemed to have
focused on amassing wealth for themselves and their cronies through awarding
lucrative government contracts to well-connected European companies that would
keep the Commission happy. The EU may pride itself on being a progressive, non-
corruptible entity capable of projecting eastwards the values and institutions essen-
tial for good governance and economic success, but the reality in Romania seem to
show a slightly different picture, with corruption remaining rather entrenched and
efforts to curtail it being blocked at the highest of levels.
1.1 Corruption: Theories and Realities
John Rawls in his book, A Theory of Justice, approaches the subject of corruption
from a justice perspective. According to him, the principles of social justice regulate
the distribution of rights and duties inside the social institutions and determine the
correct distribution of benefits and responsibilities of social life. He makes a clear
distinction between social rights principles as they apply to institutions and to indi-
viduals (Rawls, 1971, p. 54). Institutions are public system of rules which define
functions and positions along with rights and obligations, powers, and immunities.
Paramount for institutions to function, there needs to be a common understanding
of the institutional rules by all members of the community while their public affir-
mation and practice is an essential condition for justice. Institutional rules approve
or reject certain behaviors, with direct or indirect punishments from the community;
therefore a rational individual can be coordinated toward the best level of social
justice. It is possible however that rules of an institution be constructed contrary to
the general interests of rational individuals or other institutions within the same
system. There is a clear distinction between rules, institutions, and the base struc-
ture of the social system. A certain rule may be unjust, while the institution may not;
or an institution may be unjust, while the social system as a whole may not.
According to Rawls, it is entirely possible that inside an institution or a social sys-
tem, seemingly unjust rules and behaviors compensate for one another.
The concept of formal justice refers to the impartial and consistent administra-
tion of justice regardless of the main principles of an institution. Equality implies
impartial and objective (just) applicability of law to all individuals and institutions
under a certain jurisdiction. As long as the process is carried out correctly, the law
itself may be unjust and the correct process will correct the law itself over time
(Rawls, 1971). According to Rawls, there are two general principles of justice:
1. Individuals should have the greatest degree of freedom possible in comparison
with their peers.
2. Social and economic inequalities are justified when: (a) the opportunity is avail-
able to everyone, regardless of their social standing and (b) the greater good for
the disadvantaged members of a society is pursued.
1.1 Corruption: Theories and Realities 5
These principles apply mainly to social institutions; therefore corruption within

an institutional system can affect the credibility of the institution and its applicabil-
ity justice. If social institutions are unjust and they are further built and maintained
through the exercise of power, it will transform the whole system into a corrupt
system.
Denis Thompson in his 1993 article, Mediated Corruption: The Case of the
Keating Five, defines corruption as a situation in which the private interests distort
the public objectives using government influence without the approval of demo-
cratic process. He gives three general principles upon which to judge if a society, an
institution, or individual behavior is corrupt or not, and/or the level of corruption:
generality, autonomy, and transparency. Generality assumes the lack of discrimina-
tion regardless of wealth, race, origin or sex; autonomy refers to behavior and treat-
ment based on objective, relevant merits; and transparency assumes that all behavior
can be publicly justified. Naturally, his and many other corruption theories are lim-
ited in their applicability given the different geography, culture, and historical
context.
Francis Fukuyama in his 1995 book, Trust: The Social Virtues and the Creation
of Prosperity, states that societies that are based on universalism or stable rules have
individuals engaged in collective behavior on the basis of reciprocal trust and honest
behavior toward each other. This instills in the individual the notion that as a general
rule they will not be treated differently, regardless of their network or connections.
This generates “positive social capital,” and ultimately trust in the state, its laws,
and institutions arises when “a community shares a set of moral values in such a
way as to create regular expectations of regular and honest behavior” (Fukuyama,
1995, p. 83). This positive social capital facilitates civic and business relations,
reduces costs generated by secrecy and lack of confidence, and is closely associated
with societies that have a high degree of development (Putnam, 1993).
Mancur Olson in his 1965 book, The Logic of Collective Action, underlines the
fact that corruption is commonly defined differently by different cultural contexts,
especially in undeveloped societies. Western bureaucrats commonly define corrup-
tion as the use of an objective and legitimate public position to seek personal gain;
but the underlying assumption is that there is an objective and legitimate public
sector operating in a fair and non-discriminatory manner. This is certainly not the
case in all areas of Romanian government, especially in the rural areas outside the
major cities. In such areas the community never achieved the status of a full, modern
society and local governance never reached the impartiality, impersonality, and fair-
ness that is characteristic of modern bureaucracies. In many of these areas, western
notions of corruption are considered normal and manifest themselves not only by
the use of public positions for personal and network gains, but more broadly as the
widespread infringement on the norms of impersonality and fairness. This kind of
discriminatory public service is not only prompted by the wish to have personal
financial gains, but it seems to be the standard in societies dominated by groups of
unequal power. Favors are granted to acknowledge or establish status, often without
money even being involved to prove that influence is the main currency, not cash.
Douglas North, the modern father of “institutionalism” broadly defines institutions

as “the rules of the game” in a society (North, 1990). Societies the world over oper-
ate with both formal and informal institutional systems that in theory ought to
contribute, complement, and mutually support each other. Institutions ought to have
a stabilizing social role as they prescribe and reward desirable behavior and punish
undesirable behavior (Offe, 1996). This is important for public policy since institu-
tional rules provide decision makers with both the formal and informal instruments
that shape strategy and ensure goals achievement (March & Olsen, 1984). The for-
mal rules can be quickly adopted through new laws and public institutions, yet they
do not exist in a vacuum. They are adopted in a certain environment that requires
understanding and insight of its culture, history, and traditions. Otherwise, once the
gap between formal and informal rules is too wide, the government risks undermin-
ing its own legitimacy (Gelman, 2001). Formal, predictable, and universally appli-
cable rules generate governmental legitimacy, while subjective, unpredictable, and
particular rules build upon strong, charismatic leadership and lead to instability and
often-times illegitimacy. Joel Migdal, in his 1998 book, Post-Socialist Pathways:
Transforming Property and Politics in Central and Eastern Europe, point to the fact
that in Romania, as in other nations in the region, the prevalence of informal institu-
tions prevents formal institutions from really operating. The state tends to be weaker
since the informal society is so strong. Naturally, a strong, bold informal society
will obstruct the development of formal institutions.
1.1.1 The General Causes and Forms of Corruption
Daniel Treisman in his 2000 article, The causes of corruption: a cross-national

study, evaluates some general concepts that may cause corruption. Naturally, his is
not an exhaustive list, but his research offers an excellent starting point along with
several general principles regarding corruption studies. In his study, he mainly ana-
lyzes the judicial system as compared to the perceived corruption level. He focuses
on the difference between the Anglo-Saxon judicial system based on common law
and judicial precedent, mainly espoused by a Parliament, and compares it to the
Continental-European legal system, based on the Roman code, with its comprehen-
sive laws, established in the past at the behest of various kings and monarchs. His
conclusions seem to support Rawls’ thesis that due-process is more important than
the intrinsic value of a law. The Anglo-Saxon system, based on strict procedures and
precedents, seems to protect itself better against corruption than the Continental-
European system based on hierarchy and submission. Based on his research, he
concludes that nations which practice “common law” have a lower level of corrup-
tion than nations which practice “continental law” (Treisman, 2000).
The second influencer of corruption is the political system type: open and demo-
cratic systems tend to be less corrupt than their authoritarian counterparts. In a
democratic system, individuals are allowed to express themselves freely while cor-
rupt officials are held accountable through elections and other juridical or political
mechanisms without needing to resort to violence (Treisman, 2000). In a democracy,

certain rights such as the freedom of speech, the freedom of the press, and the free-
dom of assembly are guaranteed, providing a better safeguard against corruption
and bad governance. Historically, authoritarian leaders and their entourage enriched
themselves through corruption and the assumption of public funds, while violently
silencing the opposition and crushing their critics.
A third influencer of corruption is the size and the type of government.
Conventional wisdom dictates that the larger the government, the more opportuni-
ties there are for corrupt practices and conflicts of interest. “Federal-type” govern-
ment is also perceived as being less corrupt than a “Unitarian-type” since it is
believed to stimulate a natural and healthy competition among various agencies and
regions. However, Treisman’s findings disprove this research and nuance the fact
that federal governments are perceived at least by the general public of being more
corrupt since each level of government has its own corruption opportunities.
A fourth influencer of corruption is the remuneration level of public administra-
tors and government officials. Conventional wisdom dictates that low-income levels
breed corruption, since a low-paid public servant not being able to survive on his/
her own salary will consider corruption as a viable alternative. In her 1999 book,
Corruption and Government: causes, consequences and reform, Susan Rose-
Ackerman points to the fact that in many countries the salaries of public servants
decreased compared to their private sector counterparts or their own past incomes.
However, Treisman (2000) findings seem to disprove this fact since he, along with
others, claims there is no correlation between salaries and the level of corruption in
a country (Van Rijckeghem & Weder, 1997; Swamy et al., 1999). Other authors
state that there is a negative connotation between corruption and job contests (Evans
& Rauch, 2000); that the establishment of evaluation metrics is difficult and subjec-
tive; and that competing with the private sector may lead to loss of talent.
A fifth influencer of corruption seems to be religion and culture since they influ-
ence the attitudes, behaviors, and the loyalties of individuals (Treisman, 2000). This
is a subject that I will address later at length, since my entire thesis rests on cultural
transformation initiative; however at this point I will just reiterate some of Treisman’s
(2000) findings. Some religions—like Islam, Roman Catholicism, and Eastern
Orthodoxy—tend to be hierarchical and place a great emphasis of obedience, while
others—like the Protestant faiths—tend to be more egalitarian and individualistic.
The first category tends to be associated with the state, relying on it for a financial
contribution, while the second type was born in “protest” against the state. Implicitly,
the Protestant faiths and the cultures they generate tend to be less corrupt than their
traditional counterparts for the following reasons:
1. Protestantism stimulates economic development and has a “built in” incentive to
reduce corruption and lower transaction costs.
2. Protestantism tolerates individual nonconformity and the challenging of author-
ity. Thus, protestant cultures tend to be more prone to identifying, confronting,
and punish abuses.
3. Protestant religion and cultures institutionalizes and articulates virtues and are
less tolerant to the lack of integrity and hypocrisy.
4. Protestantism favors and places responsibility on the individual personally
instead of the family or the clan. This makes Protestant societies more immune
to “immoral familiarism” or nepotism.
5. Being in a perpetual state of protest, Protestantism is financially separate from
the state, leading to a self-sufficient civil society which counterbalances the state.
1.1.2 Cultural Values that Ascertain Corruption
In addressing the issue of corruption we must eventually study culture and traditions
as well. There are states that seem to be inherently weak and operate in a hypocriti-
cal manner with everyday life significantly different from the political rhetoric or
the legislated intent. Historically speaking, in Romania and other parts of the region,
externally and speedily induced modernization efforts often are just simulated acts
against the background of historical structures and informal communities.
Governments may pretend to govern and citizens may pretend to follow, but an
informal economy thrives, taxes are left uncollected, policies are seldom imple-
mented, and an informal setting is relied on for daily activities. Nations with such a
culture seem to resist any type of modernization initiatives despite public pledges
and public cries of corruption and inefficiency. Such nations have difficulties devel-
oping modern bureaucracies and turning their people into upright citizens who
instead remain dependent on informal local power brokers. Their political systems
often remain confined to networks of clients that are not open to the entire society.
“Predatory elites” often control their economies and use the majority of the public
resources to enrich themselves while generating massive poverty for the rest of the
society. There are public appearances of democracy and free market liberalism but
they exist merely on paper for the most part without having any kind of real struc-
tures or impact (O’Donnell, 1999).
In a sense there seems to be two facets to the national culture in Eastern Europe
and the Balkans: an official, public, modern aspect that gives the impression of a
fully integrated European nation and an unofficial, behind-the-scenes, informal
aspect that resembles the corrupt ways of empires past. These two competing reali-
ties can be easier understood by utilizing Douglas North’s (2009) “universalistic”
vs. “particularistic” cultures framework. The extremes are seldom achieved and all
societies have components of both, yet we can divide cultures and societies in their
tendency to embrace one direction or the other. Ken Jowitt, in his 1993 book, New
World Disorder or the Leninist Extinction, describes Eastern Europe and the post-
communist world as containing significant elements of the above-mentioned charac-
teristics. These corrupt, hypocritical yet functional models are present in Romania
and the former Soviet world, in stark opposition to the western understanding of
universality-applied administrative principles. Those models in communist cultures
are not universal in nature, rather particular and focused on the individual and the
specific situation. “Particularism is usually described as a mentality prevailing in

collectivistic societies in which the standards for the way a person should be treated
depend on the group to which the person belongs” (Jowitt, 1993, p. 137). Universalism
is a practice of individualistic western societies where equal treatment applies to
everyone regardless of their affiliation. In universal societies, the rules are the same
for everyone; particular societies require local knowledge and context and have a
difficult time implementing universalism and non-discriminatory “rule of law.”
The European concept of the preeminence of the “rule of law” as a vital precon-
dition for a market economy and a democratic political system, necessitates a domi-
nance of formal institutions predicated upon universal rules or norms that constrains
and treats all participants within a society equally. It is difficult for the rule of law to
coexist with “particularism” and informal behavior. In particularism societies, indi-
viduals are treated unequally and according to their position within the society and
the various informal networks. Each member of the society is evaluated according
to their status, or the distance they have from the group that is holding power, which
is typically built on charismatic, subjective authority. Their access to public goods
is disproportionally large in contrast to the ones that do not belong to the network or
are further away from the center of power. This uneven distribution and subjective
network structure is accepted by the Romanian society, and individuals strive to
become part of the network rather than change the particular rules. As a response to
this type of culture and practices of subjective privileges, Max Weber designed his
modern bureaucratic apparatus in the previous century. The appropriation of oppor-
tunities for domination, power and control, tends to result in the formal and visible
group status that utilizes its position as a source of income for its members. “Hence,
a status society always creates the elimination of individuals’ free choice and hin-
ders the formation of a free market economy” (Weber, 1968).
To prove how difficult is to change this deeply engrained custom of corruption
and particular treatment of individuals based upon their network, we only have to
look at the astonishing efforts communism made to bring uniformity to Romania.
How come communism failed to bring universalism with all its effort and noble
modernization goals? In fairness, the communist regime did have some achieve-
ments in the process of building a bureaucracy and delivering some public goods
such as cheap housing and rudimentary infrastructure, and for a time it even enjoyed
a comfortable degree of legitimacy. However, all modernization efforts were sub-
verted by the contradiction between the legal and visible power structure, and the
particularities of status group that enjoyed political and economic monopolies.
Universalism was impossible when the access to power was by its design so uneven.
Evidence from various studies in the former Soviet world shows that the uneven
distribution of power according to status was the norm rather than exception (Jowitt,
1992). Communism created special plutocracies, as power was the main instrument
of allocating social rewards and political office was closely intertwined with the
social status generating what Andrew Janos called the “modern version of the old
tables of rank” (Janos, 2000). Since private wealth, property, or other forms of
social stratification were outlawed by the communist regime, status was the main
provider of social hierarchies.
In particularistic societies such as Romania, where modernization has never

taken place and the government has remained traditionally in the hands of privi-
leged groups, the term “corruption” is misleading as it suggests a completely differ-
ent stage of evolution. Therefore, looking for solutions in the anticorruption arsenal
of western democracies is highly inappropriate, while the solution to building a
modern, fair, and bureaucratic state cannot be found in any policy books of the
International Monetary Fund or the European Union and cannot be implemented by
the current political and administrative class, who are exactly the ones who stand to
lose the most if the system were to ever change.
The clash between externally imposed modernization efforts and long-held cul-
tural traditions are not a new phenomenon in Romania. Historically, Romanian con-
servatives believed that just simulating adoption of western institutions and legal
systems will not make the state more modern, merely weaker. As the historian
Nicolae Iorga stated about the first wave of Europeanization in the late 1920s:
Let it be a lesson to all reformers of today and tomorrow… to all those who come to the
government with pockets full of bills which get passed but are never applied, because the
poor nation lives much better on its customs than on all the laws; it turns a good law into a
custom, leaving aside the bad ones. (Iorga, 1927, 1992).
Europeanization is a specific modernization process, predicated upon the adop-

tion of formal rules and institution that are foreign to Romanian’s tradition of gov-
ernment. In their implementation process, we find significant tension between these
newly adopted and externally imposed laws and institutions, and the old traditions,
norms, and mores of the Romanian society. This dichotomy between formal and
informal institutions has significant implications for the debate on the process of
global modernization.
1.2 Corruption in Romania: General Concepts and Poignant

Examples
Culturally, historically, and geographically, Romania has been an idyllic location

for a particular culture and a status society given its Ottoman heritage and commu-
nist influence. Positive social trust is much desired by the Romanian government
and general public since it generates economic development and a higher standard
of living. The major strategic blunder of the past two decades was the erroneous
belief on the part of the Romanian elites and European modernizers who did very
little to improve Romania’s particularistic culture, and instead focused on the visi-
ble adoption of European laws and modern institutions. “Positive social trust” is
strongly predicated upon “interpersonal trust” and does not support the main stream
“social capital theory” built on Putnam’s grass-roots model (Putnam, 1993). Instead,
it tends to support a “top-down” model posited by Rafael La Porta in his 1996 arti-
cle, Trust in Large Organizations.
1.2 Corruption in Romania: General Concepts and Poignant Examples 11
According to Radu Nicolae’s (2010) book, Corruptions and Anticorruption

policies, the institutional space in post-communist Romania is very dynamic with
new situations, new resources, and an increased complexity of social areas along
with an ever-forming legal framework responding to external influences and
pressures. The institutions in Romania chaotically developed through “path-
dependency” while individuals learned to adapt to the new conditions:
The lack of compatibility between the two types of institutions—formal and informal—
leads to alteration in both, until an equilibrium is reached, where over time the initial change
does not seem as revolutionary as perceived in the beginning (Pop, 2006, p. 66).
The current informal environment is a continuation of the communist informal

one, where the only possible path toward wealth and power was a movement through
the bureaucratic structure of the party and state. In the post-communist environ-
ment, corruption seems to be the shortest path toward wealth and power, while the
type of corruption one engages in depends on the institutional context, the type of
resources that are valued by society, the values held by society and individuals, and
the perceived benefits and risks associated with the acts of corruption.
Radu Nicolae and his colleagues undertook a qualitative study at the Romanian
Juridical Resources Center in the cities of Bacău, Cluj, Galaţi, and Târgu Jiu, in
November 2005. The participants were public servants and business people, and the
study was carried out utilizing focus-groups and semi-structured interviews. Even if
the information is somewhat antiquated, the general values regarding corruption in
Romania still persists as the general reports and articles presented. Corruption
seems to be acceptable societal behavior, even if forbidden by formal rules. For
instance, a participant at an interview organized by Grødeland (2007) exemplifies
the general rule of disregard toward public property: “people feel they don’t commit
a crime if they don’t respect the public property.” The same phenomenon of accept-
ing corruption can be observed when individuals offer gifts to public servants with
whom they have never interacted in the past, and with whom, very probably, will
never interact in the future. The small gifts, or “small attentions,” are most often
exonerated in the perception of public servants and businessmen in Romania since
they are not considered acts of corruption; they are simply acts intended to win the
favor of a bureaucrat. This Romanian mentality showcases the “particularism”
regarding public positions or public services: personalized relationships are more
valuable and reliable than formal, unreliable, ever-changing rules.
In the absence of reliable and universally applied rules, public servants are per-
ceived as the absolute despot, capricious in his/her decisions, whose favor must be
quickly earned using a submissive attitude, gratitude, and gifts. The bureaucrat–citi-
zen relationship is characterized by power; therefore “small attentions” are given to
confirm the superiority of the bureaucrat. Citizens tend to trust that which they can
influence through informal mechanisms; a common saying during communist times
(which rhymes in Romanian) is that “a properly placed acquaintance in communism
is more valuable than a large estate in capitalism.” When asked about gifts as acts of
corruption, a civil servant from Cluj stated: “small attentions? … I really don’t
know! A chocolate, a coffee? I do not consider these as acts of corruption! They are
just nice gestures in a civilized world!”
Ronald King in his 2003 survey, The rationalities of corruption: a focus group
study with middle-sized business firms, hesitates to consider “attentions” as either a
gift or a bribe, but rather in between. According to the answers provided by the
focus groups coordinated by Ronald King, “the attention” (the gift, the present) has
the following characteristics: it is non-pecuniary; it consists of giving things and
seldom of providing services; it has a small value; it is not asked for or promised in
an explicit way; it is offered when the client wishes to obtain something that legally
she or he should be able to get. In exchange for the “the attention,” the client obtains
benevolence and better treatment from the public servant.
People learn mental models that include corruption as answers to practical dilem-
mas and those models are in turn validated by experience. The institutional details
are important in explaining why and when individuals choose to engage in corrup-
tion. These mental models then transform themselves into beliefs and systems of
beliefs that guide individuals’ behavior. The 2004 report titled, Romanian Bribery.
What do Romanian think and say about the small scale corruption, underlines the
fact that:
those who state that they offered bribery, often mention the need to bribe as an engine of
their behavior, or they say that “otherwise they couldn’t fix the problem” (35%), or that they
offered bribe as a natural behavior, this is how “things are done” (19%), or “to appreciate
that my problem was solved”.[…] Analyzing the answers provided by the two questions
that measure the motivation of those who offered bribe, it results that 70% of instances the
norm of bribery is invoked (defined as “there was no other way”, “it is customary to do it”,
or “just to appreciate that my problem was solved”). For all the categories, more than half
of the bribery-givers state as a reason for doing so the normality of bribery. (pp. 29–30).
As the above-mentioned examples seem to indicate, practical Romanian soci-

etal norms are often in contradiction with legal norms. The legal norms do not
affect the society’s informal behavior, since almost nobody seems to believe in
them or consider them adequate for their lives. The following areas are a few where
corruption has been most visible and audacious in the past twenty years of
Romanian public life:
1. Privatization of state-owned companies. The first and most infuriating form
of corruption in Romania has been the privatization of state-owned companies.
The typical model would have the managers of state-owned companies, techni-
cally public bureaucrats, sell the profitable components of the firms at signifi-
cantly undervalued prices to themselves or a close member of their family.
Negrescu (1999) identifies two methods of “spontaneous privatization”—“the
joint ventures, the start-up businesses to whose social capital contributed state
enterprises with an important part of their assets, and the increase of the social
capital of state enterprises which were entirely subscribed by private investors
(usually insiders).”
2. Bad debts and nonperforming credits. The second method of corruption is
taking out loans from government banks on subjective merits and not paying it
back again, or selling goods to a “preferred customer” (usually a relative or a
family member) then declares bankruptcy and never paying their debts. Naturally,
1.2 Corruption in Romania: General Concepts and Poignant Examples 13
all those bad credits and underperforming loans were then transferred onto the
national debt.
3. Bribery. This third method of corruption seems to be the most prevalent in the
Romanian society. This practice is present almost everywhere, from public
acquisitions, license and agreements issuance, loans, access to education and or
medical services, government jobs, etc. Even the private sector, according to
Vladimir Pasti, “preferred to adapt replacing the uniformity of rules and eco-
nomical mechanisms with the uniqueness of bribery decision. This allowed them
to continue their businesses and to maintain the profits even without getting a
priority position in the power system” (Pasti, 1995, p. 309).
4. Subjective justice. From a general perceptive, the Romanian legal system is
perceived as being the most corrupt. The study undertaken by the World Bank in
2000 emphasizes that 53 % of public servants, 55 % of the citizens, and 65 % of
all companies consider that all or the great majority of the justice system repre-
sentatives are corrupt. The study asserts the fact that one in five citizens who
were involved in a trial paid a bribe in the form of money or presents. The major-
ity of those who paid the bribe stated that they paid it to their lawyers. Of those
who gave money, presents, or offered services in return, 33 % said that they did
it through the mediation of their lawyer.
5. Political party. The fifth area where corruption seems to be most developed is
in the area of party politics. The general perception is that political parties coor-
dinate, perpetuate, and protect corruption. Through the above-mentioned prac-
tices, party members are involved in illegal practices by utilizing their bureaucratic
positions. The party is in a sense the “broker” of corruptive acts, by controlling,
sanctioning, organizing, and protecting their members in exchange for their loy-
alty and financial contributions. Grødeland, in his 2007 article, Red Mobs,
Yuppies, and Lamb Heads: Informal Networks and Politics in the Czech Republic,
Slovenia, Bulgaria, and Romania, identifies three types of favors parties and
their members do for each other: (a) favors to obtain legal rights using routine
procedures; (b) “shady” favors disguised as legitimate requests; and (c) subjec-
tive, preferential favors.
6. Clan-type corruption. This type of corruption develops around a strong-willed,
charismatic leader who may or may not be a political/administrative leader. He/
she develops a faithful following either as job provider (administrative jobs) or
contract provider (public contracts). In Romania, they have been named “local
barons,” for their excesses and the personality cults they encourage.
Radu Nicolae (2010) concludes his research on corruption by stating that the
phenomenon of corruption always manifested itself in human societies in different
forms, at different levels, and having different effects. He defines five different types
of definitions of corruption: based on the law, based upon public interest, based
upon public opinion, definitions based on markets, and definitions based on institu-
tions. In the conclusion of his survey, he gives the following definition of
corruption:
Corruption is the abusive exertion of power to make public decisions with the purpose of
expanding or/and keeping the power or the sources of it (the wealth and status)—for a pri-
vate or political gain—which negatively affects the objective or the values (the founding
principles) of the social and/or political system (Nicolae, 2010, p. 236)
The major gap in the corruption literature is the assumption that the phenomenon
of corruption is similar everywhere in the world. He criticizes this assumption since
the analysis of corruption always takes the external, visible exertion of power.
The moralist approach assumes the condemnation of corruption from the per-
spective of a normative theory. The revisionists deal with the social consequences of
corruption and they identify ten main positive effects of corruption, in a certain type
of society in process of modernization. One of these positive effects is that corrup-
tion allows the participation in the decision-making process of some social groups
more than they could have otherwise participated. Other positive effects: corruption
assures political unity, corruption is a substitute for violence, corruption backs up
modern institutions, corruption lubricates business wheels, corruption determines
investments and private capital formation, corruption encourages innovation, cor-
ruption assures correct economic politics, corruption promotes competition and
efficiency, corruption reduces tensions between bureaucrats and politicians. All
these effects of corruption are not unilateral and equally applicable anywhere, but
rather depend upon circumstances.
1.3 Corruption Studies and Surveys in Romania

and the Region
In the following section I shall outline a limited number of primary data studies that
will outline corruption up until the year 2011, mainly from the perception of the citi-
zens and public administrators in Romania and the neighboring region of Eastern
Europe and the Balkans. Further, in an attempt to supplement the public and govern-
ment perspective I shall include our teams survey of the private business commu-
nity—foreign and domestic—that I hope will constitute my contribution to the
current public administration debate.
In 2005 the Center for Liberal Strategies published the results of the study titled
IBEU Integrating the Balkans in the European Union: Functional Borders and
Sustainable Security. The survey was coordinated by Georgy Ganev and Yana
Papazova, from December 2003 to January 2005, and it mainly tested corruption
perceptions utilizing “the IBEU Fifth Framework” in Romania, Bulgaria, Serbia,
Montenegro, and Macedonia. Even if the study may be outdated, some of the find-
ings may be relevant in analyzing Romanian culture and its understanding of cor-
ruption. The findings of this survey indicate that cultural values are consistent across
the region, even if all nations “enjoyed” a different type of communism, leading us
to believe that those attitudes and understandings were forged in the pre-communist
period and remained consistent in spite of transformational efforts by Europeans in
1.3 Corruption Studies and Surveys in Romania and the Region 15
the pre-war period or by Soviets in the post-war period. The survey attempts to
answer the following questions:
• Do people perceive “particularism” in the region, and if so, how?
• Does it bother them?
• Does it seem to be an intrinsic cultural feature for the whole region?
• How does this perception affect people’s attitudes toward the rule of law, trust in
government, each other, and the state?
• How might these cultural factors affect the Europeanization efforts in the coming
years?
The IBEU survey results point to widespread deception and mistrust. In each of
the countries surveyed, the majority of the population perceives that their compatri-
ots are rather deceptive people. Approximately 50 % claim to have been cheated in
the previous year, many acknowledging that they themselves are not very good at
keeping their own word with the exception being toward those “who really deserve
it.” Particular trust is high throughout the region; people seem to trust some and
distrust others, with many people predisposed to not trusting anybody outside their
family circle, yet people claim they have somebody they trust enough to start a busi-
ness with. Distrust is therefore directed at people who are outside their circle of
trust, much as it would be expected in a typical rural society.
The study further shows not only that people in Romania and the region do not
trust each other, but more importantly, do not trust their state. The population per-
ceives that the law preferentially treats people differently and that there are privi-
leged groups who seem to be above the law. These groups tend to be made up by
politicians, wealthy individuals, policemen, and individuals “with the right connec-
tions” to network people. The presence of policemen on the top of the list far above
criminals illustrates that citizens perceive the ultimate particularism of their society:
those entrusted to ensure fairness of the law are in fact those who promote and per-
petuate the unfair distribution of power and justice.
At the same time, or perhaps because of it, the study does not find very high
respect for the law. Over 30 % of those surveyed believe that “only good laws should
be respected” and more than 50 % of the surveyed group believes that the law should
not stand in the way of a person who needs to accomplish something. The citizens
of the region do not exhibit the same attitude toward the law as their western
European counterparts. They seem to distrust the law and feel that it only benefits
certain groups. Regardless of whether a law is good or bad, it is the feeling of fair-
ness that subverts the rule of law. Those who feel more strongly that society is unfair
and that people lack equality before the law tend to be the most educated and the
most politically informed. It is these individuals that strongly identify the division
between the privileged “network people” and ordinary citizens.
Few people acknowledge giving bribes, and those who do are only partly satis-
fied with the results. The number of people who complain of unfairness in the public
service area varies from 20 % in the case of tax offices to 38 % in the case of the
courts; 25 % complain about the treatment received from the town-hall offices and
32 % about the treatment received from the police. The pattern suggested by the
data collected is quite mixed. There seems to be one privileged category: people
with the right connections. They report maximum satisfaction from public services
and as far as they are concerned, the state works for them. Second, there are those
who lack connections but have enough financial resources to pay the bribes. Their
satisfaction is mixed despite the attempt to make public services more efficient.
Finally, there is a large majority of people who fail to personalize services or grease
the wheels, and naturally are quite dissatisfied with the services they get.
The picture turns even bleaker when people are asked to rate whether their public
institutions serve the public interest. Local governments are seen as doing some-
what better compared to the courts and parliament who are perceived not to serve
the public interest by at least 50 % of the population. The evaluation of public insti-
tutions, parliament, government, president, courts, prosecutors, tax offices, and
police were aggregated into an index of trust in the state, or “social trust.” The
general perceived trust in public institutions is lower than the negative direct experi-
ence people report as having. The perception of unfairness is general, not specific
for any particular state agency. People complain that others are above the law and
the perception is that this group enjoys preferential privileges regardless of the
regime change.
In Romania, as in the other nations surveyed, the number of people who com-
plained about this pattern was around 80 %. What people experience in Romania
and the region is not a clear break with the past, neither a wholesale replacement of
the ruling class which was expected at the time of the revolution that overturned
communism. Quite the contrary, what most people experience is continuity: the
same old culture of differentiated privileges along with the same network of indi-
viduals still in high status positions.
There are strong imprints of particularism on Romanian society grounded in the
recent experience of transition from communism to capitalism. Status groups and
informal networks might have existed under communist rule plundering the public
resources, yet during the turbulent transition of the early 1990s, this reality became
visible, leading to even more mistrust among people and the ruling class. During the
era of large-scale privatization, many predatory opportunities existed for “properly
networked individuals” in a defenseless society. The result was an accentuated dis-
tance between the rich and the poor and the general public perception of an unfair
society. The legitimacy of the government was compromised and trust in the rule of
law and those making the law diminished significantly. Naturally, this did not con-
tribute to the building of modern social capital, but rather enforced the historical and
culturally accepted patterns of particularism and informal network behavior.
La Porta et al. (1996), states that cultural transformation can only take place if
there is a significant change in the role models of a society, and if, in the case of a
particularistic society such as Romania, there are enough people committed not to
join the networks but rather advocate for universalism values and norms. Social
trust in Romania can be generated only once signals are transmitted that the state is
fair, able, and willing to punish bad deeds and reward good ones. The key for
socially virtuous behavior lies with the government and political elites who are at
the epicenter of the informal networks and stand to lose the most in case of the net-
works’ disappearance. Ironically, most anticorruption strategies coming from the

European Union seem to multiply formal institutions while they fund corrupt gov-
ernments who publicly claim to fight corruption. It is safe to conclude that these
strategies are doomed from the start.
In the 2009 article, Some Notes about the Decentralization Process: Implications
on Public Administration Corruption in Romania, authors Andrei, T., Matei, A.,
Stancu, S., and Oancea, B., undertook a survey of 971 Romanian public administra-
tors who were questioned on issues relating to corruption. They asked questions on
the topics of the internal organization of administration institutions, political influ-
ence on local and central administration, the decentralization process, post assign-
ments, gender discrimination, and corruption’s implications on the Romanian
economic and societal ecosystem. As the title of their article suggests, the main
hypothesis was that a decrease in corruption automatically came hand-in-hand with
decentralization. Their first finding was the perception that local government
authorities do not have the administrative capacity to manage basic public services
such as health, public education, cultural services, public order, protection services,
and public finance. Further, between 2007 and 2008, the corruption perception in
Romania was at a level of 3.6 out of a total of 5.0 on Corruption Perception Index.
They probed further to ascertain the main sources of corruption and if there was a
difference among the various central and local governmental levels. Their conclu-
sions were that:
An important factor of the corruption is the lack of transparency in the public administra-
tion institutions… Another important factor for the reduction of corruption is the introduc-
tion of a stable remuneration system that will motivate the employees for a long period.
Actually, from the three dimensions of the satisfaction degree of the public servant, salary,
respect at the work place, and work environment, the first one records the lowest level
(Matei, Stancu and Oancea, 2009).
Another more recent study on corruption and Romania has taken the issue a step
further. In the 2011 article, The Measurement of Corruption and the Identification
of Its Propagation Factors, authors Andrei Tudorel, Matei Ani, and Iacob Andreea
focused on the general level of corruption in the area of procurement. They sampled
530 public administration employees from all areas of government and questioned
them on the issue of corruption and its causes, its evolution over the past few years,
and the effectiveness of the anticorruption initiatives especially in the public works
outsourcing.
On the question: “How do you appreciate the level of corruption in the following
sectors” on a scale of 1 (worst) to 5 (best), the answers are listed in the following
Table 1.1.
On the question: “What sectors of public administration generate corruption?”
the answers are listed below Table 1.2.
Based on those findings, we see that the political party system is perceived to be
the most corrupt, followed by health and central public administration.
As to the sources of corruption, the authors asked which of the following ele-
ments contributed to the corruption: the legal framework, the wage system, the
morality of public servants, the economic pressures, the political pressures, and the
Table 1.1 How do you appreciate the level of corruption in the following sectors?
1 Generalized 5 There is NO
Corruption 2 3 4 Corruption No.
1. In General 18 34.9 30.2 13 3.7 0.2
2. In Education 5.9 25.6 45.3 18.7 4.5 0.0
3. In Health 15.2 36.2 32.7 11.5 3.9 0.6
4. In Political domain 30.4 35.6 19.5 8.7 5.2 0.6
5. Local public 9.3 23.6 37.1 20.6 9.3 0.2
administration
6. Central public 13.0 32.3 32.3 14.1 7.8 0.6
administration
7. Your institution 5.9 8.7 19.3 35.1 31.0 0.0
Source: Andrei et al. (2011)
Table 1.2 Corruption by The level

public administration sectors of Corruption 1–5
1. In General 2.5
2. In Education 2.9
3. In Health 2.5
4. In Political domain 2.2
5. Local public administration 3.0
6. Central public administration 2.7
7. Your institution 3.7
Table 1.3 The causes of 1–5

corruption in Romania
The legal framework 3.2
The wage system 3.7
The morality of public servants 3.2
Economic pressures 3.1
Political pressures 3.4
The citizens behavior 2.8
citizen’s behavior on a scale of 1 (does not contribute to corruption at all) to 5

(highly contributes to corruption). Their research findings were Table 1.3.
Once again, the political factor is perceived to generate the highest amount of
corruption and the low wages paid to the public administrators. The authors
conclude:
…based on the sample data, are indicating a higher level of corruption for Romania.
According to realized estimations, the level of corruption, on a measurement scale from 1
(a higher level of corruption) to 5 (low corruption) is 2.5. Furthermore, the perception of
corruption from different sectors of activities is different. The highest level of corruption is
perceived in the case of the political class.
According to the opinion of employees from the field of public administration included in
the sample, the most important role in the evolution of corruption is represented by the wage
system. The correct implementation of the new wage system in the public sector might be an
important factor for the reduction of corruption (Andrei, Matei, and Iacobs, 2011).
In 2012 along with my colleagues from the Griffiths School of Management

Ioan Fotea, Silvia Fotea, and Mariana Lazar we undertook a research survey that
was published by the research and consulting firm Advanced Solutions under the
title The 2012 Romanian Leadership Barometer. We utilized the “Blake and
Mount Leadership Grid,” which was adapted for the Romanian business realities
(see Appendix 1). The research was conducted through an online questionnaire at
the end of February 2012 and the business leaders that were targeted by our
research were leading private companies—foreign and domestic—with an annual
turnover of over ten million euros annually. We send the survey to approximately
5000 private companies and received 145 responses. Our purpose was to identify
the major challenges Romanian business leaders thought they would face in 2012.
Forty-six percent of the respondents were from Romanian-owned companies,
while the rest of 54 % were business leaders of foreign-owned companies. The
average age of the respondents was 44 years old, 97 % of them had a college edu-
cation, with more than half completing either a Masters or a Ph.D. degree and
only 3 % having just a high-school level education. One out of three respondents
was either the CEO, the president, or the executive director of their company, with
only 10 % of them were women.
In their responses, the Romanian business leaders indicated that they face obsta-
cles from both inside and outside their organizations. The main obstacles cited to
impede their efficiencies and effectiveness in 2012 were regarding instability and
unpredictability in “public economics” and “politics.” Three out of four also men-
tioned a “tough economic environment” as being a major obstacle in 2012. The
business leaders of foreign-owned companies were more concerned about obstacles
generated by the insufficient resources, organizational culture, and the limited trust
of the investors, while the leaders of Romanian-owned firms perceive their chal-
lenges as being generated by a growing complexity of the business environment and
the growing volume of information and knowledge. The female constituents of the
Romanian leadership encounters stronger inner obstacles in aspects regarding com-
munication, transparency, and the relationships with other managers compared to
the men, who perceive “government bureaucracy” as being an even more difficult
obstacle to pass. However, when it comes to their abilities, women seem to be more
self-confident than their male counterparts. Many global forces will interact and
transform both the business environment and companies in the next period.
Romanian leaders consider that in 2012, their companies will be positively influ-
enced by the growth of new emerging markets, the rapid rhythm of innovation, and
by the abilities, knowledge and expertise, people have.
What do you think will be the main obstacles in 2012?

Tough economic environment 74%
Impredictability of the political aspect 60%
Limited resources 30%
Limited trust of investors 26%
Organizational culture (the level of inner… 26%
Growing complexity of the business environment 21%
Internal communication transparency 18%
Growing volume of knowledge that I have to… 8%
Own abilities 6%
Relations with other managers 6%
Other 3%
0% 20% 40% 60% 80%
Fig. 1.1 What do you consider as the major obstacles of 2012
What kind of impact will the following political factors

have on your organization in 2012?
Global limitations on use of raw

materials 30% 70%
3%
Growth of the fiscal burden 97%
3%
Geopolitical turmoil 97%
0% 20% 40% 60% 80% 100%
Fig. 1.2 What impact will the following political factors have on your company?
In particular, the disturbing forces are perceived to be coming from the political
realm on issues such as political and legal instability, new taxes, and regulations.
Besides the political and legislative concerns, they cited “the economic environ-
ment” and “social factors” such as high unemployment and the aging of the
population as major concerns. Figure 1.1 illustrates the major concerns of the
Romanian business leaders.
In Fig. 1.2 we asked the general perception regarding governmental (national
and supranational) constrain on the utilization of natural resources, a possible
increase in the level of taxation and geopolitical instability. Seventy percent of the
respondents perceived the national and international restrictions on the utilization of
natural resources as something negative, while 97 % viewed an increase in taxation
and geopolitical instability as something negative.
What kind of impact will the following economical aspects

Growth of emerging economies and the

appearance of new attractive markets 86% 14%
Market's competitive forces 53% 47%
5%
Financial and currency crisis 95%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Pozitive impact Negative impact
Fig. 1.3 What impact will the following economic factors have on your company?
In Fig. 1.3 we asked about the perception regarding the general economic factors
such as globalization and emerging markets, natural market forces and currency
instability. Consistent with previous perspectives, 86 % of the respondents viewed
globalization and emerging markets as a positive phenomenon, 53 % view unre-
strained market forces as a positive and 95 % perceived currency instability as a
negative factor impacting their business in 2012 and beyond. When it comes to
globalization, it was interesting to see that there is a difference between the answers
of the leaders from Romanian-owned companies and the leaders of foreign organi-
zations. That being said, 45 % of the Romanian companies’ leaders comprehend
that globalization will have a negative effect on their company, compared to only
22 % of the leaders of foreign companies.
In Fig. 1.4 we asked regarding social factors. Although we did not question the
Romanian business leaders regarding their willingness to privately finance
education, it is safe to assume that their expectation is that traditional government
education initiatives will handle the education needs of their workforce. Furthermore,
on the issue of pensions, unemployment, disabilities, and other social-safety initia-
tives, the private sector of Romania is still expecting the government to carry the
burden. Interestingly, when asked if the abilities and the knowledge of the work-
force will affect their business success, 92 % of the respondents answered “yes.”
When asked about the growth of the social sector—government-sponsored, natu-
rally—62 % responded that it would be a positive development. When asked if they
feel the pressure from their consumers to be more socially responsible and if they
see that pressure as a positive or not, 60 % responded with a “yes.” Finally, on the
issue of an aging population and workforce 83 % of our respondents perceived it as
a negative factor.
Figure 1.5 represents the correlation between “opportunity” and “risk” as
perceived by the 145 Romanian business leaders that we have surveyed. In the pri-
vate, business sector, these two coordinates’ represent the essence of investment and
What kind of impact will the following social factors

Pozitive impact Negative impact
People's abilities, knowledge and expertise 94% 6%
Growth of the social sector 61% 39%

Increasing customer's pressures on
60% 40%
companies to adopt a social behaviour
Growth of the global labour market and its 55% 45%
migration
Aging population in the developed nations 17% 83%
0% 20% 40% 60% 80% 100%
Fig. 1.4 What impact will the following social factors have on your company?
Risk
100 90
Major Risk-Reduced Opportunity Major Risk-Great Opportunity

Fiscality
Geopolitical Turmoil
Financial and Currency Crisis
Aging Population
80
Worldwide regulations
70
regarding the use of

resources
60
50 40
Market forces
Global labor market Increasing consumer pressures on companies to adopt a
social behavior
Growth of social sector
Globalization
30
20
Social Media
Information availability Growth of emerging markets

and emergence of new markets
10
Innovation rhythm
HR ability and expertise
Reduced Risk-Reduced Opp. Reduced Risk-Great Opportunity
10 20 30 40 50 60 70 80 90 100 Opportunity
Fig. 1.5 Risk—Opportunity perception

economic activity as business people continually attempt to reach an equilibrium

between the right amount of risk and the perceived opportunities to maximize their
investment. In quadrant I, representing “high-risk and low-opportunity” they have
placed issues that are traditional in the realm of government control such as “high
and unstable tax systems,” “geopolitical instability” and “currency instability.” In
quadrant III, representing “low-risk and high-opportunities,” they placed issues
such as human talent development and new theologies.
In order to face an increasingly complex and challenging environment, Romanian
business leaders seem to focus on strengthening operational agility and increasing
the value and loyalty of their workforce by creating an internal environment that
encourages innovation and creativity. The labor market is experiencing fundamental
transformations as the so-called Generation Y (people born between 1980 and 2000)
continues to join the job market. Their attitudes toward work, aspirations, connec-
tivity, and technology along with the impact of globalization are changing the tradi-
tional paradigm of human resources development. They seem to recognize the
shortcomings of traditional, government-sponsored educational initiatives and are
looking for solutions for talent development and the increase in employee involve-
ment, motivation, and satisfaction. According to Elena Badea, the marketing direc-
tor for EY, a global consulting company, “internally, the main challenge for
Romanian leaders in 2012 is to generate a change in the way employees are utilized
and developing new ways to have a customer-focused approach.” Consistent with
other Romanian studies (Matei, 2010; Vlăsceanu, 2010), under 10 % of the
Romanian business leaders surveyed were concerned with traditional, western cor-
porate social responsibility (CSR).
When it comes to measuring their own performance, leaders of the top Romanian
companies use financial performance as the main indicator. Other relevant aspects,
like “personal contribution on major projects” and the “ability to recruit high-quality
employees” were indicated by the leaders. Only about 10 % consider issues such as
salary increases or receiving a bonus as a representative measure of their own per-
formance. In the same manner, the company’s reputation is ranked above the per-
sonal one, both inside the company and at the market level. When it comes to
nonfinancial indicators, the leaders of the foreign-owned companies were more con-
cerned about the company’s image and the reputation for being ethical. This crite-
rion is considered by 40 % of the business leaders in evaluating their own
performance in 2012. When asked to prioritize the qualities which a leader should
have in the current context, 59 % of the respondents indicated “strategic thinking”
as being the most important characteristic. Strategic thinking was followed by three
aspects related to the leader’s ability to inspire and instill respect through his per-
sonal example: “the capacity to motivate,” “the ability to set the overall direction,”
and “the ability to influence the company’s vision, integrity, character, and ethics.”
The leaders of foreign-owned companies consider soft-skills as more important
than their Romanian-owned counterparts, who are more adept at strategic thinking
and independent decision-making.
The external influences of globalization through the Europeanization process
and the domestic political and administrative realities of Romania are not distinct
and static realities. Quite the opposite, they are closely interrelated and extremely
dynamic and as such they must be analyzed and managed concurrently. Wade
Jacoby in his 2006 article, Inspiration, Coalition, and Substitution: External
Influences on Post-communist Transformations, makes a relevant attempt to offer
practical solutions for future reforms. International entities—such as the European
Union—have three major instruments in convincing domestic politicians of the
necessity for reform: lengthening their time horizons, engaging more domestic par-
ticipants in reform, and deterring opponents to reform. Out of the three, the most
effective method according to Jacoby is the building of informal coalitions with
domestic participants rather than forcing change by substituting domestic legisla-
tion or by attempting to inspire domestic politicians. Since this is the most efficient
strategy, the European Union should focus its efforts and financial support on build-
ing coalitions with Romanian civil society. As I will outline in the following chap-
ters, Romanian corruption and the quality of its governance cannot be simply fixed
with traditional western public administration tools. Instead, I propose that we fol-
low Jacoby’s suggestion and complement Europeanization instruments with civil
society reforms and initiatives. The Romanian political class might attempt to main-
tain their advantages through the avoidance of real reform, but this will only slow
down the Europeanization process. There is a danger however:
… is that these strategies could also result in equilibrium of partial governance reforms, not
at the most visible level of institutional adoption, but at the more intimate level of institu-
tional functioning and coordination. Institutions are not the only important aspect of a
consolidated democracy, but their ability to stabilize actors’ expectations is a key part of
democratic consolidation. Therefore, strengthening the effective functioning of these insti-
tutions is an important challenge for Romanian democratic development. (Young, 2008)
The Europeanization of Romania has been extensive, given the European Union’s
ability to promise and deliver higher and more tangible benefits than any other inter-
national organization. However, as presented above, there is both the motive and the
opportunity for Romanian politicians and public administrators to deter the process.
I have highlighted the Europeanization principles and mechanisms in this chapter
and how they have been implemented in Romania’s case. The legal administrative
space is in existence, but the political forces in Romania—both on the left and on
the right—have subverted the reform efforts through the poor quality of legislation,
weak administrative capacity, and institutional politicizing. The legal obligations
have been met to ensure membership but the legal transformation has not accom-
plished real change.
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Chapter 2
The Future of Public Administration Reform
in Romania
The process of Europeanizing Romania is advanced and has had positive and visible
results such as the growth in GDP per capita, the presence of multinational corpo-
rations, significant progress in infrastructure, and the development of public admin-
istration. In all fairness, even if there are shortcomings and aspects that require
improvement, significant progress has been made on varying fronts. This
Europeanization process, as analyzed in the previous chapters, has had a significant
impact on the public administration of Romania. The legal framework is in place
along with the Commissions’ monitoring reports verifying the progress of the nation
and the adoption of the European public administrative space.
Nevertheless, the reform process is not complete and Romania still faces a low
European funding absorption rate, crises in the educational and healthcare sectors,
a high emigration rate and widespread administrative corruption. In addition, since
2009, the Romanian government faces the global economic crisis along with most
governments in Europe, called by some authors a “government crisis” given that
public budgets cannot sustain previous financial commitments. From my perspec-
tive, I would like to suggest the hypothesis that the future of Romanian public
administration reforms will rest on two fundamental challenges: the curbing of
corruption and the generation of economic prosperity. In this chapter, I shall outline
the administrative intellectual instruments available for administration reform in
Romania such as New Public Management (NPM), Neo-Weberianism, and Digital
Government since I do believe that components of each will determine the national
capability for producing economic prosperity. Naturally, all administrative instru-
ments must be properly contextualized to Romania’s realities as they are dynamic
and highly debated reform initiatives in their own country of origin. However mod-
ern and efficient these tools may be, in my view they are still inadequate and do not
encompass all societal capabilities. Before understanding them and their impact
upon Romanian public administration, I will continue the analyses of corruption
started in the previous chapter.

DOI 10.1007/978-3-319-26997-9_2
28 2 The Future of Public Administration Reform in Romania
2.1 Cultural Considerations for Public Administration

Reforms in Romania
History and culture determine public administration operations within any country,
yet I will not attempt to use culture, history, or traditions as an excuse for the slow
public administration reform and the modernization efforts of the European Union
in Romania. There is, however, still the danger of those reform initiatives being
implemented without cultural considerations and the necessary nuances of percep-
tions and local practices. Therefore, in this next section I would like to identify
some general considerations and subtle nuances that must be considered and
addressed in future Romanian reforms initiatives. The starting point for this discus-
sion is the 2011 article, Differential Legacy Effects: Three Propositions on the
Impact of Administrative Traditions on Public Administration Reform in Europe
East and West, by Hinrik, Sahling, and Yesilkagit that appropriately identifies the
issues that are most tension-prone. Even if this is an incomplete list, future reform
initiatives must take into account the Romanian cultural particularities and, in the
opinion of this author, twenty-first century public administration reforms should
purposefully attempt to reform the culture itself.
As would be expected, comparative public administration studies assign signifi-
cant weight to historical legacies and traditions in the process of modern administra-
tive reforms (Painter & Peters, 2010). It is commonly accepted that traditions and
historical legacies can influence, block, delay, or filter political and administrative
reform proposals in any country (Christensen & Lægreid, 2001; Olsen & Peters,
1996). There are powerful, resourceful, and coercive tactics that institutions such as
the European Union, the World Bank or the International Monetary Fund can apply
to modernizing nations and accelerate their pace of reforms, yet both academic
studies and casual observation seem to indicate that administrative tradition is more
resilient than expected. This “discursive convergence” or the adoption of reform
language without changing the day-to-day business of the government seems to be
a common practice in newly integrated European nations. Europeanization experts
place a particularly important emphasis on national administrative systems
(Harmsen, 2000; Knill, 2001). Initially, it was expected that national administrative
systems of newly integrated nations would radically and automatically transform
themselves in response to European pressure, leading to administrative conver-
gence between the European Union and the integrated states. Subsequent studies,
however, have abandoned this hypothesis and instead suggest that significant diver-
gence between national administrative systems and a central administration still
persists (Olsen, 2008). The Europeanization process may continue for Romania and
the newly integrated nations of CEE, however the details of this divergence are not
very clear yet, and I would like to suggest the following considerations be taken into
account:
2.1 Cultural Considerations for Public Administration Reforms in Romania 29
2.1.1 Romania’s Lack of Administrative Tradition
The first consideration that must be reflected upon is that unlike western Europe,
Romania does not have a long and ingrained positive and democratic administrative
tradition. Administrative tradition refers to ideas, institutions, and practices that
have been dominant over a long period. In western Europe, administrative traditions
can trace their roots back to the nineteenth century and the age of state and nation
building. By contrast, the administrative tradition of Romania has changed in the
past two centuries, with several regime changes along with significant transforma-
tions and reconfigurations of its public administration. If western European tradi-
tions are characterized by continuity and long-term stability, Romania lacks this
kind of stability. The continuity and longevity of administrative traditions in most
western nations imply a deep entrenchment of traditional patterns and a greater
resistance to change. Administrative reforms in most western democracies evolved
slowly, peacefully, and in a civilized manner, capable of coexisting in spite of pro-
found differences and disagreements. For instance, United Kingdom has four differ-
ent administrative traditions: the Whig, Tory, Liberal, and Socialist traditions that
have coexisted peacefully for a long period of time (Rhodes, 2005).
Frequent transformation in public administration along with the instability of
ideas, institutions, and practices tend to characterize the history of Romania. Due to
this unstable tradition, public administrators are used to adopting new reform initia-
tives without careful consideration, only to discover that they have implemented a
system that quickly requires additional reform. There are several causes that might
explain this practice: first, the administrative system has undergone “significant
disturbance” at the political regime level resulting in a radical change with the
administrative paradigm being utterly replaced by a competing and opposing model
(Baumgartner & Jones, 1993). Second, the Romanian regime has experienced a
“critical juncture” that set the country on new pathways of development rather than
intrinsic patterns of incremental changes (Bărbulescu, 2005; Thelen, 1999). Casual
observation may indicate that administrative tradition in Romania is too bureau-
cratic and rigid in practice and ideology; however in contrast with western Europe,
where a large population of civil servants exist and acts as guardians of administra-
tive heritage, Romania lacks tradition and stability.
2.1.2 The Inconsistency Between Ideas and Practice
The second consideration necessary for public administration reform in Romania is

the awareness that there is an inconsistency between practice and ideas, between
formal rules and informal practices (Crăciun, 2008; Petersone, 2008a, 2008b). In
contrast to Romania, western European nations draw their consistency and stability
from the entrenchment of public administration and the seldom changed body of
public law resulting in stable administrative behavior. Values, norms, and practices
slowly but continuously adapt to external changes but only within the existing
framework of the law (Bulmer & Burch, 1998; Jordan, 2003). This is the back-
ground and mentality that Europeanization experts bring to Romania: in their view,
changing the law and the governmental institutions will automatically change the
values, norms, and practices of public bureaucrats.
Unfortunately, the administrative tradition of Romania is far less consistent
and more familiar with ignoring rules than their western counterparts. In their
2006 book, Governing after Communism, Dimitrov et al. point to institutional
weakness and frequent changes in formal institutions as a trademark of post-com-
munist regimes and a source of weakness and instability. Bureaucrats who are told
of one more, externally imposed administrative reform tend to dismiss it as sim-
ply another in a long series of failed reforms. Instead, informal patterns of behav-
iors, values, and norms persist, regardless of the formal laws and institutions, or
whether those directives come from Brussels or Washington, as they use to come
from Moscow or Istanbul (Jowitt, 1992; Nunberg, 1999). As a result, the general
discrepancy between legislative intent and public administration practice remains
one of the fundamental problems of most post-communist administration (Goetz
& Wollmann, 2001). This inconsistency affects not only the speed of change but
also the depth of change. Western democracies practice the slow adaption of
administrative behavior followed by formal institutional change. In contrast,
Romania has had frequent formal institutional changes designed to induce a trans-
formation of administrative practice but resulted in a much lower degree of con-
sistency between formal rules and natural practice. Ironically, what most public
administrators in Romania desire is stability not transformation.
2.1.3 Unhealthy Reliance on International Pressures
The third consideration that we must be mindful of in Romanian reform initiatives

is the historical tendency to overrely on external and international pressures to the
detriment of domestic ones. In Romania, it may appear that domestic reform initia-
tives and directives are not considered as serious and significant as those imposed
from outside the nation. Reform literature on public administration identifies a
range of normal factors that compel a system to reform including social, economic,
political pressures and scandals and/or sudden crises (Barzelay, 2001; Hood, 1995;
Politt & Bouckaert, 2000; Wright, 1994). Those same factors and social pressures
exist in Romanian society as well, but are not considered nearly as important as a
directive coming from the European Union, World Bank, or International Monetary
Fund, espoused by some so-called expert who is probably visiting the country for
the first time. It seems that most reform initiatives during the past two decades have
been undertaken simply to please one international body or another, lacking real
conviction among the political class who only “discursively” agreed to it, and the
public administrators who simulated its implementation (Comşa, 2008).
Romanian public administration was historically exposed and acceptant of

international influences; during its imperial days Romania was at the periphery
of the imperial center and during communism it was under the strong influence of
Moscow (Brzezinski, 1967). While the mechanisms of influence have changed,
public administrators in Romania are again subject to intense external influences
without real domestic input. From the European perspective, Romania is a “down-
loader” of Europeanization (Goetz, 2005) and even if it is now expected to be a
contributor, or at least responsible for its own reforms, the historical overreliance on
external pressures might hinder this process (Börzel, 2005).
2.1.4 The Negative Perception Regarding a Strong State
The forth consideration important for the future of public administration reform in
Romania, is the negative perception that exists among the citizens of Romania
regarding a strong and well organized state. During communism, any associations
with or an indication of the national state had negative connotations, since in the
minds of the people the state was in essence the ruling communist party and its
controlling secret service, the Securitate. The state was generally perceived to be
negative, inefficient, controlling, and dictatorial, therefore requiring a revolution.
The lingering and perhaps unintended consequence is anemic loyalty to the state
and patriotism and a reluctant desire to its improvement. In this context, sacrificing
for the state is anathema to most people who see a reduced value in the concept of
Romanian citizenship.
While this may sound attractive to the opponents of big government in the West,
it does create serious problems that a young democracy such as Romania cannot
afford. Given the inexperience with democracy, Romania cannot afford the disloy-
alty and quick emigration of its citizens, disrespect and disregard for the rule of law,
and the lack of intragovernmental collaboration. The past two decades, reforms
borrowed from the west seemed to go directly into modern management systems
without the establishment of a solid base for democratic development of the classi-
cal hierarchal structure that public administration required along with their healthy
accountability system. Jenei and Szalai in their 2002 book, Modernizing Local
Governance in a Transitional Nation, argue that in Romania, and as well as in other
central and eastern European nations, public administration faces this special chal-
lenge since they have to create a stable enough political democracy at the same time
as they implement the principles of efficiency and effectiveness.
2.1.5 The Necessity of Stable and Healthy Regulations
The fifth consideration is the requirement of stability and healthy regulations that
are universally applied to all members of a society. In the west, public sector orga-
nizations are usually considered permanent entities and public employment as
lifetime employment; in Romania there are significant questions regarding the

permanence and structure of public administration (Matei, 2010). In the west, per-
manency and stability are seen as the problems while in Romania their very exis-
tence may provide the solution. The very term “transition,” that in many ways still
describe the status of the Romanian public administration, contradicts the concept
of stability and predictability. The most common obstacles for sustained develop-
ment of public administration in Romania are the unstable political context, the
constantly changing framework and numerous unfinished reform initiatives. The
issues facing Romanian reformers are not ignoring environmental changes or stag-
nant ideas and approaches, but quite the opposite, not having time and stability to
allow for appropriate policy-making, testing, and implementation.
If western governments struggled with their past practices and solutions, the
Romanian government had to create its own healthy traditions and heritage.
Looking to the past is not an option given the disconnection between its previous
political and ideological systems. In Romania, “stability” is much more attractive
than “flexibility.” The lack of capacity to create a new political-administrative
system may be a natural legacy of a totalitarian system, but its prolonged absence
may lead to risky outcomes. A common mistake in political-administrative
reforms over the past two decades has been that numerous reform proposals were
changed before they reached their maturity, even with counter-proposals that had
the opposite intent or effect. Given this fluid context of political, administrative,
and economic instability, any base of stability has exponential virtues. Long-
standing organizational structures, constant principles, and unvarying targets and
benchmarks can help navigate through the transition and ensure stability and
implement ability (Comsa, 2008; Bondar, 2007).
Consistency is also required to build administrative capacity and create organiza-
tional memory. Romania is a nation that had to rebuild its social fabric along with
its political, administrative, and economic systems, numerous laws, rules, regula-
tions, and institutions were implemented overnight to provide some sense of stabil-
ity and predictability. However, in order for those rules and institutions to function,
there is a need for an underlying set of commonly understood cultural principles and
values, or what Alexis de Tocqueville called “the habits of the heart.” Therefore, the
first objectives of the rules and regulations are to teach the population what those
principles are.
Guy Peters, in his 2001 book, The Future of Governing: Four Emerging Models,
suggests that transitional nations actually require more regulation to ensure the
condition of institutional building and the elimination of corruption. He notes that,
for instance, discretion in personal management—a key feature of modernization
efforts—may prove too risky given the underdevelopment of the law, limited
managerial experience, and an unstable culture lacking adequate control mecha-
nisms. Verheijen (1998) accurately predicted that further liberalization of public
employment conditions will actually lead to increased politicization, instability, and
corruption. He stresses the difficulty in introducing modern, merit-based employ-
ment to replace the patronage system. Unfortunately, due to the negative experience
of a highly centralized, hyper-bureaucratic communist system, deregulation of any
kind is alluring to the Romanian public. However, we must question if deregulation

of public management, with “managers that are free to manage,” is suitable for the
Romanian administrative system given its lack of ethics and tradition of corruption.
These modern initiatives may not be viable before a set of values are in place to
ensure that government operates in an accountable and uncorrupt manner. To quote
Peters: “despite the attractiveness of ideas such as deregulation and flexibilities,
governments attempt to build both, effective administration and a functional democ-
racy may require much greater emphasis on formality, rules and strong ethical
standards” (Peters, 2001).
2.1.6 The Absence of a Private Sector
The sixth consideration in reforming public administration in Romania is the

absence of a healthy, mature, and efficient private sector ready to take on the
responsibilities previously held by central government. Conventional wisdom and
reform initiatives in the western world—particularly the USA and UK—claim that
the antidote to a corrupt and inefficient state is an efficient and productive private
sector. That may be the case in western, developed nations (although, highly debat-
able) but certainly not in Romania, given the immaturity of its private sector. Peters
states that “the primary intellectual root of the market approach to changing the
public sector is the belief in the efficiency of markets as the mechanism for allocat-
ing resources within the society” (Peters, 2001). The presence and western under-
standing of private companies, entrepreneurship, competition, privatization, and
efficiency were central concepts taken for granted and simply assumed by reform
initiatives in Romania. Yet, the Romanian private sector is only two decades old.
It is very underdeveloped and for the most part it has different understandings of
simple concepts such as “conflict of interests,” “legal tender,” “free-market econ-
omy,” etc. (Văduva, 2004)
When referring to entrepreneurial or economic activity in Romania, there are
several and different interpretations. The first and most common form of private
economic activity is the entrepreneur-trader, the individual or a company that
engages in small-scale commerce in a semi-professional manner. Given the long,
small-trading tradition of Romania, this is the most common and accessible form of
economic activity.1 Second, there is the activity created by the foreign multinationals
that entered Romania after it joined NATO, to take advantage of its natural resources
and inexpensive labor. Third, there is the legacy of the privatization of state-owned
resources immediately after the revolution of 1989 by their pervious communist
managers.
1
The most common dwelling name in Romania is “târg” or market, leading us to believe that com-
mercial activity—buying materials in one place (or foreign country such as Turkey) and selling it
in the “târg” was considered advanced economic activity.
As mentioned previously, this process was chaotic, non-transparent, and bursting

with accusations of corruption and cronyism. A dubious relationship developed
between the new entrepreneurs and the political class responsible for the privatiza-
tion. The competitive strategy of the newly privatized firms has not necessarily been
modernization, efficiency, or professionalization, but instead ensuring preferential
treatment on various government contracts and monopolistic positions. This strat-
egy has ranged from lucrative government contracts all the way to monopolistic
market positions ensured by contradictory laws and administrative methods. Viewed
through this perspective, we begin to understand the purpose of the legislative “zig-
zag” of the 1990s where the political class and its administrative apparatus responded
to competing economic interests. Creating a legal framework for a new market
economy in such a context was not an easy task as it required first the establishment
of a basic and functional constitutional framework, property rights, evaluation of
assets, and redress mechanisms. Creating stable, fair, and enforceable constitutional
law is the first and very basic governmental function and it cannot be accomplished
by deregulated networks of fragmented public agencies. Unfortunately, the private
sector of Romania was too inexperienced and closely connected with the govern-
ment to act as a counter-weight and reform alternative.
Finally, the Romanian government is not yet able to act as a “smart buyer” given
the institutional settings that are too weak and cannot control and evaluate complex
contract relationships. In addition to the lack of a proper legal framework, the pres-
ence of uncompetitive markets with much higher internal costs is one of the main
reasons why “contracting out” fails in former communist nations in central and
eastern European nations (Manning, 2001). Competitive and efficient markets are
absent, instead being comprised of monopolistic or oligopolistic structures. Under
these circumstances, the argument about “unit cost savings” is far more controver-
sial than in developed nations. If the internal costs of a private provider are unknown
or unstable, it is difficult to compare its performance against public entities.
2.1.7 The Fragmented and Competing Nature of Public

Administration in Romania
A seventh consideration that must be accounted for is the fragmented nature of

Romanian public administration. Given modernization initiatives inspired by the
New Public Management (NPM) ideology and sponsored by international organiza-
tions such as the World Bank and the International Monitoring Fund, the traditional
large, unified, and monopolistic government has been subject to strong fragmenta-
tion through either horizontal or vertical specialization. The result has been the
establishment of quasi-independent and autonomous governmental agencies with-
out clearly defined jurisdictions and responsibilities. The intent of this initiative was
to move the production of public goods as closely as possible to the consumer in
order to reduce corruption and increase efficiency, but what resulted was a
dysfunctional, contradictory network of independent territories making coordination

and speedy decision-making nearly impossible. This decentralization initiative was
built on the erroneous assumption that people will naturally collaborate and that
there are adequate and objective monitoring and control mechanisms that can objec-
tively assess and communicate the performance of each decentralized body.
A. J. G. Verheijen in his 2003 report, Public Administration Reforms in Post-
Communist States, has drawn attention to the usually poor accountability and coor-
dination system that exists in central and eastern European public sectors. This lack
of coordination and actual competition among agencies was inherited from the
communist regime where the Communist Party was the central dictatorial authority
and local power-brokers competed among themselves for favors from the central
authorities. Romania has been successful in dismantling the communist system in
structure and central dictatorial control, but less effective at integrating and coordi-
nating new systems. Little has been done to develop mechanisms for interorganiza-
tional and intraorganizational coordination. It seems that public administrators have
developed a pervasive culture of extreme specialization and a “silo mentality” rather
than understanding and responding to an interconnected reality. The transformation
from one sector economy that existed during the communist era to a multi-sector
one encouraged the new units to emphasize their individual identity to the detriment
of partnerships and collaboration. Specialists are perceived to be more valuable than
civil service generalists, a mentality that has further fragmented public
organization.
All these transformations have taken place in a context where Romanian public
administrators lacked the traditions and informal relationships that bind their west-
ern counterparts and provide a sense of loyalty and belonging within governmental
agencies (vertically) and between governmental agencies (horizontally). If individ-
ual agencies and governmental units develop their own culture and work habits, the
natural long-term outcome is the development of rivalry rather than unity and col-
laboration within the public administration. Unity and coordination is paramount to
a new democracy such as Romania, which is accustomed with the efficiency and
predictability of dictatorship. Continuous corruption and administrative failure, as
in the case of Russia, might lead to a return of totalitarianism that may be perceived
as the lesser of two evils.
2.1.8 Technocracy May Stifle Democracy
The eighth and final consideration that must be considered for future reform initia-
tives is that democracy can be easily stifled by technocracy. Democracy is a fragile
form of government with significant shortcomings, notably its slowness and indeci-
siveness. In modernization efforts, there is a real danger of oppressing democratic
goals such as transparency, equal opportunity, access to information, fair procedures
and citizens’ consultation for the technocratic values of efficiency, effectiveness,
return on investment, and fast decision-making (Box, Marshall, Reed, & Reed, 2001).
In the previous century, countless dictators trampled upon democratic values under
the pretense of short-term, modernization initiatives. Effectiveness and efficiency
may actually bring a decrease in accountability and responsibility and the implemen-
tation of democratic values. The competition between efficiency and democracy may
be especially difficult for Romania, which lacks a long tradition of a democratic cul-
ture and whose political elites see first-hand the drawbacks of an inexperienced
democracy. It may prove difficult for rational public managers to understand and
support the fundamental issues of a democracy such as open dialogue, competing
ideologies, public procurement procedures or consultation with citizens. Since these
are expensive and time-consuming propositions, Romanian government can easily
fall into the trap of adopting cost concerns and efficiency connotation while sacrific-
ing democratic values. It is alarming that the concept of accountability to the public
by public administrators has often changed the definition of accountability for posi-
tive financial outcomes. Since the philosophy of marketization is utilitarian, being
good might include being cost-efficient; thus it is not unimaginable that being cost-
efficient alone might be perceived as the definition of good. This may lead to an
overconcentration on financial efficiency at the expense of accountability and citizen
participation.
This will be even more complicated in the future, as limited resources bring
additional pressure on governments to financially perform and reach technocratic
goals. Given the economic challenges, financial criteria will be a powerful tool in
assessing public sector performance. The same can also apply to the other mantra of
“client orientation” in the public sector. It may be easy to shed years of communist
history by voicing popular campaigns that proclaim that the customer is king, as
well as resorting to other methods emphasizing the needs and interests of various
consumer groups. However, it is dangerous in a country where civic education is
poor and citizens are unaware of their rights and responsibilities to limit the role of
the citizens simply to the role of a client. Limiting the government’s relationship
with its citizens to simply a market exchange can be especially risky in new democ-
racy since a strong and solid system of representative democracy is not functional
yet. In circumstances where citizens regard business participants as more influential
than government officials, constant negotiation and consumerism may seriously
undermine the legitimacy of the state (Drechsler, 2005b).
The weak Romanian civil society and the autocratic decision-making practices
by administrators and politicians alike deserve special scrutiny. There are special
situations where radical changes require fast decisions and robust action at the cost
of ignoring all voices, as in the case of some reforms over the past twenty years
which have been carried out in a top-down manner. However, the fact that little time,
patience, and effort were invested in educating the citizenry about the inner-
workings of democracy and, more specifically, their own responsibility toward the
state and each other, is of paramount concern. It seems that the current Romanian
bureaucrats, continuing the tradition of the communist era, disrespect the average
citizen’s ability to understand democracy and the workings of a modern state, and
prefers instead to make decisions on their behalf rather than educate them. This, in
the opinion of the author, is the single greatest threat to the future of democracy in
Romania and of the Europeanization of its administrative system.
2.2 New Public Management 37
I will next turn my attention to the three major ideological public administration
reform initiatives available to the reformers of Romanian public administration sys-
tem. I will briefly describe them along with their historical foundations since they
represent the tools for modernization and Europeanization. Many of their recom-
mendations have already been attempted in the past two decades in various forms
and with varying success. I do believe that these instruments provide limited
approaches that have missing components and in Chap. 3, at the conclusion of this
volume, I shall attempt to provide some possible complementary ideas.
2.2 New Public Management
Public administration, along with most forms of governance, seems to be under

constant reform. That has certainly been the case over the past two decades of politi-
cal freedom in Romania and it promises to continue so over some time to come. The
nation seems constantly unsatisfied with their government, while the mass media
and Romanian elites demand continuous reforms. One of the most hotly debated
reform ideologies in Romania over the past 20 years has been New Public
Management (NPM), and in this next section I will briefly outline its fundamentals
and origins in the US public administration history. Some experts may consider
NPM inappropriate for the Romanian and eastern European context, yet we cannot
ignore it since, as previously stated, NPM seems to be the preferred governance
ideology for the ultra-powerful, invisible financial markets, and international bodies
in the global context (Drechsler, 2005a, 2005b; Polidano & Hulme, 1999; State-
Cerkez, & Păunescu, 2008). In Romania’s setting, the transition from communism
to a free-market, liberal economy coincided with the zenith of neo-liberal public
administration reform concepts dislodging traditional Weberian bureaucracies.
Crucially, the NPM ideology was fully embraced by global organizations such as
the World Bank, the IMF, and the USID who were eager to present their advanced,
developed host countries as idealized models to the newly liberated communist
republics. Naturally, this administrative model was well received by the new
Romanian leadership who was enthusiastic to present its free-market credentials to
the general public who experienced five decades of failed central planning. Mishler
and Rose (1997) point out in their article, Trust, Distrust and Skepticism: Popular
Evaluations of Civil and Political Institutions in Post-Communist Societies, that
post-communist nations are in large driven by an unhealthy, juvenile, and blind
admiration of western societies, willing to copy everything without much contextu-
alization. Keeping in step with the other CEE nations, Romania began its reform
and privatization efforts with little knowledge and expertise about the western
nations it was seeking to emulate.
Romania’s transition from communism to a free-market democracy was charac-
terized by inexperience and impatience regarding the in-depth analysis, testing, and
scenario planning required by such a monumental task. Further, the rebuilding of a
crippling infrastructure would have been impossible without foreign financial aid;
but the aid was predicated upon the acceptance of New Public Management
embodied in western policies and expertise. Inexperienced Romanian politicians
and public administrators quickly adopted the fashionable NPM, disregarding their
own circumstances, overestimating the positive outcomes, and underestimating
negative ones. The focus was on pleasing western agency sponsors at the expense
of objective research and assessment of real local needs (Drechsler, 2005b;
Verheijen, 2003). Romania became a “marketizer” rather than a “modernizer,” lack-
ing the domestic expertise that could and would contextualize or at least anticipate
the applicability of NPM to its culture and administrative traditions. In such cases
of “uninformed transfers” Romania had insufficient information about the transfer-
ring policy and its implementation in the local context (Dolowitz & Marsh, 1996).
2.2.1 The Historical Basis of NPM
NPM was the premiere underling ideological basis for most of the reforms in
Romania in the early 1990s and it still continues to provide general guidelines for
public administration reforms the world over. Although not as powerful and popular
as it was in the early transition period, NPM or some of its components are still
utilized by the international community and financial markets. Even if it is a dis-
credited reform policy with significant shortcomings in the opinion of many experts,
NPM does continue to raise significant questions about traditional bureaucracy over
which it holds sizeable and positive improvements. Ironically, in the view of this
author, NPM is a more appropriate reform ideology in Romania today, with its more
mature society and private sector then it was in the early 1990s. Regardless, I believe
a brief understanding of its history and ideological underpinnings would benefit us
as we aim to properly contextualize it in the case of Romania.
NPM had its origins in Public Choice Theory and the so-called managerialism
theory that was born in the USA (Aucoin, 1990; Dunsire, 1995). The USA is probably
best-suited as a reference point for this theoretical development, because of the size,
complexity, and history of its administration and the diversity of its approaches. NPM
developed in the late 1970s and early 1980s in the Anglo-Saxon world under the
reform initiatives of Ronald Reagan and Margaret Thatcher who campaigned on
“small government” platforms. Later, the national governments of other common-
wealth countries such as New Zealand and Australia joined in, and given their initial
success, NPM became a reform alternative the world over. The common characteris-
tics of this practical managerial reform were identified by academic scholars rather late
and are still under discussion and debate (Dunsire, 1995). Tables 2.1 and 2.2, respec-
tively, represent the NPM characteristics that are unequivocally accepted, and those
that are often utilized although not universally accepted (Borins, 1994, 1995; Boston,
Martin, Pallot, & Walsh, 1996; Gore, 1994; Hood, 1991; Stewart & Walsh, 1992).
The “official” study of public administration in the USA began at a time when
public administration was in a disastrous condition. In the late nineteenth century,
the US political system was dominated by political parties, who gave administrative
Table 2.1 The undisputed characteristics of the NPM (Greuning, 2001)

Accountability
Budget cuts Vouchers for performance Performance auditing
Privatization Customer concept Decentralization Strategic planning/
(one-stop-shops, management
cash management)
Separation of Competition Performance Changed management style
provision and measurement
production
Contracting Freedom to Improved Personnel management
out manage (flexibility) accounting (incentives)
User charges Separation of Improved financial More use of information
politics and management technology
administration
Table 2.2 The generally accepted characteristics of the NPM (Greuning, 2001)
Legal budget/spending Rationalization of jurisdictions Policy analysis and evaluation
constraints
Improved regulation Rationalization or streamlining Democratization and citizens
of administrative structures participation
positions to their members in exchange for political favors. Much like Romania and
other former communist nations over the past 20 years, personnel changed after
elections and the public treasury was frequently plundered. Incompetence, ineffi-
ciency, and corruption were common characteristics of the late nineteenth-century
USA as well as European public administration (Schachter, 1989; Stone & Stone,
1975; Van Riper, 1987; Weber, 1968). Given these circumstances, the Progressive
movement developed to reform politics and public administration. These Prog-
ressives pursued the separation of politics and administration, and were interested in
an interventionist state administered by a neutral, competent civil servant account-
able through financial management. Their major contribution was the invention of a
career bureaucrat through the Pendleton Act of 1883, line item budgeting, and the
rolling back of parties and corruption (Eisenach, 1994; Lee, 1995; Waldo, 1948).
The main ideologues for the Progressives came from the New York Bureau for
Municipal Research, and were significantly influenced by the modern management
ideas of Frederic Taylor and Scientific Management. On the issue of corruption and
incompetence, the solution was to stress efficiency through techniques and studies
imported from private scientific management fields. The Progressives were the first
to use performance indicators to benchmark the efficiency of a public organization
as a major venue to identify and curb corruption (Schachter, 1989).
By the 1920s, academics built the science of public administration on the success
of the Progressive reform movement that presumed the existence of loyal bureau-
crats, honest politicians, and a political/administrative dichotomy. This science was
built on the theory of efficient organization functioning on the modern concept of
scientific management. Within organizational structures that followed these

principles, their chief executives were asked to function according to predictable
principles encapsulated in POSDCORB (Planning, Organizing, Staffing, Directing,
Coordinating, Reporting and Budgeting) (Gulick, 1937). The fundamental princi-
ples were:
• The principle of division of work and specialization
• The principle of homogeneity
• The principle of unity of command
• The scalar principle respective of the principle of delegation
• The principle of accountability
• The principle of the span of control
• The staff principle (Graicunas, 1937; Gulick, 1937; Mooney, 1937; Urwick, 1937)
In the 1930s under the auspices of the “New Deal,” the scope of government
activity and the principles of public administration were dramatically expanded.
The government became more involved in private lives, it regulated more activities,
it became more social-democratic, and was perceived to be built on scientific
objectivity (Egger, 1975; Waldo, 1948; Van Riper, 1987).
At the end of World War II, the principles of classic public administration
were reassessed and closely examined. One of the best known and rigorous critics
of progressive public administration was Herbert Simon in his dissertation
Administrative Behavior—A Study of Decision-Making and Administrative
Organization, which ushered in the Neo-Classic Public Administration movement.
His charge was that classical public administration was not scientific enough,
relying on inconsistent best practices drawn from experience and practice (Simon,
1976). He suggested building the science of public administration on the rigorous
and scientific discipline in observing the facts and studying the laws of human
behavior (Simon, 1976; Simon, Smithburg, & Thompson, 1962). The main practical
event of this period was the invention of the PPBS (planning, programming, and
budgeting system), a macroeconomic decision-making tool that was built on
the belief that central planning could lead to successful optimization. Under the
neoclassical public administration reform, terms such as inputs, throughputs,
outputs, outcomes, programs, and alternatives to budgeting became the norm
(Greenhouse, 1966; Gross, 1969; Schick, 1966, 1969). The classic progressive take
on public administration was enriched with a rational and analytical emphasis on
managerial studies, built on a vision of an active government with objective scien-
tific knowledge.
2.2.2 Public Choice Theory
The first theory to rival classic public administration approaches in the late 1960s
was Public Choice Theory. The promoters of this theory were James Buchanan and
Warren Nutter who built a platform for scholars interested in a society formed
around individual freedoms rather than strong state initiatives (Buchanan, 1986).
In their 1962 work, The Calculus of Consent—Logical Foundations of Constitutional

Democracy, James Buchanan and Gordon Tullock outlined the fundamental beliefs
that the individual—not the state—ought to be analyzed in order to understand the
government’s proper role. Social phenomena were in fact aggregated individual ten-
dencies, which acted only in accordance with their preferences, pursuing their own
aims. This was radically different from the classic perspective on rationality which
was bound by a theoretical optimum; rationality according to public choice scholars
was the pursuit of individual (selfish) goals according to the knowledge of a situation
(Tullock, 1965). This “selfish” rationality was at the center of this theory and the sat-
isfaction of an individual’s choices was the true benchmark for any political institution
(Buchanan, 1975; Buchanan & Tullock, 1962). The classic theoretical explanations of
representative democracy found that a simple majority rule, without constitutional
safeguards, could lead to the exploitation of minorities through “logrolling” by major-
ities who have an incentive to waste resources minorities pay for. This perspective was
primarily aimed at the classic social-democratic approach which saw the primary role
of the government as a redistribution mechanism that taxes the wealthy (minority) to
pay for social services for the poor (majority). Public choice theorists called into ques-
tion the very pillars of classic democracy such as public interest, common/public
good, social services, and representative democracy (Downs, 1968).
William Niskanen in his 1971 book, Bureaucracy and Representative
Government, outlined the tendencies for inefficient use of public resources enabled
by traditional budgeting techniques and the tacit agreement between what he called
the “iron-triad”: interest groups, law-makers, and governmental bureaucrats. He
pointed to the fact that bureaucratic organizations—legal monopolies not evaluated
by the free-market—have a tendency to accumulate tasks and resources and provide
as little public services as possible. Public choice scholars argued in favor of consti-
tutional safeguards to protect citizens against “political exploitation” which is the
case where an individual pays more in taxes then is received in public goods. Next,
they proposed a “polycentric” administrative system in contrast to the “monocentric”
system of classic public administrations. This polycentric administrative system
would be multiple governmental agencies that would be compared and contrasted
with each other, with multiple control mechanisms, and where the provision of pub-
lic goods would be separated from its production. Naturally, in this competition for
the delivery of public goods, private vendors would be encouraged to compete with
public ones. The system the public choice scholars envisioned would function best
in a highly decentralized and federalized government; it would be managed through
transparent financial systems such as chargers and vouchers and would treat citizens
as consumers with a public choice (Savas, 1982).
2.2.3 Policy Analysis and Public Management
The second influencer of modern-day NPM that has a major relevancy for Romania
in its public administration reform initiative is policy analysis and public manage-
ment. In the early 1970s, political scientists in the USA who were interested in finding
the failure causes of the grandiose social policies of the 1960s wanted to find ways to
improve the policy studies and the policy analysis (Parsons, 1995). Policy analysis
referred to the evaluation and explanation of current policy (Anderson, 1975) and the
proposing of future policies in an attempt to find solutions for current social and
political problems (Nagel, 1980). The evaluation of public policy became prominent
and intense analytical work was performed to provide accurate and objective informa-
tion to policy makers. The fundamental idea was that only an informed legislator
could propose optimal and rational policies. However, the rational politician did not
only require information about optimal policy needs, but also implementation and
evaluation instruments (Parsons, 1995).
Policy analysis and evaluation were wonderful initiatives, but the need for them
was quite limited: when schools of public policy began to train students for execu-
tive positions, they soon realized the pragmatic reality that the opportunities to
create optimal policies were extremely rare. As a result, most students of public
administration took a turn toward pragmatic public management (Bozeman, 1991;
Moore, 1995). Their work was similar to the work of private managers in US
corporations. The managerial developments from the private world were trans-
planted into the public sector to the point that the mere term “public” in public
management was highly questioned (Murray, 1975). These principles had deep
roots in the generic findings of neoclassical management studies and can be divided
up into rational/mechanical management techniques and humanistic/organic mana-
gerial techniques.
The rational/mechanical management studies produced:
1. Zero Base Budgeting (Lerner & Wanat, 1992)
2. Management by Objectives (Drucker, 1962; Sherwood & Page, 1976)
3. Techniques for Performance Measurement and Accounting (Henry, 1990)
4. Public Sector Marketing (Kotler, 1978) and
5. Rational Strategic Management (Wechsler & Backoff, 1986).
What these rational approaches had in common was a bias for gathering and
analyzing objective, mathematical information to find optimal answers. From this
perspective, it became paramount to measure and objectively reward the results you
wanted to stimulate.
The humanistic/organic management style was best represented by the 1982
book, In Search for Excellence, by Tom Peters and Robert Waterman that com-
pletely changed the public and private American management conception. The
book shows that the best and most successful American corporations were not ratio-
nally managed, but rather organic in their structure structured, with a humanistic
management style and a thick culture that inspire and lead their employees. This
provoked intense public discussions on how to best achieve excellence and contrib-
uted to the turning of the tides toward humanistic or organic management, a move-
ment that eventually spread to public management as well. Scholars asked whether
it may be possible to make public organizations excellent and accommodate the
principles of Peters and Waterman in the public arena. The most important organic/
humanistic examples were:
1. Organizational Development (Golembiewski, 1969)
2. Total Quality Management (Milakovich, 1991; Swiss, 1992) and
3. A culture oriented on strategic management, where mission statements were
used for leadership purposes (Moore, 1995).
2.2.4 The Shortcomings of NPM
The initial reference to NPM was made by Christopher Hood in 1991 in his article,
A New Public Management for All Seasons, and the economic pressure, along with
the demands placed upon the administrators from an informed citizenry, contributes
to its adoption. Modern NPM is an administrative reform ideology built on Public
Choice ideological theory. It incorporates the doctrines of organizational design
under the heavy influence of private management theories. It is a new paradigm
removed from the traditional public administration concept where a public servant
is simply expected to provide elected officials with their services, and objective
policy opinion in return for job security and lifetime employment. In stark contrast,
NPM is silent about job guarantees; quite the contrary, it expects fewer public jobs
through efficiency measures and the introduction of information technology. NPM’s
fundamental ideology is that more market orientation and competition in the public
sector will generate greater cost efficiencies and healthy performance pressures.
NPM is oriented toward outcomes and efficiencies through the better management
of public budgets. NPM addresses beneficiaries of public services much like cus-
tomers, and conversely, citizens as shareholders. Michael Barzelay in his 2002 The
New Public Management: Current Trends and Future Prospects summarizes the
perspective NPM has regarding the purpose of government. It ought to:
1. Provide high-quality services that citizens value.
2. Demand, measure, and reward improved organizational and individual
performance.
3. Advocate managerial autonomy by reducing central agency controls.
4. Provide the human and technological resources managers need and maintain
receptiveness to competition and open-mindedness about which purposes ought
to be performed by the state, the private, or the NGO sector.
Beyond a doubt, NPM had a major impact on the reform initiatives of Romania
and the other CEE nations over the last 20 years. The forced privatization of state-
owned resources, the speedily and sometimes artificial creation of a private market,
along with decentralization initiatives within the Romanian public administration,
were all undertaken at the behest of NPM ideology. The government was viewed
inherently as bloated, inefficient, and corrupt, therefore the best reform solution was
its reduction and fragmentation. Some scholars have discredited it as a viable

alternative for Romania (Drechsler, 2005b; Polidano & Hulme, 1999; Randma-Liiv,
2008; State-Cerkez & Păunescu, 2008) and although I partially agree with them,
NPM is a reality that will be continually promoted by the international community
in Romania and it does have some intrinsic value. Although partially discredited, it
does contain certain valuable ideologies; therefore a careful analysis of its short-
comings must be undertaken before adequate contextualization can take place.
In his 2005 article, The Rise and Demise of New Public Management, Wolfgang
Drechsler talks about the fact that when first analyzing and contrasting the public
and the private sectors, the first and most startling fact is their differences not simi-
larities. The state was primarily erected for its monopoly on power and force, as
well as its ability to impose its will upon the people; the benevolent attitude toward
the public good or the common wealth has been second place. In contrast, the pri-
vate sector is a perfect competition, made up of multiple participants who compete
via their influence with each other so they can maximize their profits. According to
Drechsler, NPM perceives little difference between public and private interests and
utilizes business techniques in the public sector that leads to the confusion of the
most basic ideas underlying the state: democracy and legitimacy. A state, especially
in a democracy, is best known for its regularity, transparency, and due process—
much more so than low costs and speed of providing public goods to its citizens.
The low costs and the speed imperative, which are fundamental to NPM, are inevi-
tably too narrow of a definition for the identity of the state. Efficiency is a relative
concept based on context and appropriateness; it is efficient to achieve an outcome
with minimum expenditure but in the case of governments there are additional
issues that must be taken into consideration. A traditional anti-privatization argu-
ment is that most activities performed by the state are done so exactly since no
realistic profit can be made from them. If cost-saving becomes the only concerns of
a society, it may neglect the general context or even the actual goals of government.
Public administration reform should actually concern itself with effectiveness
before focusing on efficiency. This refers not only to doing something as inexpen-
sively as possible, but actually accomplishing what is appropriate for the society.
Even by the standards of business efficiency, NPM cannot claim to be as success-
ful as most of its proponents would like it to be. There is limited empirical evidence
that NPM reforms have led to any productivity increases or any wealth maximiza-
tion: “several years of attempts and experiences of public management reforms in
western Europe and other OECD countries give evidence of relative failure rather
than success.” The concept of the citizen as merely a customer risks transforming
the citizen into a selfish customer, or “hollowing out the state” and eliminating the
participatory duty of individual citizens, who have the dual roles of customer but
more importantly civic participant. The abolishment of career civil servants, another
proposition of NPM, may lead to administrative capacity erosion and depoliticizing
may lead to de-democratization with the “risk of the return of the imperial bureau-
crat disguised in a modern twenty-first century entrepreneurial bureaucrat: same
power less responsibility and accountability” (Drechsler, 2005a, 2005b). It would
be difficult to argue today against the insight that humans maximize their own
profits and benefits. However, humans do not act the same everywhere; while they
are selfish and pursue their own benefits they are at the same time altruistic and
quite generous. NPM “represent assumptions that one style of managing—whether
in the public or the private sector—is best, and indeed is the only acceptable way”
(Peters, 2001, p. 164).
Perhaps the strongest criticisms and most visible shortcomings of NPM has
come from its implementation in developing newly democratic nations such as
Romania. NPM is predicated upon the preexistence of an objective Weberian
bureaucracy, which is not the case in most developing nations. A number of studies
have shown that it will not properly function in developing or transitional countries
(Bately, 1999; Manning, 2001; McCourt, 2007; Nickson, 1999; Peters, 2001;
Polidano & Hulme, 1999; Schick, 1998). According to these studies, in countries
that lack an established Weberian ethic, “privatization became a popular source of
income for corruption and patronage distribution” (Samaratunge, Quamrul, &
Julian, 2008). The results of this research undertaken in the past decade is that NPM
cannot be an alternative to classic and objective Weberian bureaucracy in develop-
ing nations like Romania. Instead, the research indicates that NPM initiatives only
work if they heavily rely on the type of institutions and social trust that already exist
in classic Weberian democracies. As Nick Manning pointed out the necessity for a
Weberian foundation, “NPM proponents did not see the need to spell out how these
good things had come about—but clearly relied on them to continue as foundations
for their reforms” (Manning, 2001).
NPM is also dependent on professional managers and skillful politicians much
more than the traditional Weberian model of administration. Weber’s bureaucracy
emerged as a model of public administration in a social context that was character-
ized by limited legality and questionable professionalism in public service. The
solution was to make legality the backbone of public administration and ensure the
individual bureaucrat had minimum discretion in applying the law. It offered a
model of public administration which resolved the major obstacle of modernization
at that time. Weberianism emphasized legality, standardization, and a hierarchal
commanding control system and devised a model of public administration that
worked reasonably well in the social and political context of institutional building,
democratization, and increasing public services. Weberianism was an excellent
solution to the lack of trust in public officials and public administration as a whole.
This seems to be the fundamental problem of Romania and other former communist
nations in CEE. There is certainly a problem of low levels of trust in the public
servant and the government. A NPM-style empowerment of frontline bureaucrats in
Romania can prove to be disastrous since they do not enjoy the same level of trust
from their clients and colleagues as in western democracies. The client, or the “cus-
tomer–citizen,” does yet not trust the integrity of the civil servant and may be
tempted to offer a side-payment to ensure positive treatment.
The US public administration tradition certainly has valuable lessons for devel-
oping nations like Romania. As outlined in the first chapter, some authors argue that
globalization is an American construct that in the long-term can and will benefit
Romania and the European Union. However, the timing of NPM implementation in
Romania has been most unfortunate. First, the cultural considerations outlined at
the beginning of this chapter were not taken into consideration resulting in the inter-
national community making many unintended mistakes. Second, it seems that the
realities and the context of Romania were not sufficiently analyzed and understood
before reform initiatives were undertaken. In spite of all the errors of the past, NPM
still presents a viable reform initiative for the future of public administration reform
in Romania.
2.3 Neo-Weberianism and the Revival of Classical

Bureaucracy
New Public Management and the political theory of Public Choice are certainly
public administration philosophies worth considering in the context of Romanian
reform, but they ought not to be considered exclusively. As pointed previously, one
of the fundamental assumptions of NPM is that the administration it is replacing is
a classical public administration bureaucracy, also commonly referred to as a
“Weberian Bureaucracy” named after Max Weber, its originator. Particularly in con-
tinental Europe and in some other parts of the Francophone world, Neo-Weberianism
is seen as a viable alternative to the Anglo-Saxon New Public Management (Cepiku
& Mititelu, 2010; Seabrooke, 2002). Neo-Weberianism is a variation on the classic
public administration theory of western Europe and the Progressive movement in
the USA during the late nineteenth century and early twentieth century. Weberianism,
as it came to be known, was built on an objective, impersonal bureaucracy that had
the following characteristics:
1. fixed division of labor
2. hierarchy of offices
3. rational-legal authority
4. creation of rules to govern performance
5. the separation of personnel from official property and rights
6. selection based upon objective, predetermined qualifications
7. clear career paths (Weber, 1947)
Several authors have proposed a Neo-Weberianism reform initiative as a viable
alternative to NPM, especially applicable to the newly integrated nations of the
former communist block (Cepiku & Mititelu, 2010; Pierre and Rothstein, 2008;
Seabrooke, 2002). They recommend a careful consideration and understanding of
the public administration context before the adoption of NPM. Allan Schick in his
1998 article, Why Most Developing Countries Should Not Try New Zealand’s
Reforms highlights some of the important preconditions that transitional nations
should consider in designing their modernizing strategies and the essential pre-
requisites such as a working free-market sector, contract enforcement possibili-
ties, formalized civil service, a budget system, and a low level of corruption. From
2.3 Neo-Weberianism and the Revival of Classical Bureaucracy 47
Schick’s perspective, “performance is to government what self-actualization is in

Maslow’s hierarchy of needs. Only when basic requirements have been met is the
state ripe to manage for results.”
In Romania, development was pursued in the early 1990s mainly through down-
sizing measures aiming to privatize the public sector and achieve national budgetary
stability. These radical measures benefited from the full support of the international
community and were not necessarily concerned with administrative efficiency and
civil service reform. In those days, reform became synonymous with privatization
and the general anti-Ceausescu sentiment seemed to imply that all that was built in
the previous half century must be eradicated while new institutions and social struc-
tures would automatically build themselves. For instance, the Romanian agriculture
system and its productivity was severely undermined by the fragmentation that fol-
lowed the privatization initiatives of the early 1990s. Unfortunately, no parallel
efforts were made to strengthen and modernize public administrative capacity even
if corruption and inefficiency were acknowledged to impede economic growth and
deter foreign investors and local entrepreneurs. Little was done to create the tradi-
tional, objective and law-abiding bureaucracy that could give government legiti-
macy and create social trust among the people. Even if most institutions were
reformed on the surface, there was little concern or effort for “reform [that] must
penetrate to the fundamental rules of the game that shape behavior and guide orga-
nizations” (World Bank, 2000). In much of the macro-reform initiatives of the early
1990s, the assumption was that there was a strategic plan with adequate coordina-
tion, a stable financial situation, and the necessary and suitable human resources
capacity to transition from communism to free-market capitalism. In reality, that
was seldom the case as synergy among various plans was rarely achieved and the
necessary budgets and expertise were limited at best. Considering those somber
realities, along with the shortcomings of New Public Management, Neo-
Weberianism began to emerge as a viable public administration reform initiative.
Romania was not alone in rediscovering the importance of traditional
Weberianism and its modern incarnation, Neo-Weberianism. The progress and
importance of global economic development and the reduction of transactional
cost—two important sub-fields of political and administrative studies—is giving
traditional Weberian bureaucracy an edge over New Public Management. In
Romania as in other parts of the non-western world, practitioners and theoreticians
alike are discovered that the main goal of government is economic development not
the efficient redistribution of already existent resources. In this context, corruption,
which in economic terms is considered as additional and unnecessary transaction
costs, is the principal barrier that has to be overcome. Although flawed and in
some areas discredited, Weberian bureaucracy may still be a better administrative
philosophy for Romania than New Public Management.
For instance, in the economic development area, there is a dramatic shift in the
types of problems and issues public administration reforms address. The focus is
increasingly on the development of institutional capacity, or “good governance,” as
once again, corruption is perceived to be the fundamental obstacle for economic and
social development (Acemoglu & Robinson, 2008; Rodrik, 2007). Corruption and
its related problems were the first and primary concern of traditional Weberianist
bureaucracy, and the main rational for the creation of an impersonal, objective
bureaucracy (Weber, 1947). The reintroduction of curbing corruption in the eco-
nomic development debate represents a fundamental paradigm shift in public
administration reforms, considering that not too long ago most economists and
political scientists considered corruption a minor and insignificant issue (Henderson,
Hulme, Hossein, & Phillips, 2007). New research has shown its negative impact on
economic development and government illegitimacy and that in developing nations
like Romania, traditional Weberian bureaucracy has to be built first and foremost
(Evans & Rauch, 2000; Kaufmann, 2004; Mauro, 1995). Only through the restora-
tion of trust in public institutions such as courts, government, and the police will
society be positively affected and lead to economic and social development (Kumlin
& Rothstein, 2005). Historically, economic development was predicated upon the
reduction of government corruption, a position that may be best achieved through
traditional Weberian bureaucracy. In 2008, Olsen observes that
the enthusiasm for a universal de-bureaucratization cure and the pressure for global
administrative convergence have diminished since the early 1990s perhaps giving way to a
Neo-Weberian public administration ideology.
Gerring and Thacker in their 2005 article, Do Neo-liberal Policies Deter Political
Corruption? challenge the prominent NPM neo-liberal idea that the size of govern-
ment is the fundamental problem that generates corruption. They show that it is not
so much the magnitude of government, but its quality, that is the truest indicator of
corruption. They state that “we find no consistent relationship between the aggre-
gate size of the public sector and political corruption.” La Porta, Lopez-de-Silanes,
Shleifer, & Vishny (1999) similarly proved that high-quality government carries
with it higher public spending and that automatically “identifying big government
with bad government can be highly misleading.” These and other Neo-Weberian
authors seem to indicate that the quality of the government—not its absence—may
lead to economic and societal development and the reduction of poverty. Several
international institutions engaged in international development have positioned
anticorruption at the top of their agendas and are increasingly recommending varia-
tions of classic Weberian bureaucracy with its precise and unambiguous rules,
merit-based recruitment, personnel that clearly distinguish between their public and
private interests, a salary system that is sufficiently generous to make the official
less susceptible to bribery, and a transparent system of responsibility (Fjeldstad &
Isaksen, 2008).
On the issue of transactional cost reduction, Neo-Weberianism ideology seems
to have been encapsulated in the theory of “Institutionalism” a modern, transdisci-
plinarian development in economics and political science spurred on by the work of
Douglass North. Institutionalism and neo-institutionalism considers the classic
Weberian bureaucracy, with its predictable “rule of law” institutions, as instrumen-
tal in securing property rights and enforcing legal private contracts that guard pri-
vate societal participants against subjective bureaucrats. George Tsebelis in his
1990 book, Nested Games: Rational Choice in a Comparative Perspective, states
2.3 Neo-Weberianism and the Revival of Classical Bureaucracy 49
that only such institutions can truly be labeled “efficient” since they are perceived
by the public as legitimate and are not established for public resource redistribution
from one group to another. Unlike “redistributive” institutions that are generators of
corruption and illegitimacy, the objective and predictable Weberian institution exists
to serve the collective interests of all participants alike, thereby significantly lower-
ing transactional costs for society as a whole. The natural effect of such an environ-
ment is that societal agents can trust each other and the contracts they engage in thus
stimulating increased economic activity. In the inevitable case of a misunderstand-
ing, anyone can turn to an impartial court or another type within a Weberian bureau-
cracy for a predictable, objective legal remedy. Society further has the assurance
that taxes and government regulations are implemented and enforced in an objective
manner, without giving improper advantage to some because of their personal con-
tacts or their ability to pay a bribe.
Danny Rodrick in his 2008 article, Second Best Institutions, points out that “the
encounter between neoclassical economics and developing societies served to
reveal the institutional underpinnings of market economies" often taken for granted
by NPM theorists. Developed, western nations have historically developed a system
of property rights, effective regulations that prevent monopolies, uncorrupted gov-
ernment, the rule of law, and a social welfare that can accommodate risk. Rodrick
further points out the importance of informal societal institutions such as families,
religious organizations, and voluntary associations that contribute to social cohe-
sion, social trust, and citizen cooperation in developed nations. Neoclassical eco-
nomics take the presence and significance of such institutions for granted, but “there
are social arrangements that economists usually take for granted, but which are
conspicuous by their absence in poor countries” (Rodrik, 2008). This nuance is
perhaps most overlooked in the reform efforts of the European Union, the IMF and
the World Bank in Romania. I will argue that the civil society generating a univer-
salist culture in western nations is actually even deeper than Weberianism itself.
From a purely chronological perspective, before western public administration
reformers “discovered” the benefits of an impersonal bureaucracy they were work-
ing with a universalist culture and enjoyed an educated and demanding middle-class,
schooled, and tried in micro- and macro-democratic activity. Unfortunately for
Romania both the civil society and the middle-class are only now forming and
democracy does not have a long heritage in the Romanian psyche. Ironically, as
western public administration scholars busily and accurately point to the shortcom-
ings of traditional Weberian bureaucracy, a diametrically opposed perspective is
taking root in institutional theory and development studies. The classic Weberian
bureaucracy and its Neo-Weberian incarnations are viable public administration
reform alternatives for Romania so they can bring stability, legality, and continuity.
In that sense, all developing countries with “soft” institutions, limited education
for their public servants, and/or low levels of institutional trust might consider
Neo-Weberianism as a building block before adopting NPM.
Finally, the Weberian alternative is not limited to creating economic growth and/
or lowering transactional costs, but more importantly it is vital to safe-guarding
Romanian democracy. The relation between a healthy public administration
bureaucracy and democracy is best captured by the National Endowment for

Democracy a US-based think-tank and one of its founders Larry Diamond, one of
the most prominent scholars in the field of democracy studies, who stated: “there is
a specter haunting democracy in the world today. It is bad governance… Governance
that is drenched in corruption, patronage, favoritism, and abuse of power” (Diamond,
2008). He seems to suggest that pathological bad governments cannot be cured with
more democracy assistance given the deep level of endemic corruption; but instead,
he suggests that what is required is a “revolution in institutional development”
which coincidently was Weber’s recommendation for the bad governance of his day.
Even as classic Weberian bureaucracy is losing its luster in the developed world, it
is becoming paramount in the understanding of reforming developing economies.
Weberian democracy is a reform model of public administration in a political and
social setting where trust in institutions and public officials is low. With its focus on
legality, hierarchy, and impartiality, Weberian essentially allows the citizens to
engage the state without the need to trust its officials, since those officials have
minimum latitude and discretion as to the administration of state matters. To sum
up, Neo-Weberianism is:
• A shift from an internal orientation of bureaucratic rules, toward an external
orientation in meeting citizens’ needs and wishes. The primary method to accom-
plishing this is not by employing market mechanisms, but by creating a profes-
sional culture of quality and service within the government.
• The supplementation of the role of representative democracies by a range of
devices for consultation with the direct representation of the citizens; in the man-
agement of resources within the government, a modernization of the relevant law
to encourage a greater orientation on the achievement of results rather than the
correct followup of a procedure. This is expressed partly in a shift to the balanced
from expert control, but not the complete abandon of the former.
• The modernization of public services, so that the bureaucrat becomes not simply
an expert in the laws relevant to their sphere of activity, but a professional man-
ager oriented to meeting the needs of the citizens.
2.4 Digital Government (e-Government)
Having outlined the two major public administration ideologies that future
Romanian reformers will have to contend with, at this point I would like to turn to
the issues of technology, particularly information technology, as it applies to public
administration. “Digital government” or “e-government” refers to the business of
public administration as it is affected by modern communication and information
technology. In my previous work, I outlined some of the technological advance-
ments that ushered in the current era of globalization with its turbo changes and
unpredictability. Inevitably, the same communication and information technologies
that transform major economies and connect new countries such as Brazil, Russia,
2.4 Digital Government (e-Government) 51
India, China, and South Africa (BRICS) to the world economy have a profound
effect upon public administration and its future. Most authors argue that digital
government is not a separate public administration ideology, but rather a comple-
mentary or a support system that can be utilized by both NPM and Neo-Weberianism
(Khalil, Lanvin, & Chaudhry; 2002; Norris, & Lloyd, 2006; West, 2004). Given that
the technological revolution of the past two decades changed the “rules-of-the-game”
in most areas of life, it is my belief that e-government requires a special even if brief
section in my research.
In the 2005 article, New Public Management Is Dead—Long Live Digital-Era
Governance, Dunleavy, Margetts, Bastow, and Tinkler rightfully assert that the fun-
damental development in current public administration reform is the system’s man-
agerial and cultural transformation as a response to new technology and society’s
expectation of its utilization. Naturally, Dunleavy et al. state that innovation in
information technology and its impact on public administration is not a recent phe-
nomenon. Starting with the 1960s, the first wave of automation with mainframe
computers and photocopy machines abolished thousands of bureaucratic positions,
with following technological waves producing additional savings and transfor-
mations to the business of public administration. However, the information and
communication innovations that occurred before 1989 had a limited impact upon
public administration organizations and ideology. Automation equipment was
simply adapted by public administrators on preexisting organizational cultures and
structures without significant adaptation or transformation. Routine functions were
automated and/or mechanized; therefore organizations tended to downgrade their
importance for managerial performance. Even though governmental agencies
became highly dependent on their IT infrastructures such as mainframe databases,
telephones, faxes, microfilms, etc., those technologies did not shape the organiza-
tion (Bertot & Jaeger, 2006; Moon & Norris, 2005).
The fundamental transformation that took place in the 1990s, at the time that
Romania was transitioning to a free-market economy, was the growth of the internet,
e-mail, websites, e-commerce, e-informing, blogging, wireless hand-held devices,
etc., that enabled individuals and organizations to be constantly informed and
connected. Those technological advances profoundly affected both the internal pro-
cesses of public administration, but most significantly it transformed its interaction
with the public, mass media, and special interest groups. In effect, the 1990s “digital
revolution” significantly and irrevocably transformed the scope and shape of tradi-
tional governance and political life (Franda, 2002). Digital government refers to the
digitalization, storing, and transferring of all information to a virtual space, a capac-
ity that was not possible with past technologies. Current technological capabilities
enable government to transition from traditional paper and plastic, confined by geo-
graphical space and operating hours, to a fully digital operating system that is inter-
connected and can be accessed from anywhere in the world at any time. These
technological innovations are now the omnipresent and structurally distinctive
influences on governments. The information age that has engulfed society and busi-
ness has produced “digital-government” and triggered numerous systemic transfor-
mations such as a large-scale switchover to e-mail for most communication; reliance
on websites and intranets; electronic services and e-informing; electronic

procurement and payment systems and a transition from paper to electronic record-
keeping (Jaeger, 2003; Layne & Lee, 2001).
According to Morgeson & Mithas’s, 2009 article, Does e-government measure
up to e-business? many of the influences and creations of digital government have
been incorporated from private sector industries like banking, insurance, travel,
media, and electronic merchandise, which have been radically transformed in the
past two decades by the advent of the new technologies. As consumers and corpora-
tions in the private sector change, there are direct demands placed upon govern-
ments to respond accordingly; the delay is considerable, but the transformation is
inevitable. According to the 2008 The Economist special report, “The Electronic
Bureaucrat,” nothing has impacted governments quite as significantly as the trans-
formation that information technology has brought to what used to be called “the
4th branch of government”: mass media. On one side, traditional reporting is in a
steady decline given the change in people’s new habit of reading the news online, on
the other hand there is the appearance of powerful and influential micro-corporations
such as Google, Facebook, and Wiki-leaks who compete with governments for
legitimacy and influence. In the future creation of digital government, public admin-
istration reformers ought to aim at their governments to have three distinct charac-
teristics: to be properly integrated, simplified/transparent, and fully digitalized
(Dunleavy, Margetts, Bastow, & Tinkler, 2005; Kolsaker, 2007; Moon & Norris,
2005; Tolbert & Mossberger, 2006).
The first aim of digital government is adequate integration of the essential
elements of governments that are separated into distinct corporate hierarchies or
offloaded to various private sectors. This has mainly to do with the internal inter-
working of public administration and is best-suited for governments in developed
nations that have undergone significant NPM transformations. Reintegration is not
a simple return to the old centralized and sometimes inefficient government: rather,
it seems to attempt achieving cost efficiency without privatization and fragmenta-
tions. It outlines the activities that can now be performed better and cheaper by
public administrators due to the new technology available to them. According to
Dunleavy et al. (2005) there are eight main integration components to integration:
1. Joined-Up Governance (JUG) is essential in the reintegration efforts of frag-
mented and sometimes competing government agencies, and is focused on the
creation of one major infrastructure that can be utilized by multiple governmen-
tal agencies. It refers to the digital centralization and proper coordination of
multiple, related agencies (Kiu, Yuen, & Tsui, 2010).
2. Re-Governmentalization involves the re-absorption into the public sector of
activities that have been previously outsourced to the private sector.
3. The establishment of central processes since agencies as susceptible to “bureau-
maximizing” agencies and/or private contractor risk of duplicating someone
else’s efforts. New information and communication technology allows for
easy and accurate monitoring among similar contractors and/or government
agencies.
4. Squeezing process costs is an essential component of government reform

throughout the western world given the fact that most governments are experi-
encing significant budget crisis. Most of the changes involving squeezing pro-
cessing costs through cutting back-office staffing and replacing them with
automated systems and shifting the human resources to frontline staffing.
5. Reengineering back-office functions with the aim of realizing productivity gains
offered by new technology. Consolidating outdated technology, such as main-
frames, that were introduced separately.
6. Business process systematization may be undertaken by the agency or outsourced
on its behalf. It is possible to either have a single IT contract with a single system
integrator, or with a cooperative multi-team effort.
7. Procurement concentration and specialization where all public auctions and
government procurement contracts must be made public, online with the exact
specifications.
8. Network simplification to reduce the tendency of various bureaucratic agencies
and/or departments within a public administration system to build and maintain
duplication of efforts and an unhealthy interdepartmental competition.
The second aim of digital government is to transform, expedite, and improve the
interaction among various governmental agencies and its citizens. In the case of
Romania and other developing nations grappling with corruption and particularistic
tendencies, transparency in government also has controlling and verification utiliza-
tion. For instance, public officials are supposed to publish their wealth and income
statements, all public jobs are auctioned publicly and results of one department can
be easily compared with those of another, similar department. Beynon-Davies in his
2005 article Constructing electronic government, states that the creation of a
transparent yet more efficient government requires end-to-end reengineering, the
elimination of unnecessary tasks, steps, checks, forms, and most importantly costs.
Transparency and the intentional comparison will in turn pressure public adminis-
trators to become more entrepreneurial, agile and respond speedily and flexibly to
the challenges of globalization. The starting point of this new form of public admin-
istration is not the traditional capability or what can be done, given our limited
resources, but rather what needs to be done as expected by our citizen. Ideally, if the
initiative of making the government more transparent with the aid of modern com-
munication technology is achieved, a delicate balance can be created between the
“citizen as a customer” and “the citizen as a contributor.” These seemingly opposite
perspectives held by NPM and Neo-Weberianism could be reconciled. The needs
and responsibilities of the citizens—which now can be easily, accurately, and inex-
pensively tracked—will become the guiding principles for the design and function-
ality of a genuinely citizen-based, services-based, and needs-based government
(Bertot & Jaeger, 2006; Rawajbeh & Haboush, 2011).
This “citizen–client” realignment that a transparent public administration would
generate, entails reevaluation and perhaps reorganization of both the internal organi-
zational structure as well as motivational mechanisms for traditional government
bureaucrats. In the view of some authors, it is quite inevitable given the technological
tools available to the general public and their level of expectation since “history
suggests that substantial improvements in public services stem from broader forces
in society—from political movements and community action” (Hambleton, 2004).
The following is a list that Dunleavy et al. (2005) outline as necessary to achieve
government transparency in the era of digital government:
1. Citizen–client-based reorganization. Unlike traditional government in both
Weberian bureaucracy or NPM where the government services were built around
a specific bureaucratic function, like passport services for example, a citizen–
client-oriented service is built around a single citizen type such as students or
pensioners.
2. One-stop shop. If the public administration will no longer be built around a pro-
cess but rather around a single citizen–client group, the purpose would be for
that citizen to interact with as few entities and individuals as possible who would
be qualified to service his/her specific and personalized needs. This may be a
cluster of offices located in geographical proximity or an online website.
3. Single information provider. Similar to the one-stop shop, under the single infor-
mation provider all the information of one particular citizen–customer would be
located in one location, preferably in a digital format. This is predicated upon
the government commitment to share the citizen–client information and ensure
security.
4. Data warehousing and mining. This initiative refers to the utilization of histori-
cal citizen–client data so that patterns can be noticed and preventative action be
taken. This has the potential of significantly increasing satisfaction of citizens’
interaction with their governments, while drastically reducing the costs of ser-
vices. Using feasible research algorithms, agencies can match their services to
meet the citizens’ needs and influence them toward the optimal use of govern-
mental resources (Teo, Srivastava, & Jiang, 2008). Data-mining may sound
simple and inexpensive but in reality it is difficult since most agencies store
information in different and incompatible information systems making search
and matching difficult and expensive.
5. Integral service reengineering. This initiative toward government transparency
stresses the necessity for a holistic and integral process design that reduces the
artificial barriers that may exist among the various layers of government and the
various agencies.
6. Agile government processes. These focus on achieving speed, flexibility, and
responsiveness that allow government resolutions to compete with best practices
in the business sector (Dunleavy, Yared, & Bastow, 2003). The demand for agility
comes from the private sector where agile management has already been adopted.
Agile government is a public management and/or a decision-making system that
is capable of quickly reconfiguring to changing needs and responding to a volatile
and turbulent external environment (Carter & Bélanger, 2005; Polsby, 1984).
Information technology offers significant productivity gains but most importantly,
it requires significant organizational changes to take place. Digital government
cannot be seen as an appendix or an after-thought to public administration reform;
instead it must become essential, moving away from traditional bureaucracy toward
where “the agency is becoming its website” (Moon & Norris, 2005; United Nations,
2010). This third major component required by the digital government era is related
to the impact of the internet with its websites and web-services, emails, social media,
and the plethora of hand-held devices that citizens can utilize to access information
captured under the label e-government. The major risk of digitalization is to over-
hype technological improvements, with surprising levels of credibility given to gov-
ernmental CIO’s (chief information officers), IT corporations, or industry interest
groups (Atkinson & Leigh, 2003; Carter & Weerakkody, 2008). In fact, the major
impact of digitalization is not achieved through technology acquisition but rather
by internal cultural changes and a significant behavior shift by society as a whole
(Margetts & Dunleavy, 2002). There are the following components required by com-
plete digitalization as outlined by Dunleavy et al. (2005):
1. Electronic services delivery (ESD). Refers to the complete conversion of paper-
processes to digital ones. Government has adopted ambitious programs and
targets but the main constrain has been the slow adoption by their citizens of
e-services. Household internet access is increasing so we can safely expect ESD
to grow as well.
2. Zero touch technologies (ZTT). Are forms of automatic processes utilized in the
private sector where no human intervention is needed in sales or service offering.
Naturally, there are huge areas of potential application in a well-designed and
user-friendly system in governmental agencies for ZTT.
3. Disintermediation. Refers to the potential to eliminate the traditional govern-
mental gatekeeper. Naturally, a web-based automatic system needs substantial
back-up and help-desk systems, but the most innovative quality of this interme-
diation change is that societal participants who know and understand their own
situation are able to automatically shift and select among governmental sites.
This disintermediation process will only be accomplished when citizens will
change their behavior in line with the shifts made by governmental agencies.
There are two main ways to accomplish this: stimulate people to switch by
providing e-services at lower costs and greatly improve functionality thus com-
pelling people to change.
4. Government coproduction. This entails a shift from “agency-centered” to
“citizen-centered,” where citizens run or coproduce their interaction with
government. “Isocracy” is self-government beyond simple disintermediation; it
reflects the importance of volunteering and self-compliance with governments.
Coproduction involves citizens partly producing outputs with the government
using electronic processing and leaving agencies to provide only facilitating
frameworks (Akman, Yazici, Mishra, & Arifoglu, 2005).
5. Open-book government refers to a radical shift from “closed-file government”
employed by traditional bureaucracies toward allowing citizens to actively man-
age their own accounts. Creating data protection and freedom of information is
critical in pursuing public opinion to accept and utilize such changes.
The 2010 UN e-government survey report, Leveraging e-government at a time of

financial and economic crises, encourages governments worldwide to consider the
financial benefits of e-government. In the case of Romania, the digitalization of
government has had a profound impact and is a central part of the Europeanization
process. The incorporation of “information and communication technologies”
(ICT) in all aspects of public administration has been a crucial element in the mod-
ernization and corruption curbing efforts of Romania (Colesca & Dobrica, 2008;
Nita, 2011). The European initiative that describes the digitalization of public
administration is known as “transformational government,” a label borrowed from
the 2003 British initiative, “Transformational Government Enabled by Technology.”
As stated in previous chapters, the European Administration space is committed to
continuous improvement, efficiency, effectiveness, and citizen-centered. Transfor-
mational government is the European e-government reform initiative that enables
public administration standard verification and reporting, the minimization of
bureaucratic burdens on citizens and businesses, and which utilizes the opportuni-
ties offered by ICT. Internally, it promotes the transition toward a learning organiza-
tion, innovation, and modernization and aims at increasing value-added delivery
(Brown, Massey, Montoya-Weiss, & Burkman, 2002; Archmann, 2010).
According to Hefley, Murphy, Meyer, Vogel, and Mehandjiev in their 2012 arti-
cle, An End-User Friendly Service Delivery Platform for the Public Sector in Case
Studies in Service Innovation, technology is the key enabler for the modernization
of public administration in the European Union. Although much progress has been
made in the past two decades, proper digitalization of government services is still
not complete. In the case of Romania, proactive attitudes and leadership are the
main factors required both for internal governmental transformation and for an
increase in the citizenry’s use of digital government (Nita, 2011). Conventional wis-
dom among e-government enthusiasts states that the digitalization of government
services will accomplish:
1. A severe reduction in the overall public administration budget;
2. A significant increase in the quality of services and interagency collaboration; and
3. An increase in citizens’ overall satisfaction with their European and national
governments (Mithas, Morgeson, & Van Amburg, 2011).
For these and other reasons many public administration reformers see the future
of governance in the digital area and the European Union is actively stimulating
“e-inclusion” and “e-skills” (Hsieh, Rai, & Keil, 2008).
2.5 The Limitations of Current Reform Initiatives
New Public Management (NPM) and Neo-Weberianism, along with the modern
tools made available through e-government are viable and laudable public adminis-
tration reform instruments, and Romania along with European students, practitio-
ners, and pundits of public administration ought to excel in the understanding of
2.5 The Limitations of Current Reform Initiatives 57
their nuances and implementations. However, as valuable as these instruments may

be, they are intrinsically limited. First, the current public administration system was
designed in a different era and for a different purpose. The late nineteenth/early
twentieth century when the classic Weberian bureaucracy was born, was a signifi-
cantly different world, with vastly different challenges than the twenty-first century
we reside in today. The inertia of the Industrial Revolution along with the advances
in medicine gave western Europe and the USA a significant economic and demo-
graphic advantage over the rest of the world (Kennedy, 1987). As an enhancement
to the growth of their economies, the West was still enjoying the economical fruits
of a colonial era. To most classic public administrators—theoreticians and practitio-
ners alike—redistribution and social justice were the main concerns, not economic
growth. During that time, there was limited transparency of information, without
24 h news cycle, wiki-leaks and Facebook to start revolutions and coordinate gov-
ernment protest. There were no rating agencies and international bond markets to
dictate national budgets and the movement of the people was quite limited. Over the
past century most development in public administration thought and practice has
been toward making the state a better social-democracy. Each nation added their
own particular flavors ranging from the extreme cases of communism in the Soviet
Union and China, to the more individualistic models of the Anglo-Saxon world.
NPM, the invention of the English-speaking world is a variation on the classical
bureaucracy that attempts to introduce competition and private initiative into the
equation, but does not veer very much from the classic character of government
which is essentially a redistribution mechanism.
As I stated earlier and will develop in my subsequent arguments, the twenty-first
century differs significantly from the late nineteen/early twentieth century. With a
certain degree of caution, it can be stated that western Europe and the USA have
accomplished their goals and are enjoying somewhat successful social-democracies,
but the new mantra of government is no longer to redistribute already existent
wealth, but rather to create it. This is an antagonistic environment where most west-
ern governments have high-debt burdens, declining populations, and non-western
competition. The same can be said about Romania, who is perhaps in an even more
disagreeable situation, not having the traditions and the institutions of its western
counterparts. It is for this reason that any and all public administration reforms
ought to be carefully considered and all details and nuances taken into account.
After two decades of somewhat externally imposed NPM reforms, it would be
a lamentable mistake to simply adopt Neo-Weberianism and the underlying
e-government without adequate contextualization.
2.5.1 Bureaucratic Efficiency that May Suffocate Democracy
The first significant limitation of public administration reforms that I would like to
highlight is the intrinsic tendency of efficiency in public administration to stifle
democracy. If democracy may be imperil in western societies given the citizens
apathy and their low participation, in the case of Romania there are added concerns
given the lack of historical democratic traditions and the limited role and implica-
tion of the civil society. I would point that simply making Romanian public admin-
istration more efficient, regardless of the instruments, would be a wasted historical
opportunity if the democratic spirit and individual responsibility would not develop
along with it. My hypothesis is not simply theoretical or utopian, but rather quite
pragmatic. Unless democracy and individual responsibility will increase, there is a
danger that whatever public administration reform Romania would undertake will
be short-lived and only on the surface.
Goerdel, Nabatchi, and Peffer point out in their 2011 article, Public administra-
tion in dark times: some questions for the future of the field, that even in developed
nations with long democratic traditions, modern public administration has embraced
the bureaucratic philosophy at the expense of the democratic one. There has always
been tension between a “democratic ethos and a bureaucratic one” with bureaucracy
naturally suiting public administrators and their political masters (deLeon &
deLeon, 2002; Pugh, 1991; Woller, 1998). Bureaucracy entails predictable and con-
trollable values such as hierarchy, efficiency, expertise, and loyalty in contrast the
messy and slow process of democracy. As previously mentioned, the European
Union was birthed and enlarged in a partially bureaucratic manner with limited
democratic participation. Romania has both a non-democratic history and a com-
munist experience where the elites perceived the general public as unqualified and
ill-equipped for major democratic decisions. The past two decades of muddled
democracy and disqualified politicians risks reinforcing this tendency both in the
European Union and the Romanian public administrators at the expense of a demo-
cratic society. My observation is that, regardless of how efficient or European the
Romanian public administration system will become, if it is not built on a demo-
cratic and participatory society, it will not be sustainable in the long-run and will not
be fit to respond to the future challenges of the twenty-first century.
The building of a democratic ethos in public administration is a significantly
older ideology, but substantially more difficult to articulate and research than
modern bureaucracies. A feeble attempt was made in the 1960s at the Minnowbrook
conference, by the Public Choice scholars who adequately and accurately pointed to
the short-coming of traditional Weberianism. Gary Woller in his 1998 “Towards a
Reconciliation of the Bureaucratic and Democratic Ethos” rightfully states that the
“democratic ethos remains more eclectic and less clearly defined than its bureau-
cratic counterpart.” He points out that:
the democratic ideology in public administration is an outgrowth of many public adminis-
tration scholars’ dissatisfaction with the narrow normative prescription of the bureaucratic
ethos (Woller, 1998, p. 114)
The intrinsic limitation of the bureaucratic ideology is that public administration

can be “inhumane, unresponsive, and democratically unaccountable” (Warren,
1993) and it would not include “claims of transcendent purposes and moral commit-
ment to community building, or of enhancement of freedom and dignity and the
improvement of the quality of citizens’ lives” (Wamsley et al., 1990, p. 4). The keen
observation of democracy ideology scholars was that:
public administrators cannot be value neutral servants of the public will … and that admin-
istrative behavior should be grounded principally on … higher order moral principles
embedded in the notion of democratic government (Woller, 1998, p. 86).
The democratic ideology in public administration is built on a different set

of norms and values, like “constitutionalism” and “regime values” (Rohr, 1976);
“citizenship” and “public interest” (Lippmann, 1955); “social equity” and “jus-
tice” (Rawls, 1971; Frederickson, 1989), etc. Not being instrumental (based on
consequences, but rather on principle) this public administration framework guar-
antees its continuity through deductive reasoning grounded in political philoso-
phy and history (Pugh, 1991). The democratic ethos is predicated upon careful
and vigilant attention to the values of the structures and administrative processes,
specifically as they pertain to public dialogue, social inequities, access to the
political process, and justice. It forces the public administrator to “be open and
honest about the relevant value trade-offs and why they chose as they did, so that
the public may express its approval or disapproval through accepted democratic
channels” (Woller, 1998, p. 100).
Most importantly for modern public administration reform in Romania, the dem-
ocratic ethos requires public administrators to promote and maintain civic education
and democracy cultivation among the citizenry. The democratic ethos scholars
believe that public administrators have a responsibility “to educate, that is to say to
inform, to impart knowledge, to increase citizen comprehension of (and apprecia-
tion for) the humanistic imperatives of democracy” (Gawthrop, 1998). Denhardt in
her 1991 article, Unearthing the moral foundations of public administration, claims
that true public administration reform is:
an alternative style of management aimed not at control but rather at assisting individuals
(members or clients [of public organizations]) in discovering and pursuing their own devel-
opmental needs, even recognizing that these may sometimes be at odds with those of the
dominant values of the bureaucracy (Denhardt, 1991).
Unfortunately, this is not a common job description for Romanian public

administrators and the civic educational initiatives in Romania for the public
administrators and the citizenry are conspicuous by their absence. Prominent phi-
losophers ranging from Aristotle to Thomas Jefferson emphasized both the impor-
tance of civic education and the government’s responsibility to provide it.
Twentieth-century public administration scholars in the West such as Marshall
Dimock, John Gaus, Wallace Sayre, Frederick Mosher, Paul Appleby, and Dwight
Waldo stressed the necessity of integrating classic democratic values into modern
bureaucratic practices. Many public administration scholars such as Bozeman
(2007), Denhardt and Denhardt (2007), Gawthrop (1998), March and Olsen
(1995), Ventriss (1998) stress the importance of democratic values and individual
responsibility, though the sheer magnitude of the bureaucratic impetus and its
tradition is overwhelming. Unfortunately, the political system—from all political
parties and all over the world—continues to thrust public administrators into the
bureaucratic realm at the same time ruthlessly condemning it of being bureau-

cratic, slow, big, expensive, wasteful, etc. (Pugh, 1991; Sulieman, 2003).
Unfortunately, most modern public administration reforms are grounded in
neoclassical economics and form an insufficient business formula as applied to the
public sector. Although the objectives of making government more productive, less
corrupt, more entrepreneurial, and customer/citizen focus are commendable, “zero-
based budgeting,” “management by objectives,” “program planning budgeting
systems,” and “the reinvention of government” mechanisms by themselves will not
be sufficient (Bozeman, 2007). The business-like instruments of public administra-
tion must be complemented by democratic values of the heart, where both public
administrators and the public at large understand and practice the core values of
democracy and citizen responsibility.
The responsibility of public administrators becomes further complicated, espe-
cially in bureaucratic structures like the European Union, where policy conflicts
tend to be transferred to administrative agencies causing bureaucrats to solve com-
plex and divisive political issues. By definition, bureaucrats are bound by adminis-
trative efficiency and the applicability of utilitarian, economic tools and are not
equipped to address complex policy debates that entail democratic deliberation,
public compromise, and creative problem-solving. Ironically, whenever policies
fail, politicians blame the bureaucracy’s inflexibility and inefficiency and vow to
make it more business-like. These vicious circles have perpetuated for the past few
decades in a young and inexperienced democracy like Romania where bureaucrats
are expected to be both business-like efficient and solve complex political, historical
and democratic issues. Neither NPM nor Weberianism is designed and equipped to
encourage the democratic spirit and civic participation in Romania and public
administrators cannot make collective choices, encourage citizen political initiative,
and create the grass-root civic infrastructure. Furthermore, some experts claim that
the bureaucratic tools of modern public administration are perceived by the general
public as inherently undemocratic, generating democracy deficits and legitimacy
issues (Durant, 1995; Meier, 1997; Nabatchi, 2009, 2010). It is safe to conclude that
one of the major limitations of NPM, Neo-Weberianism, and e-government is that
they are all essentially bureaucratic public administration reform ideologies. In the
words of Ventriss (1998), “they are not sufficient (and never can be) to sustain any
substantive credibility or purpose to the role of public administration in shaping
societal affairs.” Therefore, complementary solutions must be identified for the rein-
vigoration of the democratic ethos in governance since that will lead in the long-run
to both efficiency and democracy.
2.5.2 The Objectionable Connection Between Politics

and Bureaucracy
The second limitation of modern public administration reform is the unhealthy rela-
tionship that tends to exist between the elected class (politicians) and the appointed
class (public administrators). This is especially true in Romania’s case where, as
previously mentioned, this is one of the causes of corruption and loss of legitimacy
in the eyes of the citizenry. This phenomenon is not limited to Romania and it can
create a vicious circle where found. Elected officials tend to appoint their cronies to
administrative jobs to reward them for political support and to ensure favorable
governance. Public administrators, especially those who manage to entrench them-
selves in a particularly influential post, play a very active political role with dynamic
decision-making responsibilities. Some authors argue that in modern democracies
the public administrator has become the “de facto” arbiter of political conflict,
undertaking responsibilities that were never intended for unelected officials, while
lacking the appropriate political instruments and training (Goerdel, Nabatchi, &
Peffer, 2011). In observing elected officials and their political parties whose respon-
sibilities are to mitigate societal conflict, Meier (1997) laments that:
the fundamental problem of governance that has generated the continual state of crisis in
political/bureaucratic relationships is that the electoral branches of government have failed
as deliberative institutions; they have not resolved conflict in a reasoned manner.
Given this failure, public administrators have assumed the duty of solving policy
and political conflicts, a responsibility they were not designed nor equipped to per-
form satisfactorily and democratically. This unfortunate political involvement has
grown in complexity and size, creating significant controversy around the exact
role, influence and responsibility of public administrators (Ingraham, 2006; Lowi,
1979; Meier, O’Toole, & Lawrence, 2006). In the case of Romania’s young and
inexperienced democracy with its many changes and alteration, the situation is even
more complex with a large number of people switching jobs frequently between the
legislative (parliament) and the executive (ministerial) branches.
In a democracy, elected officials and political parties are supposed to represent
the will of the people, aggregate collective interest, and peacefully negotiate a mutu-
ally beneficial compromise that can then be transformed into clear public goals and
policy decisions. However, given the polarization of political parties and the politi-
cal process, the deliberative functions of most legislative bodies is deteriorating and
giving way to hostility and gridlock (Lowi, 1979; Theriault, 2008). In most instances,
public administrators have no choice but to intervene in the policy-setting process,
often applying their own ideology to public problem-solving. The motives and the
drivers of political polarizations have been outlined by the Public Choice scholars,
who observed that elected officials have little incentive to invest in issues their core
constituents will not reward or spend political capital on initiatives with limited
payoffs. This state of affairs limits a viable political compromise and the assump-
tion of responsibility among “risk-averse, resource-dependent, and media-
conscious” politicians, conscious of the next election cycle (Durant, 1995). The
natural result is unresolved political conflict, ambiguous and contradictory legisla-
tion, and uninformed selfish goals.
The public administration entrusted to implement the murky political decisions,
often has to make major decisions on important policy matters. In its essence and
tradition, bureaucracy was created as a scientific, objective, goal-oriented organiza-
tions evaluated on accomplishment and efficiency, not to be deliberative institutions
(Meier, 1997; Seidman, 1970). In the case of Romanian bureaucracy, over the years
public administrators have developed informal mechanisms of coping with

contradictory goals, vague policy demands, and inconsistent mandates from multi-
ple sources, foreign and domestic. Naturally, significant reform must take place in
the Romanian and European political sphere, yet given the limited scope of my
volume, I shall not belabor this point extensively. However, a brief discussion
regarding the political situation in Romania would aid our understanding regarding
the fundamental limitation of public administration reforms.
As noted earlier, corruption has been identified as one of the major drawbacks in
the Europeanization of Romania in general, and of its government in particular.
According to Daniel Buti in his 2011 article, What are political parties? Romanian
and eastern European political parties differ from western understanding and tradi-
tions of what a political party is, how it operates and how does it finance itself.
In theory, a political party is a grass-roots organization that voluntarily galvanizes
the will of the people around a specific political doctrine and then democratically
and civically engages political opponents in debate and healthy compromise in
order to win elections. Under this traditional understanding, a political party is a
voluntary, “altruistic and generous organization established for the greater good of
its constituency” (Buti, 2011). Once in power, the objective is to successfully nego-
tiate with the political opponents and/or collation partners those political doctrines
and turn them into concrete policies that neutral public administrators can easily
and efficiently implement. The Romanian political landscape is quite distant from
this idealized version of party politics that in all fairness has perhaps never truly
been put into practice even in western democracies. Romanian political activity of
the past two decades exemplify Anthony Downs’s (1957) theory which states that
political parties are established for the subjective and selfish motives of their found-
ers and members.
The will to obtain and exercise political power is based upon the private interest of party
members. Starting from this point, the existence and the activity of [Romanian] political
parties as well as their interaction with society has a different significance. If individual
interest is the prism through which we view the actions and decisions of party members, the
political party is a group of individuals whose purpose is the obtainment of political power
for pleasure, gain, prestige and influence. Therefore the classic social function of establish-
ing and implementing public policy becomes an afterthought, taking second place to the
private incentive for which they were established in the first place (Buti, 2011).
James Toole, in his 2003 article, Straddling the East–west Divide: Party
Organization and Communist Legacies in East Central Europe, observed the same
phenomenon in most former communist nations where “the institutions built by
political parties in central and eastern Europe in the years following the communist
demise seem to fulfill the personal needs of the political elites rather than the voters
interest.” In 1995, Peter Kopecky raised the question about what type of political
parties were likely emerge in the region and concluded that party membership was
volatile and insignificant, with the fundamental, decisive role belonging to the party
leader. He pointed that the political parties growing in the former communist states
were not necessarily democratic, grass-roots parties lead by a specific political
ideology, but instead driven by personalities and opportunistic circumstances.
As it did happen in Romania, he predicted quite a number of fragmentations and

atypical coalitions along with significant transits of party members among various
parties. They mainly lack the ability to forge sentimental and ideological ties with
the electorate, instead they must rely on the interest of their members. Buti (2011)
identifies the significant difference between Romanian political parties and their
western counterparts:
1. The democratization of post-communist societies is different. The general con-
text of eastern and central Europe in the 1990s was different than western Europe
at the beginning of the twentieth century.
2. The electorate is significantly different. In traditional democracies, the electorate
is consistent and relatively predictable, with slow mutations in political ideo-
logies. In new democracies, the electorate is open, volatile, and unpredictable
lacking strong ideological opinions and causing political parties to behave
differently.
3. The political competition is different where the institutional environment is
unstable and conflicted. Having weak ties with their electorate, the behavior of
political parties does not have to reflect the will of the people, allowing subjec-
tive and chaotic behavior. The political competition tends to be conflict-based
and adversarial, not pragmatic and beneficial.
According to Buti (2011), the Romanian political parties may fit into Katz and
Mair (1995) concept of “cartel-party” since a new political entity was developed
that does not concern itself with connecting the will of the people, bringing it into
the public arena and transferring it into the political-administrative space. A few
possible outcomes of this lack of political enthusiasm are represented by the fact
that over the last two decades, a large percentage of the Romanian population has
chosen to emigrate. Naturally, emigration is a complex issue with multiple causes
that are beyond the scope of my volume or the political-administrative dysfunction-
ality discussion, yet it is an issue that might have been influenced by dysfunctional
political parties. The other issues may be the steady decline in voters’ participation2
and the alarmingly high numbers of executive ordinances and government resolu-
tions that seem to elude normal parliamentary democratic debate.
Finally, and in the view of this author most ruinously, the financing of politi-
cal parties and political campaigns is what distorts and clouds the political—
administrative relation and prevents it from a neutral status. The financing of
political activity and competition, along with the fact that many party élites rely on
their political activity as the basis for their personal income, is perhaps the single,
most significant factor that hinders the reform of public administration in Romania.
The Romanian political parties’ structure and operations are moving away from
voluntary participants and financing and toward paid professionals and government
financing via public administration posts and unreasonable government contracts.
Regardless of stated political doctrine, the Romanian political parties along with
2
Voter participation in parliamentary election is as follows: in 1990—86.19 %; in 1992—76.29 %;
in 1996—76.01 %; in 2000—65.31 %; in 2004—58.51 %; in 2008—39.20 % (Buti, 2011).
their European counterparts finance themselves through the government and the
appointed public administrators are their willing accomplices.
According to Doug Perkins (1998), politicians normally coagulate around finan-
cial resources and perhaps this has been the true motivator behind political party
formations. In a sense, Romanian political parties function as lobby groups whose
purpose is accessing government resources for their members. These resources can
range from simple government jobs all the way to elaborate public–private schemes
where loyal firms receive lucrative government contracts, or where party elites
receive appointments in state-owned companies that can incur debts which will be
later transferred to the national budget. Perkins concludes:
political parties are increasingly dependent upon government resources, moving away from
their voluntary, electorate base. This poses significant alternations to the traditional political
concept, where the loyalty and accountability of the politicians is shifting away from their
voters and onto their financers. (Perkins, 1998, p. 147)
Given this overarching desire for obtaining financial resources from the govern-
ment, we cannot expect Romanian political parties—regardless of their name, tradi-
tion, or supposed orientation—to be concerned with objective, efficient non-corrupt
public administration, nor with the education of the general public on issues pertain-
ing to democratic behavior. Perhaps, as some authors suggest, we may not even call
them “political parties” in the traditional sense of the word. Instead they seem to be:
Organizations that showcase and follow individual interests, utilizing various instruments
and strategies to accomplish their goals with minimal costs. In an economic, social, cultural,
and political context, they may group themselves in “parties” for the sole purpose of accom-
plishing their interest. Absent a separate civil society to counterbalance these instincts, the
dissatisfaction between the governed and those governing is likely to grow. The reality is
that we must begin to deeply reflect about either changing the traditional definition of a
political party, or establishing a viable, socially-acceptable alternative (Buti, 2011).
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Chapter 3
The Business Civil Society and its Impact
on Romanian Public Administration
The reform initiatives of the past two decades in Romania are praiseworthy, and the
incontestable fact is that the state of the economy and the government is signifi-
cantly better now than at the dawn of the 1989 Revolution. The Europeanization of
the public administration is partially successful, especially in the capital city and a
few other urban centers. There are a number of ongoing, successful public adminis-
tration reform initiatives throughout the country, some of which I have outlined in
previous chapters. This continuous work is vitally important and necessary to
improve customer/citizen services, agency design, increase efficiency, and modern-
ize the Romanian public administration. In the concluding chapter of this volume,
I would like to attempt a modest theoretical contribution to the Romanian public
administration reform dialogue, not from a traditionalist bureaucratic perspective
but rather from a libertarian, free-market, somewhat postmodern public administra-
tion theory. My conceptual approach will be that current traditional public adminis-
tration reform initiatives ought to be complemented by the revitalization of the civil
society, individual responsibilities, and voluntary initiatives.
The events that took place in Europe in the past few years—first with the banking
sector causing the greatest crisis since the Great Depression, and then more impor-
tantly with the global financial markets exerting unprecedented influence on nations
such as Greece, Italy, and even the USA—indicate the need for an alternative, inex-
pensive perspective upon public administration reforms. Given the budgetary defi-
cits, low economic growth rates and declining demography in most developed
nations, the traditional social commitments can no longer be honored, less alone
additional investment be made in public administration reform. There is imminent
concern that future government reforms might not come from transparent, account-
able, liberal-democratic political centers of the world, but the faceless financial
markets and nondemocratic, opaque, sovereign funds of the Gulf States and the Far
East. For instance, China is currently the largest bond-holder of US treasury bonds,
a rather dangerous and uncomfortable position for the democratic-liberal govern-
ment in Washington who will sooner or later have to make concessions to its

DOI 10.1007/978-3-319-26997-9_3
72 3 The Business Civil Society and its Impact on Romanian Public Administration
nondemocratic and communist counterpart in Beijing. Romania and the European

Union may be faced in the near future with additional economic challenges such as
the EURO break-up, an anemic economic growth rate, less structural and recon-
struction funds, upside-down demography and uncontrollable and unmanageable
emigration. The recent events in the Arab world will most likely lead to an increase
in emigration, while advances in modern medicine will enable people to live longer
with governments required to finance unprecedented levels of social services.
My fundamental hypothesis is that public administration in the twenty-first cen-
tury must be about wealth creation not just wealth distribution. As I shall outline in
the first section of this chapter, the current government structure, conceived in the
second half of the nineteenth century, assumed economic growth and prosperity as
a natural given. Western Europe and the USA were enjoying the economic fruits of
the Protestant Reformation, the Enlightenment, the Industrial Revolution and
Colonization more or less with little government intervention. Progressive govern-
ment reformers concerned themselves primarily with “fairness of wealth redistribu-
tion” and balancing the abuses of untamed capitalism. During the second part of the
twentieth century, the success of developed societies in western Europe and the
USA were causing negative demographics, attracting nonintegrated immigrants,
and cultivated their populations to overly rely on the state to the detriment of private
business and civic initiatives. My unassuming suggestion is that future public
administration reform should concentrate on the creation of new prosperity and
wealth. Global competitiveness, economic development, poverty reduction, product
innovation, and most importantly, job creation needs to be the mantra of politics and
public administration, not squabbling over ever-decreasing national budgets or
loans from international agencies and sovereign wealth-funds. As a confirmed lib-
ertarian economist who is analyzing public administration through a Public Choice
viewpoint, I am not suggesting the state to replace the private sector in generating
economic prosperity. In spite of recent economic successes of semi-command econ-
omies such as China and Russia, my presumption is that the best generator of pros-
perity in the long-run is still the private sector through genuine entrepreneurial
activity.
In the second section of this chapter, I will outline the dynamic and subtle com-
plexities of an entrepreneurial society that generates prosperity, innovation, and
well-being for its citizens. Entrepreneurial behavior cannot be wished for or legis-
lated, and the past two decades have painfully demonstrated, in Romania and the
rest of the former Soviet bloc, that a functional private sector cannot be created by
exchanging labels on buildings or laws on the books. A truly entrepreneurial private
sector that positively contributes to societal well-being is a result of the national
culture and the social trust that exists among its citizens. Romania, along with other
less-entrepreneurial European nations that possess “less-entrepreneurial national
cultures” (Văduva, 2004) will need to devote additional efforts to increase their
entrepreneurial coefficient. The Institutionalist view, that claims that cultural trans-
formation can be accomplished through a redefinition of institutions (North, 1990)
is predominantly a western theory developed perhaps for minor cosmetic alterations
in the western world. In the opinion of this author, Titu Maiorescu’s theory of “form
3 The Business Civil Society and its Impact on Romanian Public Administration 73
without substance” is more appropriate, where a nation is quick to adopt external

institutions as a defense mechanism to maintain its historical substance unaffected.
Traditional public administration tools, developed in the late nineteenth and early
twentieth century, may prove inadequate and insufficient since they were designed
assuming the preexistence of an entrepreneurial culture.
In the third section of this chapter, I would like to advance the concept of modern
civil society in an attempt to provide modern solutions to the global crises in public
administration. My line of reasoning is that public administration reform ought to
concern itself with civil society reform, since civil society is the premiere generator
of culture, social trust, and entrepreneurial behavior. As stressed in Chapter One, the
new global reality requires entrepreneurial thinking and behavior and it is not pos-
sible to have high levels of entrepreneurial behavior in government and the public
sector without having an entrepreneurial culture generated by an entrepreneurial
civil society. The civil society has a broad-based effect upon society as a whole,
public and private sector alike, and I will argue that both need significant revitaliza-
tion so that Romanian and European society may compete in the twenty-first cen-
tury global arena. In the short-run, the civil society could assume certain government
responsibilities to ease the current and unsustainable financial burdens on govern-
ment. In the long-run the civil society should concern itself with informal civic
education, and the creation and diffusion of healthy national habits and values that
correspond to the demands of globalization and wealth creation. I will outline that
the Romanian citizens seem to be in an “understanding” and “expectation” hollow-
ness. They seem to have a limited understanding of what democracy is and what
rights and responsibilities they have; they seem unsure of what constitutes accept-
able behavior from politicians and public administrators. Oftentimes, individuals do
not seem to comprehend the inherent dangers of social democracies, or what
accountability mechanisms are available to check corruption and ensure efficiency.
They seem to lack basic business knowledge such as what is a free-market economy
and how it operates, and what healthy entrepreneurial behavior looks like and
how it can benefit society as a whole. Previous and current public administration
reforms—particularly coming from the European Union—seem to assume that the
understanding and the practices of these elements are deeply engrained within the
Romanian society, a fact that may not be true.
I will argue that this may be one of the reasons for some of the government
reform failure during the past two decades, since appropriate and socially beneficial
thinking and behavior was assumed, with little concerted and intentional effort
made to foster and cultivate these traits. I believe this may be the missing compo-
nent of current public administration reforms and the Europeanization impetus in
Romania. Individuals seeking and obtaining political office seem to lack both altru-
istic, servant-leadership qualities and the expertise to lead. The bureaucrats they
hire to implement their policies further lack a proper understanding of their role in
society and the positive contribution they could have on society (Trompenaars,
1993). Many entrepreneurs who engage in private enterprise lack the rudimentary
notions of “value creation” and “sustainable global competitive advantage” relegat-
ing themselves to tax evasion or dubious speculative activities (McGee, 2005;
McGee & Gelman, 2009). Finally, the general public has a sense of hopelessness,
not knowing what they can and should do to improve their society with the excep-
tion of emigration (Bleahu, 2004; Sandu, 2007). These are the challenges of public
administration reform and I humbly propose a public–private partnership between
public administration and civil society.
The concept of the civil society must be revitalized and in some cases reinvented.
With a few timid exceptions, European civil society has been replaced by a strong,
socialistic state, while Romania lacks even historical and religious traditions in
active civil society engagement (Di Palma, 1991; Howard, 2003). Further, the past
two decades of democracy has seen the very concept of civil society discredited in
the minds of the Romanian public, either by corrupt business people or politicians
who used it for their own selfish gains. In the fourth section of this chapter, I argue
that there is a positive global trend in the form of “Corporate Social Responsibility
(CRM)” that ought to be contextualized and adopted in Romanian. The interna-
tional business community is observant of the limitations of public administration
and their own negative tendencies, therefore they are more open to jointly solve
societal problems and contribute to the society. Perhaps and lamentably, given the
numerous abuses made by the private sector, left-lining governments may not fully
trust the intentions of the corporations. However, governments and the business sec-
tor—regardless of their innate differences—have more commonalities then differ-
ences, and most importantly they have a common interest. My attempt is to initiate
the dialogue and the research in the exploration of the “Business Civil Society” a
modern concept requiring significant maturing and testing in the Romanian context.
It is my assumption that if public administrators join forces with the private sector,
together they could create this civil society and reeducate the Romanian public
towards a more entrepreneurial behavior that in return will benefit both the govern-
ment and the private sector.
3.1 Modern Challenges to Government Reforms
Historically, “politics and economics were not separated; economics do not exist in
a vacuum and neither do politics. Political systems shape, sometimes control, and
often misdirect economic systems” (Mitchell & Simmons, 1994, p. 16). That, in the
west was conventional wisdom built upon laissez-faire economics, which viewed
the role of government simply as the producer of rudimentary public goods such as
defense, safety, and infrastructure. Historically, the private sector was responsible
for development and economic growth while societal problems such as illiteracy,
healthcare, and sanitation were either ignored or made the responsibility of reli-
gious organizations. The eastern world, mainly agrarian, did not develop a strong
and industrious private sector since most of its economic activity came from agri-
culture and trade through archaic feudal practices. Beginning with the second half
of the nineteenth century, western Europe and the USA simultaneously experienced
unprecedented levels of wealth creation through industrialism and new technologies
3.1 Modern Challenges to Government Reforms 75
such as the railway and electricity. The dark side of this economical explosion was
massive human urban misery, workers abuses, unsanitary conditions, etc. This was
the background that gave birth to modern government, and over the next century it
was shaped, influenced, and responded to the industrious, dynamic, and sometimes
dangerous private capitalistic system.
In the 1920s, “welfare economists” outlined the observable “market failures” and
proposed swift and radical government interventions. The Soviet Union, eastern
Europe, and major parts of Asia took governmental intervention even further to the
communistic extreme of the abolishment of private property and the nationalization
of all means of production. This in a sense significantly reduced and sometimes
eliminated democracy, the private sector and civil society (Kornai, 1992). This pro-
government bias dominated the economics profession and Mitchell and Simmons
express it best in their 1994 book Market Failures and Political Solutions: Orthodoxy,
where they describe the various theories of market failure including externalities,
public goods, imperfect competition, macroeconomic instability, distributive ineq-
uities, and the existence of transactions costs. They articulate the anti-market bias of
welfare economists who advocate “more taxes; price controls; subsidies and tariffs;
penalties for collusion; more controls over private property; and, of course, more
government-directed planning.” Welfare economists are not the only ones who pre-
ferred government intervention. Political scientists had a significant role in creating
an idealized vision of the political process and the benefits of active and big govern-
ments. Dahl and Lindbloom in their 1991 book, Politics, Economics, and Welfare,
argued that special interest groups and government imposed wealth transfers was
positive for the society since “countervailing power centers” can make politics “civ-
ilized, controlled, and limited to decent human purposes.” Public administrators
naturally had an inherently idealistic perspective of government, beginning with
Woodrow Wilson in the USA and Max Webber in Europe, who believed bureaucrats
could become “scientific managers” selflessly serving the public with an objective,
impersonal bureaucracy that guarded prosperity and civility.
Elinor Ostrom in her 1990 book Governing the commons: The evolution of insti-
tutions for collective action offered an alternative to government intervention
through private enterprise and the civil society. She states that “all efforts to orga-
nize collective action, whether by an external ruler, an entrepreneur, or a set of
principals who wish to gain collective benefits, must address a common set of prob-
lems.” The problems she outlined were: (1) Neutralizing free-riding tendencies;
(2) ensuring commitment by all members; (3) negotiating the design and acceptance
of new institutions; (4) Ensuring individual adherence to the rules. Ostrom found
that groups that organize and administer their behavior effectively are marked by
the following:
– Group boundaries are clearly defined.
– Rules governing the use of collective goods are well matched to local needs and
conditions.
– Most individuals affected by these rules can participate in modifying the rules.
– The right of community members to devise their own rules is respected by exter-
nal authorities.
– A system for monitoring member’s behavior exists; the community members

themselves undertake this monitoring.
– A graduated system of sanctions is used.
– Community members have access to low-cost conflict resolution mechanisms.
– For CPRs that are parts of larger systems: appropriation, provision, monitoring,
enforcement, conflict resolution, and governance activities are organized in mul-
tiple layers of nested enterprises.
In all fairness, as early as the 1970s, Public Choice theorists pointed to the pos-
sible shortcomings of the pro-government movement. They did not dwell on the fact
that governments in their essence were erected as wealth-redistribution mecha-
nisms, instead they pointed to the fact that voters in a democracy tended to be “ratio-
nally ignorant,” and selfish special interests were in fact dominating the political
process since democratically elected politicians relied on them for campaign contri-
butions. In a surreptitious and indirect way, public money was used to buy votes
through deficit spending, employing the selfless and objective bureaucrats as will-
ing accomplices with their own perverse incentives. Market failures may exist, but
according to Public Choice theorists, government failures were far worse, with
numerous “unintended consequences.” Central government control of the private
sector may lead to more not less monopoly, consumer protection regulation may
actually harm the consumer, environmental policy frequently degrades the environ-
ment while costing billions, while all macroeconomic instruments can be neutral-
ized by the political process (Buchanan & Tullock, 1962; Olson, 1965). The obvious
conclusion of Public Choice theorists was a return to a more laissez-faire, free-
market system with privatization of government activities embodied by New Public
Management as outlined in Chap. 1. Even if there were significant qualms about its
applicability in developing nations, there was a general acceptance in the west that
the private sector was more efficient and less corrupt than the public sector.
The 2008 global financial crisis however reversed the public’s attitude and trust
in free-market capitalism. The financial meltdown revealed the limitations and neg-
ative tendencies of the private business sector, and most concerning, the absence of
ethical values. The Economist article “Market Troubles” published on April 6th,
2011 quoted a recent study by the international pollster GlobeScan stating that:
faith in the free market is at a low in the world’s biggest free-market economy. In 2010,
59 % of Americans asked by GlobeScan, a polling firm, agreed “strongly” or “somewhat”
that the free market was the best system for the world’s future. This has fallen sharply from
80 % when the question was first asked in 2002. And among poorer Americans under
$20,000, faith in capitalism fell from 76 to 44 % in just one year. Of the 25 countries polled,
support for the free market is now greatest in Germany, just ahead of Brazil and communist
China, both of which have seen strong growth in recent years. Indians are less enthusiastic
despite recent gains in growth. Italy shows a surprising fondness for markets for a place that
is uncompetitive in many sectors. In France under a third of people believe that the free
market is the best option, down from 42 % in 2002.
The solution to the current crises in governance can no longer be a bi-dimensional

approach where the choice is between more business or more government with
complete disregard to the third sector that truly generated the current moral crisis.
May I suggest that a possible problem of both the private and the public sector,
especially in Romania, may be that they both operate with a flawed culture, which
may endorse greed and personal fulfillment over selfless, altruistic behavior.
Considering national budget deficits, economic contraction, and proposed austerity
measures, it seems that both private and public sectors may be open to solutions that
cost less and deliver more. I hope that this timely and necessary search will include
nonlinear approaches such as the revitalization of civil society as a common ground
for combined problem-solving by government and private business. Otherwise, as
noted physicist Albert Einstein puts it society will: “be doing the same thing but
expecting a different result.”
3.1.1 The Aspirations of Future Government Reforms
The general objectives of government reforms may be that government remains

public, transparent, democratic, participatory, and somewhat altruistic and at the
same time efficient and effective. The previous two centuries of government craft-
ing seems to indicate this to be a difficult accomplishment as the natural tendencies
of governments is to lean either in one or the other direction. I will begin by outlin-
ing the research that has been made on the general objectives of government reform,
fully aware that they are almost universally accepted. The challenge usually comes
with the implementation and execution of those objectives.
Francis Fukuyama in his 2004 book, State-Building: Government and World
Order in the 21st Century, outlines the general philosophies and objectives in gov-
ernment and public administration reforms. He artfully articulates the fundamental
components of a healthy and functioning government, even if he remains vague on
the implementation mechanisms. In assessing government privatization in former
communist nations—the experience that produced current Romanian governance
normality—Fukuyama properly outlines the strategic blunder that took place:
The problem for many countries was that in the process of reducing state scope they either
decreased state strength or generated demands for new types of state capabilities that were
either weak or nonexistent. While the optimal reform path would have been to decrease
scope while increasing strength, many countries actually decreased both scope and strength
(Fukuyama, 2004, p. 199)
In the case of Romania, the privatization of state-owned enterprises was the

appropriate course of action, yet the process necessitated significant “institutional
capacity,” which was understandably absent in the early years. Unfortunately, its
development was severely delayed and most privatized assets did not end up in the
hands of entrepreneurs who could make them productive, but in the hands of
oligarchs who underutilized them and “delegitimized” the state in the process.
In retrospect, we may agree with Milton Freidman who stated that “the rule of law
is probably more basic than privatization. Privatization is meaningless if you don’t
have the rule of law.1” Formal institutions, regardless of their origins, will be limited
1
Robert Pollock, in In the Middle East, Arbitrary Government Feeds Rage, the Heritage Foundation
website (2002).
in their efforts to increase institutional capacity unless complemented by informal,

yet intentional initiatives to transform the culture’s understanding of basic notions
such as public property, private initiative, and corruption.
Fukuyama outlines the general institutions that must be present in a state so that
it may function properly and adequately respond to the challenges of the twenty-
first century. First, he begins by stressing the necessity for a predictable, unselfish,
and stable political system, while acknowledging the difficulty in designing an
appropriate one given the varying cultural, historical, and geographical contexts.
The theory for institutional design is quite limited and there are a few universally
applicable principles such as freedom and democracy given the complexity and
dynamism of most nations. Second, the nature of the state must be a legitimate one,
with the main source of legitimacy stemming from democracy (Huntington, 1968;
Zakaria, 2003). A legitimate state is transparent and efficient, created to serve the
general public instead of just a select few. Democracy also impacts economic and
societal development (Przeworski, Limongi, & Alvarez, 1996). Democracy and the
legitimacy it generates are the best institutional checks against incompetence and
corruption, since terrible leaders can be voted out without a destructive revolution.
The third building block of a healthy state is therefore a national democratic
culture with deeply engrained industrious norms and values. According to
Fukuyama, a nation’s culture has the most significant impact upon the quality of its
life and government. The level of trust that exists among its people, the absence of
corruption, the quality of its public institutions, the quality of its education, health-
care, and other social services, are all directly determined by the nation’s culture, or
what he calls its “acceptable normality.” Romania’s reform initiatives cannot afford
to miss this important aspect of state-building since “culture determines both the
type of institutions a nation has and the type and quality of institutions the popula-
tion expects” (Fukuyama, 2004, p. 53). In Romania’s case, formal institutions have
been the focus of Europeanization and modernization with less emphasis on passive
instruments used in developing the informal culture upon which all formal activity
is predicated. The formal institutions can be changed through public policy and
external shocks, but culture is mainly transformed by civil society with difficulty,
time, and effort through religion, education, leadership, interaction with other soci-
eties, and national mass-media efforts (Fukuyama, 2004). Formal institutional
development and reform seldom take place without a strong external demand since
any political and societal rearrangement produces winners and losers who will
defend their positions. This process may occur more quickly through external
shocks, but more successful and sustainable reform appears as a result of strong,
coherent, and consistent internal demand.
It is precisely this internal demand that Romanian business civil society can cre-
ate and nurture. I argue that reform initiatives ought not concentrate exclusively on
the adoption of borrowed legislation and institutions. The true challenge of
Romanian public administration is to forge its own identity by revisiting informal
institutions and reforming cultural values and norms that generate acceptable
behavior for politicians and bureaucrats alike. Romanian public administrators will
eventually bring their own contribution to the European administrative space.

This is a space that does not require additional formal institutions and bureaucratic
rules, but could benefit from a reminder on the importance and vitality of informal
institutions such family, church, and the voluntary community that would generate
personal responsibility, entrepreneurialism and other such values and norms that
would enhance the European position in its global competition.
3.1.2 The Hindrances to Modern Government Reforms
The Economist’s special report on governance, Taming Leviathan: A Special Report

on the Future of State, published on March 19th, 2011, outlines the modern hin-
drances to public administration reforms. The report concludes that traditional, for-
mal reform mechanisms are insufficient for the challenges that lie ahead for global
government reformers. The administrative issues that must be reformed are intrinsic
and chronic since they developed slowly and silently over the past century. In addi-
tion, the government construct we have today—both administrative and political—
was developed in a different age and served a different era. The western world at the
end of the nineteenth century and the beginning of the twentieth was mainly con-
cerned with wealth redistribution, taking its creation as a natural given. Western
Europe and America enjoyed the fruits of the Industrial Revolution and Colonialism
with positive economic growth rates and a young population. Politicians, following
Bismarck’s example, incessantly developed the welfare state with expenditures in
childcare, education, healthcare, pensions, infrastructure, etc., leading to a level of
expectation in the psyche of the citizen that could eventually be fulfilled only with
heavy governmental borrowing. In the nineteenth and the twentieth century, the
dynamics of emigration were significantly different; emigrants represented a cheap
and industrious work force, attracted by opportunities not welfare programs, and
were eager to be quickly integrated into their newfound homelands.
The reality today is quite different: the immediate problem of western govern-
ments, including Romania’s, is the financial and economic crises where the average
debt burden in developed nations is at around 100 % of GDP. This was generated by
unsustainable government expenditures slowly accumulated over time, and at the
same time by an anemic economic growth rate that did not generate sufficient tax
revenues. Over the past century there were attempts by governments to generate
economic growth through the nationalization and management of major sectors
in the economy like energy, mining, transportation, etc. However, as the failed
Communist experiment indicates, governments are not particularly efficient and
profitable managers of state-owned companies. Many economic agents erected and
given preferential treatment to positively contribute to the government budget
required heavy subsidizing instead, which drove deficits further into debt. Having
only a bi-dimensional administrative paradigm at their disposal, the national politi-
cal leaders at the behest of international organizations naturally, and sometimes
justifiably, reacted with deep budget cuts without any consideration to increased
productivity and efficiency. Under center-right political leadership, the European

mantra has been cuts in salaries and benefits, while the newly elected center-left
governments propose a halt to budgetary cuts and an increase in tax levels.
In the view of this author, too little concern is being invested in the increase of
productivity in the public sector and even less into finding unconventional human
resources and energies within civil society. The first step in that direction is an
expansion of our government paradigm to include, educate, and harness the ener-
gies of civil society, indirectly improving the mentalities of public administrators
and private workers alike. Ma Hong, China’s premiere bureaucrat, was quoted by
the above-mentioned Economist article stating that in the current, faulty bureau-
cratic paradigm “the relationship between government and civil society has been
that between master and servant; instead, it should be a partnership, with the state
creating the right environment for companies and charities to do more of its work.”
His solution to the current crises in government: “we are in a transition from a big
state to a small state, and from a small society to a big society.” This transformation
will not take place naturally as civil society is an elusive and sometimes discredited
concept in the public’s mind. As numerous reports show, civil society participation
in Romania is extremely weak and the very concept is distorted (Civil Society for
the EU, 2008; Saulean & Epure, 1998). In current circumstances, Romanian civil
society is inadequately prepared to assume the roles and responsibilities of govern-
ments even if they were to be relinquished by the state.
However, what is even more important is the fact that the public perceives the
government as the only viable solution, the one who holds all the answers. The “iron
triad” among politicians, bureaucrats, and special interests is a powerful force that
will continue to grow the size of government, encouraged from the right in the form
of private corporations seeking government contracts and from the left in the
form of union workers and underprivileged citizens voting themselves ever-increasing
social benefits. It is this thinking that must be addressed since it is the fundamental,
intrinsic hindrance to government reform: the population generally dislikes govern-
ment and perceives it as inefficient and corrupt, but individual citizens hope it will
selfishly benefit them and their network.
On a practical and pragmatic note, bureaucratic reform has to continue to be
about improved efficiency. In his 2006 book, Good and Bad Power: the Ideals and
Betrayals of Government, Geoff Mulgan rightfully observes that the quality of gov-
ernment will determine the well-being of its population more so than its natural
resources. Currently, in most developed nations, the state represents over half of the
total economy; therefore any improvement in government productivity and effi-
ciency will have significant impact upon society as a whole. The transparency and
accountability debate should be complemented by a rigorous discussion about
government efficiency. Politicians and public administrators are not inherently cor-
rupt, but they may be performing a substandard service because they partially lack
the understanding of what efficient government is and which tools are necessary to
make it happen. These shortcomings are both systemic and a result of the political
process.
According to the previously mentioned Economist article, most bureaucratic

structures are out of date and the result of a political compromise, designed for an
industrial world no longer in existence. They function with mentalities, habits, and
behaviors long replaced by new technologies and opportunities. Unlike the private
sector which faced significant competitive pressures and must constantly adapt
itself to new realities, the public sector is insulated from “market turbulence.” This
may lead government bureaucrats to view themselves as being above the general
public; instead of being faithful servants of the taxpayers, they become vicious mas-
ters who control through the manipulation of information and their positions.
Second, given the political compromise system, there are many layers of govern-
ment (local, regional, and national) producing significant intragovernment over-
lapping and interagency competition. Given its various historical legacies, the
Romanian administrative system functions differently in various parts of the coun-
try. The decentralization efforts of the 1990s and the Europeanization efforts of the
2000s have produced a myriad of administrative structures which often compete in
the areas of legislation, resource sharing, accountability, and other responsibility
difficulties.
Third, there are the hindrances by interest groups whose “members have much to
gain by fighting to retain their particular privileges, and would-be reformers have
to take on disproportionately large costs to push for a vaguer public good” (The
Economist, 2011, March 19th). For instance, the article gives the example of
the European Union, where two-fifths of the budget goes to agriculture subsidies
given its powerful farm lobbies in Brussels. Broad-based lobbying by business
tends to be transformed into narrow special interests since business people have
learned that targeted lobbying can benefit their specific business (Olson, 1982).
Fourth, there are ever-increasing and vague rules and taxes hindering economic
growth and fostering bureaucratic corruption. The current tax system in Romania is
extremely complex and full of loopholes that tend to tax income and investment
instead of consumption. Further, there is an almost “Italian style” pride among the
population not to pay its taxes, since the perception is that the quality of the services
are not worth the money they cost. This issue is especially important for the creation
of the business civil society. Broadly speaking, there are two categories of compa-
nies operating in Romania. The first includes small start-ups, engaged mainly in
commerce or speculative economic activity, without adequate resources and a busi-
ness strategy which allows them to stay in business by paying as few taxes as pos-
sible. Some experts argue that if small- and medium-size enterprises (SME) were to
pay all taxes imposed by current legislation, over 50 % of them would go out of
business. The second category is the large multinationals who, even if they do mini-
mize their tax burden through expert advice, complain that they must also pull the
weight of the tax evaders. The complexity of the system itself is yet another reason
for reduced tax revenues.
Fifth, there is radicalization and opportunism in politics between the left and the
right of the political spectrum without the willingness to compromise and reach
agreements. Given general voters apathy, candidates from both sides are increas-
ingly selected by the radical components of their party without a compromising area
in the middle. The financing of periodic political campaigns requiring escalating

sums of money force political candidates to enter into dubious agreements with
special interest groups, whose promises must be fulfilled once in office. Not only
this, but once in office right-leaning politicians envision a small and efficient state
with a strong private sector and a vibrant civil society yet refuse to make unpopular
though necessary cuts to programs while left-leaning politicians outline grandiose
social visions without acknowledging their exorbitant costs.
The sixth challenge to governmental reform outlined by the Economist report is
public-sector unions and their unbalanced influence on public administration. The
percentage of workers in the public sector who are unionized is double, sometimes
triple, compared to the private sector and have the ability to shut down vital aspects
of public life without personal repercussion. Public union workers tend to be highly
educated individuals, positioning themselves not as representatives of labor unions
but rather as experts in public goods production. In most of the developed world,
they dominate center-left political parties:
Britain’s Labour Party, as with its trade unionism. Its current leader, Ed Miliband, owes his
position to votes from public-sector unions. Spain’s prime minister still likes to brandish his
union card. In America the links have become more explicit. Between 1989 and 2004 the
biggest spender in federal elections was the American Federation of State, County and
Municipal Employees, and $39.4 m of the $40 m it shelled out over that period went to
Democrats. One in ten of the delegates at the 2008 Democratic National Convention in
Denver was a teacher. (The Economist, 2011, March 19th)
Given this political influence, the average salary and benefits of public workers
in most developed nations including Romania, are significantly higher than their
private counterparts.
Finally, the last challenge to government reform is demography. The large num-
bers of pensioners, consuming a disproportionate amount of money and healthcare,
by comparison with the rest of the population and a decreasing number of the young
people contributing to the social system, is making it difficult for governments to
provide historically agreed-upon benefits. The older public is sensibly protecting
their benefits given their larger numbers and their propensity to vote, unlike their
younger counterparts. According to Ian Davis in his 2007 article, Government as a
business,
in almost all of the Western European countries, in Japan, the United States, South Korea,
and elsewhere, tax rates will have to more than double to support current benefit levels,
given the expected size of the retiree pool relative to the workforce. The agreements govern-
ments have with their citizens about which services are to be provided will be simply
unaffordable.
Regardless of the challenge, austerity reforms alone are not sufficient to produce
true and sustainable public administration reform, though they are instinctual to
politicians and international bodies. As the riots of 2011 throughout the developed
world and the extreme political rhetoric in nations like Hungary and Holland have
painfully reminded us, societal problems cannot simply be solved with budget and
service cuts alone. Undoubtedly, sacrifices must be made and the challenge to
politicians everywhere over the next few years will be to educate and convince the
public of their necessity; but if cuts are the only solutions offered, Europe and
Romania risk facing social unrest and the rise of political extremes rivaling those of
the 1930s.
The alternative to austerity is to increase governmental productivity and effi-
ciency through entrepreneurial initiatives since tax rates in Europe are at a historical
high. That, however, cannot be accomplished promptly with either traditional public
administration or political instruments alone. This requires a harmonized effort
from public, private, and voluntary sectors built on collaborative effort with entre-
preneurial, constructive, and nonconventional behavior at its heart. Pessimists may
insist that the costs are too high and the wait too long, but looking at the private
sector, it experienced a 200 % productivity increase in the previous two decades
through the entrepreneurial application of new technology and processes, while cus-
tomers benefited from better products and lower prices. The adoption of true entre-
preneurial culture that will lead to a productivity increase in both public and the
private sector is one of the solutions to raising living standards and overcoming the
current financial and government crises. Thomas Dohrmann and Lenny Mendonca
in their 2004 article, Boosting Government Productivity, argue that productivity is
“the heart of government performance—not cost-cutting, salary reduction, or the
elimination of services. Although a balanced budget can be achieved through sim-
plistic methods, such as layoffs or reduction of services, those initiatives often lead
to poorer service and deteriorated employee morale. The preferred method is to
maintain the same level of costs while increasing the quality and the quantity of
outputs (Kessides, 2004).
Skeptics of public sector productivity increase often cite the 1967 article
Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis by William
Baumol, who observed that services may lag behind manufacturing in productivity
because of their labor-intensive nature making cost-saving technological innova-
tions difficult to apply. However, over the last three decades, private enterprises
have managed to successfully apply technological innovation to the service sector,
thus boosting its productivity. The nature of healthcare, education, logistics, pro-
curement, customer service, etc., has all been radically transformed in the private
sector and there is no reason to believe it cannot be done so in the public sector as
well. Given the current budgetary crisis, politicians on the left ought to welcome a
more productive government ensuring more resources for social needs, while the
right ought to celebrate lower taxes and strong economic growth. This increase in
bureaucracy’s productivity can only be accomplished through the three classic man-
agement tools of organizational redesign, strategic procurement, and operational
redesign which are instruments of a broader program of entrepreneurial cultural
change and transformation (Day & Jung, 2000; LaClair & Rao, 2002; Lawson &
Price, 2003).
3.1.3 The Appeal and Importance of Entrepreneurial

Government
There are increasing number of government reform experts who consider govern-
ment entrepreneurship as the preferred response to the challenges of globalization
since it may generate sustainable competitiveness and productivity increases
(Colwell & Narayanan, 2010; Cumming, 2007; Minniti, 2008; Moynihan, 2006a,
2006b). The Treaty of Lisbon, intended to transform the European Union and
prepare it for the global economic challenges, stated in March 2000 that over the
next decade the EU must become “the most competitive and dynamic knowledge-
based economy in the world, capable of sustainable economic growth with more
and better jobs and greater social cohesion” (Treaty of Lisbon, 2000). The EU
leaders gathered in Lisbon argued that the achievement of this noble goal was
predicated upon the transition away from a traditional economy and social struc-
ture of government to a “knowledge-based economy and society.” The agreement
in general was that structural reforms must take place to increase “competitive-
ness and innovation” and a painful acknowledgement that the traditional European
social model was unsustainable given the current demographic pressures. By
2011, not only is Europe not “the most competitive and dynamic knowledge-
based economy in the world,” but some argue its very existence along with its
common currency is under question. On November 12th, 2011, the Economist’s
article, Europe and its Currency, concluded that “above anything else, Europe’s
troubled economies need growth.” Competitiveness and entrepreneurship may
have to be infused into Europe and implicitly the Romanian society, yet the chal-
lenge is how to best do it and who is in the best position to accomplish it. Thus
far, most reform recommendations have been aimed exclusively at reforming
either the public administration or the political system.
The theory of reforming the government, making it more productive and entre-
preneurial, more citizen-centered, more accountable, less corrupt, etc., may not be
plausible. Famous books such as David Osborn and Ted Gaebler’s 1992, Reinventing
Government: How the Entrepreneurial Spirit is Transforming the Public Sector,
may contain excellent propositions, but the practical reality is that they are difficult
if not impossible to accomplish given the current levels of political and economic
expectations. The October 2010 report, Beyond Austerity: a Path to Economic
Growth and Renewal in Europe, published by the McKinsey Global Institute,
reached similar conclusions: “entrepreneurship is the required ingredient for mov-
ing beyond austerity and painful budget cuts, and the European (Romanian) culture
does not have it, making it difficult for its government to act entrepreneurially.”
Unless we find an effective method to reform citizens’ expectations and their
contributions to government, the painful Romanian and European reforms may be
violently resisted at worst or “declaratively accepted” at best. Entrepreneurial gov-
ernment is impossible without an entrepreneurial culture—a culture that the private,
the public, and civil society would benefit from. Unfortunately, there seems to be a
major confusion if such a culture can and should be actively created and who is
responsible for it.
Entrepreneurship is of major importance for any society, not only for the creation
of new businesses and organizations but more importantly for improving and
reforming existing ones (Schumpeter, 1942). Even if entrepreneurship is commonly
studied in the private sector focusing on the individual entrepreneur with his/her
characteristics, organizations, and cultures are also considered entrepreneurial
(Brush & Hisrich, 1991; Covin & Slevin, 1991; Schumpeter, 1942). The father of
entrepreneurship, and according to some of globalization, Joseph Schumpeter in his
seminal 1942 book, Capitalism, Socialism and Democracy, outlines the merits of
liberal capitalism and the centrality of the “entrepreneurial spirit” to the “creative
destruction” that in the long-run improves the competitiveness of any individual,
firm, or society. This improvement can be accomplished through the introduction of
new and improved innovation that breaks the old equilibrium in the market. Denny
Miller (1983) describes entrepreneurial organizations and cultures as
one that engages in product-market innovation, undertakes somewhat risky ventures, and is
the first to come up with “proactive” innovations, beating competitors to the punch (Miller,
1983, p. 321)
In contrast, the nonentrepreneurial one “innovates very little, are highly risk
averse, and imitates the moves of competitors instead of leading the way” (Miller,
1983, p. 321). Entrepreneurial organizations are capable of “strategically renewing”
themselves in response to external opportunities or threats and are keenly aware of
their weaknesses and strengths. The process of “strategic renewal” is the creation of
new wealth through innovative combinations of the traditional resources of land,
labor, and capital.
Governmental entrepreneurship is mostly mentioned with a focus on the indi-
vidual entrepreneur as a pioneer (Boyett, 1997; Lewis, 1980; Ramamurti, 1986;
Terry, 1993). Under the umbrella of New Public Management, numerous authors
have applied literature on the private sector to the public sector attempting to out-
line factors that can stimulate public entrepreneurship (e.g., Caruana, Ewing, &
Ramaseshan, 2002; Sadler, 2000; Zampetakis & Moustakis, 2007). However, as
the past three decades of New Public Management have shown, especially in a
transitional economy such as Romania, entrepreneurial government can often
mean corrupt government. The private market that was supposed to counterbal-
ance the government and offer an alternative to inefficient administration is either
inexistent or ineffective.
In the classical entrepreneurial tradition that took into account mainly the private
sector, an entrepreneur was supposed to eliminate waste (profit) in an industry or a
company through a more efficient utilization of resources.2 Since entrepreneurial
opportunities seldom come with exact and guaranteed recipes, the entrepreneur
achieves a new economic equilibrium through trial-and-error, often a costly and
2
Classical economist referred to profit as “waste” since profit is the difference between revenues
and expenses. The internal tendency of the firm is to maximize profit (waste) by selling their prod-
ucts at as high of a price as possible above its costs. In a free-market system where competition is
free and entrance into an industry unhindered, new entrepreneurs would eliminate that waste by
entering the market and selling the same product at lower prices.
painful process. Even if the classic notion of entrepreneurship was encapsulated in

the “creative destruction” mantra, entrepreneurial activities have resulted in higher
paying jobs and better working conditions since both the creative and consuming
capacity of the labor force was realized. Thus, in an indirect way, entrepreneurial
activity benefited society through lower social needs, higher taxes, and improved
living conditions. Even if initially there was a tendency to mistreat workers and
continuously reduce their salaries, creative and entrepreneurial firms realized that
their workers were actually the major source of creativity and value creation.
Unfortunately, the Romanian understanding of modern capitalism and entre-
preneurship was that the labor force was just an expense that needed to be mineral-
ized. Over the past two decades, the national marketing strategy and the attraction
mechanism for foreign direct investment (FDI) has been “low labor cost.” Romanian
entrepreneurs were those individuals who speculated and engaged in commercial
activity often using government contacts and public money for their ventures. This
flawed notion of entrepreneurship must be corrected and a proper understanding of
business must be promoted.
3.2 Culture, Social Trust, and Entrepreneurship
Before attempting to formulate some suggestions about an increase in entrepreneur-

ial activity, behavior, and thinking, I would like to begin by addressing the issue of
social capital. Janet Jacobs used the term “social capital” in the early 1960s and
although she did not explicitly define it, she referred to the value of informal net-
works (Jacobs, 1961). Robert Salisbury advanced the term as an essential compo-
nent on the formation of interest groups (Salisbury, 1969). In the late 1990s the term
gained significant popularity and was part of a World Bank research programs and
the focus of several preeminent books like Robert Putnam Bowling Alone (1995)
and Lewis Fedstein’s Better Together (2003). Social capital is an elusive, difficult
concept even as it makes a considerable impact on the development and sustain-
ability of a society. Francis Fukuyama in his 1999 article, Social Capital and the
Civil Society, defines social capital as “an instantiated informal norm that promotes
cooperation between two or more individuals.” It is the norms of a society based
upon intangible beliefs that foster or hinder cooperation among citizens and the
perpetuation of values such as honesty, keeping up of commitments, performance of
duties, reciprocity, etc. The presence of positive social capital makes a society more
efficient by reducing transactional costs and the enforcement of the rule of law; in
its absence, individuals pay unusually high economic and social costs to transact
with each other. In the knowledge-based economy of the twenty-first century trust
is just as important, perhaps even more than in the preceding traditional economy
with bureaucratic instruments and rigid control mechanisms.
Social capital, or the lack of it, is most visible in the functioning of the political
system. Alexis de Tocqueville in his 1835 book Democracy in America utilized the
phrase “the art of association” when referring to a nation’s ability to creatively and
3.2 Culture, Social Trust, and Entrepreneurship 87
voluntarily solve their common social problems. He observed that one of America’s
cultural strengths was its predisposition for voluntary association, organizing itself
to solve all kinds of problems. Voluntary, usually religious, organizations took timid
and uninterested individuals and made them strong and engaged, generating a
national culture of activism. Social capital is vital to the adequate functioning of
formal public institutions while low levels of social capital is linked to inefficient
and corrupt local government (Banfield, 1958; Putnam, 1993). Social capital pro-
duces a unique culture, built upon a firm civil society, the universal condition for the
modern liberal democracy (Gellner, 1994). Fukuyama continues:
If a democracy is in fact liberal, it maintains a protected sphere of individual liberty where
the state is constrained from interfering. If such a political system is not to degenerate into
anarchy, the society that subsists in that protected sphere must be capable of organizing
itself. Civil society serves to balance the power of the state and to protect individuals from
the state’s power (Fukuyama, 1999).
These cultural factors determine each nation’s ability to build necessary public
institutions. Fukuyama contrasts Japanese governmental agencies’ relatively low
level of corruption with the typical Latin American or African government. He
credits the Japanese culture that traditionally respected higher authority, its high
level of training and professionalism, and states that institutions are grafted onto the
national culture. The source of social capital is highly debated. One possible expla-
nation is that social capital is spontaneously produced out of necessity, as in the
prisoner’s dilemma game: individuals who interact constantly over time develop a
need for a good reputation, honesty, and credibility. The second source of social
capital could be society’s authorities—formal or informal—that promote certain
norms and possess the necessary enforcement mechanisms. Notable among them
are religious authorities that transmit values and norms through the socialization
process and responses to existential questions. Since they utilize faith and habit
more than reason, they can persist for a long time. For instance, the Protestant
Reformation in the sixteenth-century Europe is credited with the following eco-
nomic boom. Max Weber in his Protestant Work Ethic and the Spirit of Capitalism
argues that the Protestant religion produced moral values like honesty, hard work,
reciprocity, and savings that created modern capitalism. In Weber’s view, “culture
was the uncaused cause” of the Protestant worldview.
On the issue of how to increase social capital, Fukuyama offers four possible
initiatives. First, government must realize its limitations and lack of authority;
therefore they ought to rely on their influence and build upon already existent reli-
gion, traditions, and historical experiences. Second, there needs to be an intentional
and strategic effort by all stakeholders to positively influence the education system.
Third, government should foster the creation of social capital by efficiently provid-
ing public goods such as property rights and safety. Fourth, and I believe most
relevant for Romania, governments can have negative impact on social capital if
they assume the activities of the private sector or civil society. Cooperation is built
on habit and practice, and if the state organizes everything, people will lose their
ability and desire to volunteer. Beyond the role of government, there are two addi-
tional sources of social capital that I believe are particularly significant for Romania.
The first is religion that can inspire cultural changes if it is practiced according to
the Bible and the public teaching of most Christian leaders. The second source of
social capital is globalization, which is the carrier not just of capital but also of ideas
and culture such as accounting standards, managerial transparency, and NGO activ-
ities. The issue for Romania is whether globalization and Europeanization will tear
down traditional communities, or if this external shock will disrupt dysfunctional
values and norms, making room for the entry of modernity.
3.2.1 National Culture and Its Impact on Entrepreneurship
An encompassing umbrella and the generator of social trust, with direct economic
and administrative implications, culture is the major influencer of entrepreneurial
behavior whether in the private or the public sector. Kroeber and Parsons (1958)
define culture as patterns of values, ideas and other symbolically meaningful systems
as factors in the shaping of human behavior. Barnouw’s (1979) definition is “stereo-
typed patterns of learned behavior which are handed down from one generation to
the next.” Hofstede (2001), one of the most famous experts on the issue of culture
and its impact upon productivity and entrepreneurial behavior, refers to culture as
“the collective programming of the mind that distinguishes the members of one
group or category of people from another.” Fons Trompenaars in his 1993 book
Riding the Waves of Culture: Understanding Diversity in Global Business gives per-
haps the best cross-national analyses of culture in recent years. Values are established
early in life and are “programmed” into individuals, resulting in behavior consistent
with the cultural context and enduring over time, which in turn generates the tangible
institutions and their behavior (Hofstede, 1980; Thomas & Mueller, 2000). Culture is
regarded to exist mainly in our mind, while institutions are observable to the outside
world and more easily analyzed. Culture, or what a group of individuals consider to
be normal behavior, is the creator and sustainer of values and beliefs which in turn
are the primary determinants of behavior (Thomas & Mueller, 2000).
There have been a significant number of studies exploring and highlighting the
relationship between a nation’s culture and its entrepreneurial behavior (Busenitz,
Gomez, & Spencer, 2000; Lee & Peterson, 2000; McGrath & MacMillan, 1992;
Thomas & Mueller, 2000; Wennekers, Noorderhaven, Hofstede, & Thurik, 2001).
Richard Lynn in his 1991 book, The Secret of the Miracle Economy, speaks of
attitudes rather than values, or the common Romanian phrase “mentality.” In his
view, a nation’s attitude and values toward work, production, wealth, saving, new
information, invention, strangers, risk and failure determine how entrepreneurial a
culture may be more so than the act of starting a new firm. There are two perspec-
tives regarding the relationship between cultural values and entrepreneurial behav-
ior. The aggregate psychological trait is based on the idea that if a society contains
more people with entrepreneurial values, more people will be entrepreneurs. The
social legitimating perspective refers to the level at which a society accepts and even
expects entrepreneurial behavior (Văduva, 2004). For instance, Gunnar Myrdal,
writing in 1968 before the cultural reformation that took place in Asia, concluded
3.2 Culture, Social Trust, and Entrepreneurship 89
that cultural factors were the principal obstacles to the modernization of Asia. It was
not until cultures such as Japan, and more recently China and India, transformed in
order to “permeate, rigidify and dominate the entire national system in all its politi-
cal, economic and social dimensions” (Myrdal, 1968, p. 88) that Asia began its
economic climb. It is the national culture that explains, in most cases, why some
nations develop more rapidly and more fairly than others. Some cultures are
“progress-prone,” others “progress-resistant” in their view of time, work, education,
frugality, ethics, merit, sense of community, authority, justice, and secularism.
Hofstede’s cultural framework, comprised of uncertainty avoidance, collectiv-
ism, power distance, and assertiveness is a good instrument for evaluating the inno-
vativeness of a culture along with the expected level of entrepreneurship. Uncertainty
avoidance is the cultural characteristic that gages the extent to which members feel
threatened by inexact and unknown situations. Power distance is the cultural char-
acteristic that reflects the level at which people accept that power should be strati-
fied and concentrated at higher levels of organizations. Collectivism entails the
degree to which people feel pride and loyalty to their group. Assertiveness is the
degree to which individuals are assertive, confrontational, and aggressive in social
relationships; it is associated with initiative, competition, and the reward of perfor-
mance. Uncertainty avoidance creates resistance toward risk, innovation, and
change, signifying that high uncertainty avoidant nations have low entrepreneurial
levels. Furthermore, entrepreneurial activity is difficult in nations with high power
distance, given the interest to maintain the status quo, the inherent resistance to
change, the traditional distribution of power, and the routine barriers to innovation.
Collective cultures offer more opportunities for collaboration and communication
among employees, investors, and customers, making innovation and transformation
more acceptable (Dwyer, Mesak, and Hsu, 2005). On Hoffstede’s cultural scale,
Romania ranks 90 out of possible 100 points at the “power distance;” 30 at “indi-
vidualism;” 42 at “masculinity;” 90 at “uncertainly avoidance”; and for “long-term
orientation” we have no estimate. Needless to say, Romanian culture is not naturally
inclined toward entrepreneurship, but it does contain certain aspects of it.
Two excellent sociological perspectives regarding the Romanian culture are
offered by Emil Cioran in his 1990 Romania’s Facial Transformation (Schimbarea
la fata a Romaniei) and Lucian Blaga in his “Mioritical Space.” The Romanian
culture tends to be quite fatalistic and prone towards negativity; there seems to be a
disconnection between cause and effect. Romanians seem to be individualistic as
consumers but collectivistic as producers, and unlike their western counterparts
they do not feel the need to create grand social institutions. Romanians tend to lack
persistence but are patient; they don’t work methodically, but when needed, are
willing to sacrifice. They are quite extravagant with time and also hospitable, toler-
ant, religious, patriotic, and very adaptable. Thomas Keil in his 2006 book,
Romania’s Tortured Road toward Modernity, characterizes the Romanian people as:
…one of the things that is readily apparent about Romanian social and political life is the
degree to which Romanians see their history and their destiny as largely the result of power-
ful and not always apparent external forces that sweep over them…There also is a tendency
to particularize this, so that they perceive individual situations in much the same way (Keil,
2006, p. 86)
As a number of studies seem to indicate, Romania does not have an entrepreneurial,

productive, and efficient culture, and there are many justifiable causes for this
ranging from geographical position to history, religion, etc. I would like to add an
additional one however, the absence of an intentional, national, and enthusiastic
cultural education initiative (Miclea, 2005; Zamfir, 2001). Whether in public or
private institutions, it is common to complain and criticize Romanian culture or
mentality. However, my observation is that there are few mass initiatives and fewer
popular programs educating and influencing Romanian culture (Birzea, 1999;
Vlăsceanu, 2010). The Romania society cannot expect to reap something that it did
not sow, therefore I argue that the civil society in general and the business civil
society in particular ought to intentionally and actively engage in the development
of an entrepreneurial national culture.
3.3 Civil Society: The Generator of National Culture
Michael Edwards in his 2009 book, The Civil Society, begins by stating that “the
civil society is much talked about but rarely understood” It is impossible to have a
conversation about politics or public policy these days without someone mentioning
the magic words “civil society” (Edwards, 2009, p. 5). Even if civil society is an
elusive concept, relatively new for Romania, I believe that an adequate understand-
ing of it and its origins and interworking can aid us in our quest to make Romanian
society more entrepreneurial and prepare its public administration for the global
challenges of the twenty-first century. Naturally, the civil society is a very broad
concept that can mean different things to different people in different circumstances.
In this section of my volume I will focus on two general directions and outcomes of
the civil society, mainly the development of national culture and the counterbalanc-
ing of government abuses. In the West, the original concepts of civil society can be
traced to the nineteenth century political and ideological ideas of liberal democra-
cies (Bermeo & Nord, 2000; Cohen & Arato, 1994). Perhaps the earliest and most
influential voice was F. Hegel (1827), with his Philosophy of Right, which sprung
both the extreme left philosophy of communism articulated by Karl Marx and the
extreme right philosophy of Alexis De Tocqueville. Civil society fundamentally has
the “role of reducing politics in a society by expanding free-markets and individual
liberty,” or “the single most viable alternative to the authoritarian state and the
tyrannical market,” or “the missing link in the success of social democracy”
(Edwards, 2009, p. 2). Adam Seligman calls civil society the “new analytic key that
will unlock the mysteries of the social order” (Seligman, 2004, p. 100), and Jeremy
Rifkin (1995) calls it “our last, best hope” (Rifkin, 1995, p. 106). Some experts
claim that civil society is only possible in liberal capitalistic democracies (Blaney &
Pasha, 1993; Rueschemeyer, Stephens, & Stephens, 1992) while others view it as
the universal expression of collective life regardless of culture, politics, develop-
ment, or history (Benhabib, 2002; Bozeman, 1994). From some perspectives civil
society is only those positive, democratic, modern, and constructive initiatives,
3.3 Civil Society: The Generator of National Culture 91
while others insist that civil society has the “uncivil” aspect of nationalism, militarism,
religious fundamentalism, and intolerance. Is the family to be considered part of
civil society or a separate group? If the main purpose of civil society is to check the
corruptibility of the state, is it appropriate to receive most of its funding from
the government? Is civil society—apparently the case in Romania—referring to the
political opposition of those who are currently in power? Can a healthy civil society
be built with foreign aid? These and many others constitute fundamental questions
surrounding the elusive concept of the civil society and it is not the purpose of my
present research to analyze them all in detail. However, a brief literature review of
the field of civil society studies would behoove us to better understand the concept.
My approach will be to emphasize the voluntary nature of all civil society initiatives
in stark contrast to the compulsive Marxist civil society and maintain the two lines
of culture generation and governmental counter-weight I stated earlier.
3.3.1 General Concepts on the Civil Society
John Keane (1998) refers to civil society as the nongovernmental, nonbusiness sec-
tor and outlines the complex and dynamic relation both with itself and the other two
sectors that constitute society. The “third sector” or “the voluntary sector,” as it is
sometimes called, is characterized by nonviolence, self-organization, and resilience.
Keane considers the concept of “nationalism” as an example of the “uncivil soci-
ety” since, in his view, civil society is a positive force that cultivates tolerance and
support and resists “barbarian tendencies” that erode civilized behavior. Jeffrey
Alexander (1998) perceives civil society as an independent sphere of social solidar-
ity, distinct from political, economic, religious, or family spheres. Volker Heins
(2004) prefers to think of civil society as a counter-weight to the negatives of the
political world such as excessive state power and detrimental social phenomena like
disintegration, violence, and religious fanaticism. In their 2000 collections of
essays, Trust and Civil Society, Tonkiss, Passey, Fenton, and Hems stress the impact
civil society has on national culture, in the behavior of individuals and their family,
their religion, volunteering organizations, the economy, and the government. They
notice that the volunteer sector—considered the best alternative to state-supplied
social assistance—is not properly consolidated and has undefined relations with
public institutions. In the Romanian context, the best work was published
by Mihaela Vlăsceanu in 2010 titled Social Economy and Entrepreneurship: an
Analysis of the [Romanian] Nonprofit Sector.
According to Edwards (2009), there are three major literature streams regarding
the modern civil society. First, he talks about the “voluntary association” perspec-
tive, which claims that by simple association people will develop values like toler-
ance, cooperation, and other skills required for a democratic life. The limitation to
this perspective is that volunteering associations can also foster antisocial values,
and in reality civil society is not as powerful as the family, the school system, or
religion in creating a national culture. The second stream in civil society studies
refers to civil society as “the good society,” since it sets the subject in its proper
context and “guards against the tendency to privilege one part of society over the
others on ideological grounds” Edwards, 2009, p. 273). Neighbors will not take the
place of good government, and NGOs do not substitute well-functioning markets.
Successful societies have been skillful at negotiating social contracts among gov-
ernment, business, and citizens, yet this negotiation requires an agreement regard-
ing the general direction and collective choices made. Therefore, Edwards brings
into focus a third and innovative perspective regarding civil society, what he calls
the “public sphere.” This perspective, where the whole of society has access to the
debate on the common good and the capacity to deliberate on it democratically is
central to the forming of a healthy civil society. Edwards states:
The development of shared interests, a willingness to cede some territory to others, the
ability to see something of oneself in those who are different and work together more effec-
tively as a result—all these are crucial attributes for effective governance, practical
problem-solving, and the peaceful resolution of our differences. In its role as the “public
sphere,” civil society becomes the arena for argument and deliberation as well as for asso-
ciation and institutional collaboration, and the extent to which such spaces thrive is crucial
to democracy, since if only certain truths are represented, if alternative viewpoints are
silenced by exclusion or suppression, or if one set of voices are heard more loudly than
those of others, the “public” interest inevitably suffers (Edwards, 2009, p. 64).
Another major issue worth mentioning in civil society studies is voluntary par-
ticipation, which is the external, visible, and measurable expression of its existence
and activity. Stiefel and Wolf, in their 1994 book, A Voice for the Excluded. Popular
Participation in Development: Utopia or Necessity? identifies the following evalu-
ations through which voluntary participation in a civil society institution can be
ascertained:
1. Is there open and healthy confrontation among members of the civil society
institution?
2. What is the background, the interest, and level of participation of individuals
3. Is participation exclusively as beneficiaries?
4. Is the staff volunteering or is it paid? What is the ratio? Is the salary at market
rates?
In referring to economic developmental theory and practice, Somesh Kumar
(2007) views participation in civil society as paramount:
civil society actors including the ONGs and multifunctional agents such as the World Bank
and the International Monetary Fund came to the conclusion that development cannot be
sustainable and long-lasting if only the people participation is part of the development pro-
cess (Kumar, 2007, p. 118).
He underscores a number of participation possibilities for civil society such as

“contribution,” “involvement in decision-making,” and “active influence.” Further,
he highlights the importance of the level of “intensity of participation” in civil
society that ranges from passive participation, participation in information giving,
consultative participation, participation for material reasons, functional participation,
interactive participation, and self-mobilized participation. The advantages of

increased participation in civil society are:
1. Efficiency—the more appropriate use of limited resources to gain maximum of
benefits
2. Effectiveness—undertaking projects that really matter and make a difference
3. Self-reliance—teaching participants to be less dependent on government
4. Adequate coverage—participants can ensure that benefits reach the intended group
5. Sustainability—increased probability that an initiative will exist in the long-run.
Participation in civil society is not natural to humans who—depending on your
perspective—may be viewed as inherently selfish. Most individuals perceive
themselves and their families as having significant financial shortcomings, therefore
convincing them to participate in a voluntary, sacrificial activity is not a natural
phenomenon. True, we are all endowed with a propensity to show kindness and
mercy toward our neighbors, but those tendencies must be harvested and directed;
they do not come naturally. Humans need rational and sentimental reasons to
positively and selflessly participate in civil initiatives, and those ideological and
existential convictions have been traditionally educated and harnessed by religion.
3.3.2 Religion as the Underpinning Of Civil Society
The issue of religion and its influence over society at large is of particular interest to
me since I consider that religion is the truest generator of voluntary activity. Further,
in my perspective, it is a person’s and/or a nation’s beliefs—or lack thereof—about
the eternal that influence their values and behavior mostly. The relationship between
religion, religious organizations, and civil society is long-established and dates back
to the days of Alexis de Tocqueville and Max Webber. The contemporary perspec-
tive on the relationship between religion and civil society seems to be divided
between individual participation in religion and the public participation of religious-
based organizations (Pascaru & Buţiu, 2009). A number of studies in the former
communist region of eastern Europe were undertaken attempting to identify pat-
terns of religiosity, religion’s relation with civil society, and instruments of revital-
ization following the collapse of an atheistic ideology (Siniša, 2002). José Casanova
in his 1994 book, Public Religions in the Modern World, discusses the concept of
public religion as the “active participation of groups of faith in public matters.” This
participation can either be public religious involvement in the political process of
promoting policies and candidates, or direct involvement in the social matters such
as starting and operating a soup kitchen, an orphanage, a school, or a hospital.
Chambers and Thomson (2005) claim that this active participation of the religious
groups is either to defend some privileges or to promote social justice and human
rights. Andrew Greeley (1997) while analyzing “religious capital” as a source of
“social capital” rightfully observed that throughout the developed world, traditional
Christian religious organizations are losing some of their influence.
Considering the integration of eastern Church cultures into the European Union,
Miklos Tomka in his 2006 article, Is Conventional Sociology of Religion Able to
Deal with Differences between Eastern and Western European Developments? out-
lines some of the fundamental differences between western European religions—
mainly Protestant and Catholic, but increasingly atheist—and the eastern European
religion of Orthodoxy. He underlines the following differences:
1. In western Europe, religious influence is either lost or marginalized to the benefit
of culture, the arts, and politics; eastern Europe in contrast seems to be experi-
encing a rebirth of religion both at the individual and the national levels.
2. In the West, youth have the lowest religious involvement while in the East the
number of young individuals who have “discovered God” is higher than those
who claim to “have lost their faith.”
3. In the West, there is a visible diminishing role and influence for the church, while
in the East the churches are providing greater social support and enjoy a much
higher status as a public institution.
Tomka’s are lamentable conclusions since the civil society, the culture, and the
social capital in western Europe, have been influenced by western Christianity,
mainly Catholics and Protestants. Of particular interest to entrepreneurial and eco-
nomic development studies has been the “Protestant Work Ethic” (PWE) initially
outlined by Max Weber in his 1958 book, The Protestant Ethic and the Spirit of
Capitalism, which traces how Protestant religious beliefs have facilitated the devel-
opment of liberal, free-market capitalism. In the sixteenth and seventeenth-century
northwestern Europe, and later in the eighteenth and nineteenth centuries in the
USA, the new found Protestant faith created a new culture and a civil society
anchored in the Protestant churches and Biblical belief (Mondrack, 2008). Unlike
the traditional religions, the Protestant churches were independent from the state
and saw themselves responsible for social issues such as education, healthcare,
unemployment, etc. Some argue that the premiere contribution of the Protestant
reformation was the translation of the Bible from Latin into German with the “unin-
tended consequence” of advancing literacy among the populations of Europe. Most
universities associated with modern education such as Harvard, Oxford, and Yale,
were originally Protestant “start-ups” established to educate the public. The
Protestant civil society further concerned themselves with social and moral issues
such as slavery, women’s rights, the plight of the poor, and the establishment of the
written language of people living in the European colonies.
Another one of the main unintended consequences of the Protestant reformation
was a surge in economic development and entrepreneurial activity (Mondrack, 2008).
Following the writings of Martin Luther, John Calvin and Benjamin Franklin, Weber
identifies a distinct culture grounded on the belief that salvation was by the grace alone
and that economic vocations were not inferior to religious ones. The Calvinist doctrine
of predestination, which states that God has chosen his “elected” for salvation, was of
particular economic relevance since, absent any other signs, success in business life
was viewed as a possible indicator of being elect. Calvin further insisted that idleness
and the waste of time lead to condemnation, while hard work and frugality were
evidences of one’s election. He argued that believers should choose an occupation that
paid the highest possible earnings and that income ought to be “properly donated and
invested.” In referring to the American philosopher and statesman Benjamin Franklin,
Weber points out how distinctly Protestant religious elements encroached upon secular
philosophies. Franklin’s thirteen virtues—temperance, silence, order, resolution, fru-
gality, industry, sincerity, justice, moderation, cleanliness, tranquility, chastity, and
humility—were central Protestant values. Franklin’s ideas were centered on “the earn-
ing of more and more money, combined with the strict avoidance of all spontaneous
enjoyment of life… Man is dominated by the making of money, by acquisition as the
ultimate purpose of his life” (Weber, 1958, p. 53).
A crucial aspect of Protestant belief and civil society practice was the idea of
work as a “divine calling,” originally introduced by Luther himself. Weber states
that to the Protestant culture,
work is an obligation which the individual is supposed to feel and does feel towards the
content of his professional activity, no matter in what it consists, hence, labor must be per-
formed as if it were an absolute end in itself (Weber, 1958, p. 125)
The Protestant religion through its outer institutions—the church and its
theologians—created a civil society that ensured hard work, profit-seeking, virtuous
living, and the strict avoidance of worldly pleasure and idleness (Dietz, 1980). The
economic and historical consequences of the Protestant reformation in western
European nations such as Holland, England, and later the USA were visible through
an increase in entrepreneurial activity, productivity, prosperity, and standard of liv-
ing. By the early twentieth century, The USA and western Europe created what no
other society in the history of mankind had even imagined: a liberal democracy built
on a solid middle class enjoying an astounding standard of living possible through
creative entrepreneurial innovations, from the steam engine and electricity to the
personal computer. Perhaps this, too, was what motivated public administration
reformers to seek equality and wealth redistribution through their progressive and
classical public administration initiatives. Ronald Macaulay in his 2005 article
Democracy in Iraq states that:
Christianity created Western Civilization…The modern world arose only in Christian soci-
eties. Not in Islam. Not in Asia. Not in a “secular” society…There are many reasons people
embrace Christianity, including its capacity to sustain a deeply emotional and existentially
satisfying faith. But another factor is its appeal to reason and to the fact that it is inseparably
linked to the rise of Western Civilization. Consider this recent statement by one of China’s
leading scholars:
One of the things we were asked to look into was what accounted for the success, in fact,
the pre-eminence of the West all over the world. We studied everything we could from the
historical, political, economic, and cultural perspective. At first, we thought it was because
you had more powerful guns than we had. Then we thought it was because you had the best
political system. Next we focused on your economic system. But in the past twenty years,
we have realized that the heart of your culture is your religion, Christianity. That is why the
West is so powerful. The Christian moral foundation of social and cultural life was
what made possible the emergence of freedom and then the successful emergence of capi-
talism and then the successful transition to democratic politics. We don’t have any doubt
about this.
It is this western ideological societal concept that is most often imitated, and the
explanation of recent Asian success has been the adoption of “Protestant Work
Ethics” that have in fact became the “Universal Work Ethics” and the underpinnings
of globalization (Mondrack, 2008; Ray, 1982).
In the 1998 article, The Burden of Eastern Orthodoxy, Michael Radu explains
and gives a brief history of the eastern Orthodox religion, its relationship with the
state, and its impact upon the creation of civil society. He begins his article by con-
trasting the religion of eastern Europe with the religions of western Europe:
More so than in the rest of Catholic or Protestant Western Europe, the Orthodox churches
of Eastern Europe have long been openly and actively involved in national politics and are
intimately and historically connected with the region’s dominant post-communist ideology:
nationalism (Radu, 1998).
Radu points to two important aspects of Orthodoxy that have shaped the
Romanian culture and implicitly its civil society: tradition and nationalism. Unlike
the Protestants of western Europe and America, the Orthodox of eastern Europe
have an intertwined perspective on the state and religion. There was never a clear
distinction between the state and the church; as a result there was really no need for
a separate civil society:
The state-people-church triangle has never been stable in the history of the Orthodox world.
The Byzantine state, as well as its most powerful medieval rivals, was an imperial
state, where the distinction between the ruler (who was God-anointed) and the state did not
exist. The people enjoyed “rights” only to the extent that they derived from the Orthodox
faith. The church, though representative of the people, was expected to support the state and
thus be subject to it, a phenomenon long characterized (pejoratively) by Western Europeans
as “caesaropapism” (Radu, 1998).
In the eastern Orthodox tradition dating back to the third century, Roman
Emperor Constantine I perceived the “Caesar” (Tsars, the Slavic version) as the
arbiter of theological issues within the Orthodox church, a practice that constitutes
deep Orthodox tradition.
Orthodox political culture has not changed much since the days of Leo VI (886–912). The
divinely anointed emperor (basileus, tsar) has been replaced by the more abstract “state,”
but he (or it) still controls the appointment—and often the replacement—of patriarchs. The
church sees itself, and is once again seen by many, as the embodiment of the people—that
is, of nationhood and national continuity (Radu, 1998).
The Orthodox Church also sees itself as the repository of nationhood, national
values, and, historically speaking, the savior the nation’s existence. If it were not for
the Orthodox Church, Romania might have been an Islamic nation.
Daniel Barbu in his 2005 book Politics for Barbarians, along with Michael
Radu, points to a few possible incompatibilities between Romanian Orthodox cul-
ture and the European Union. They point out that Orthodox religion functions better
with authoritarian regimes—similar to its own hierarchical structure—than with the
“mess” of democratic debate and negotiation. The second issue is the Orthodox
reverence of tradition, which is often considered of equal importance with the
Scriptures. In contrast, the European Union was founded against its traditions of
war and conflict, a history that it is trying to forget and not repeat. The third
incompatibility outlined is the nationalistic tendency that has served the Orthodox
Church throughout history, but may be a hindrance to the Europeanization of
Romania. Fourth, there is the Orthodox tendency to discourage civic engagement.
Social solutions typically come from the state, therefore, unlike the European
Union, there is no need for the church to stimulate voluntary associations and there
is especially no need for the church to ever be in political opposition. Fifth, they
outline the powerful inertia of habits where tradition is more important than the rule
of law and European norms. Issues such as corruption or nepotism are difficult to
dislocate since the Orthodox religious culture discourages change of any kind,
rather teaching people to accept and be satisfied with their present situation. This is
in direct contrast to a global, entrepreneurial culture of innovation, change, and
improvement that fosters economic development. The sixth tendency is the unifor-
mity of Orthodoxy, where non-Orthodox elements, people, and ideologies are not
trusted nor accepted simply on the bases that they are not Orthodox. Finally, there
seems to be an anti-modernity tendency, where the Orthodox faith rejects technol-
ogy and other modern instruments while glorifying the past.
Historically speaking, there have been significant positive contributions that the
Orthodox Church did have upon the Romanian society: in the later nineteenth and
early twentieth century, it was a major contributor to the unification of Romania
and, in a micro-sense, it had a positive contribution to the modernization of rural
Romania through education. Most importantly, I believe that Orthodox cultures
with appropriate reforms can have two positive contributions to twenty-first century
European culture. First, Orthodoxy can have an excellent impact by promoting tra-
ditional Christian values to shield against European atheism. The current economic
crisis is truly a “value crisis,” where western capitalism has departed from its found-
ing Biblical values such as hard-work, self-restrain, and altruism. Since the Orthodox
Church believes in those Biblical values, it will be a positive contributor toward a
Business Civil Society. Second, Orthodoxy has historically been very adaptive to its
geopolitical circumstances. It must recognize that the twenty-first century requires
a different approach built on collaboration and communication among all societal
stakeholders.
3.3.3 The Civil Society as a Government Counterbalance
The second utilization of a healthy Romanian civil society I would like to suggest is
the counterweighing of governmental negative tendencies both in the political and
administrative realms. Much like consumer advocacy groups who put a healthy
pressure on private firms and protect the rights of the consumers through awareness
campaigns and advocacy initiatives, the civil society has in the past put pressure on
elected officials and public administrators to reform. Frequently, there are misgiv-
ings about the abuses of political and administrative incumbency, and the public
assumes that a simple vote for the political opposition can repair all wrongdoing and
ensure future clean government. It is seldom realized that the negative, intrinsic
tendencies of current political powers will equally influence, effect, and tempt the
upcoming administration. Once in office, politicians seem to be guided more by
opportunism and circumstances than political ideology and their constituency
(Parker, 2004). The debate is increasingly about “democracy accountability” given
the realization that political parties at the left and the right of the spectrum are pro-
foundly influenced by the negative tendencies outlined above, and since the politi-
cal class is increasingly becoming a distinct and homogeneous group within our
society. This phenomenon may be exacerbated in Romania’s case, given its heritage
and culture more prone to particularistic behavior and the immaturity of its political
class. The revitalization of an independent, apolitical, nongovernment-dependent
business civil society could be one of the modern instruments that keep the current
political system accountable and reduce the chronic tendencies of corruption.
Historically speaking, many authors and philosophers viewed the civil society as
having the potential to counter-weight the negative tendencies of government and to
ensure accountable public administrators (Anheier, Glasius, & Kaldor, 2001; Foley
& Edwards, 1996). John Locke viewed civil society as the aggregate of the popula-
tion with whom government would enter into a “contract” based on trust, and who
had the chief responsibility of resisting any attempts of “unjust authority” (Locke,
1988). Hegel in his 1820 treaty “Elements of the Philosophy of Right” clearly sepa-
rated the state and the civil society, a term he initially called “buergerliche gesell-
schaft” or the more modern “Zivilgesellschaft” to emphasize the inclusiveness of a
community. He certainly proposed and advocated for a civilized and dialectical dia-
logue between the state and the civil society and believed that the two can and
should be mutually reinforced. Karl Marx utilized Hegel’s civil society concept
mainly for its economical utilization. In his view, society was to be split between the
base and the superstructure. By the base, or the civil society, he referred to the infe-
rior, almost mandatory stratus of society such as employee–employer relations and
the division of labor. Through superstructure, he underscored societies’ other ideas
and relationships and ideas such as culture, political power structures, institutions,
roles, and rituals (Marx, 1972). Alexis de Tocqueville attributed the vigor and effi-
ciency of the American democracy to the density of voluntary associations who
both organized themselves voluntarily to solve social problems and provided a
health “checkpoint” against government abuses.
Helmut Anheier, in his 2009 article, What Kind of Nonprofit Sector, What Kind
of Society? Comparative Policy Reflections, outlined three distinct influences that
civil society can and should have upon the government:
1. Neo-Tocquevillian social capital influence proposes an indirect, positive influ-
ence that civil society can have on governance. This is considered unintended
consequences of the activity of civil society that uninterestedly fosters the “hab-
its of the heart” in individuals through education, practice, and collective actions
based on “horizontal ties of social trust” (Putnam, 1993).
2. Social accountability stresses civil society’s role in providing oversight and gov-
ernment accountability through citizen empowerment and information. This has
been greatly aided by the powerful rise of the mass media and of inexpensive
telecommunication technologies within the context of citizens’ disillusionment
with their governments (World Bank, 2000).
3. The steersmen approach, mainly coming out of NPM, perceives civil society as
a healthy competitor, or at least a viable alternative to social welfare services
(Osborne and Gaebler, 1992).
Michael Johnston, in his 2005 book, Civil Society and Corruption: Mobilizing for
Reform, offers an outline that, if properly contextualized, can be useful for analyzing
Romania’s case. Writing a decade earlier, Jean Cohen and Andrew Arato also high-
lighted the civil society’s role in shaping the new governments transitioning from a
totalitarian regime to young and inexperienced democracies. In Romania, the transi-
tion from totalitarianism to democracy is relatively complete; however governance,
the perception and the quality of public services, and the high levels of corruption are
still matters of concern (Badea, 2012; Frederick, 2009; Schroth & Bostan, 2004). A
number of authors credit the anti-communist revolutions to the sporadic movement
of civil society in the region, yet there are significant reservations regarding its func-
tionality and development after the revolution (Rau, 1991; Dahrendorf, 1997). The
paradox of good governance in Romania is that it registered impressive success in
the first years of the transition, only to languish afterwards at levels below the aver-
age governance scores of OECD, despite international assistance, EU conditionality
and finally successful EU accession. One possible explanation may be that the civil
society in Romania was adequate for overthrowing the communist regime, but it was
less effective in ensuring wholesome governance, improve the rule of law, and curb
corruption, given the cultural background and history (Miller, Grødeland, &
Koshechkina, 2001; Rose-Ackerman & Kornai, 2004; Treisman, 2000). The World
Values Surveys in 2000 and 2008, along with other authors, characterized the regional
civil society as “extremely weak” in participation, intensity, and influence. The cur-
rent civil society has very little connection with prerevolution civil movements, and
is perceived by society at large as a small elite group of former politicians and do-
nothing intellectuals (Bruszt, Campos, Fidrmuc, & Roland, 2010; Howard, 2003).
According to Michael Hopkins in his 2012 article Romania’s Civil Society and
its Moral Underpinnings: The Symbolic Discourse of a Post-Socialist State the
causes of this decline and ineffectiveness may be both cultural and social. Culturally,
the Orthodox religion does not encourage much civil participation, especially not as
government oversight, since the state is often confused with the church and vice-
versa. There is limited encouragement and effort into building a universal system
that benefits all individuals alike; instead people tend to solve their and their
“kin-network” challenges by attempting to make the state system work for their
particular situation. As a result of this mentality and cultural expectation, most of
the individuals who initially constituted the revolutionary civil society entered the
political competition through numerous political parties. Finally, there is the argu-
ment that limited personal financial resources discourage individual civic participa-
tion, as Romanian society instead invests its time and energies into increasing
personal net worth (Inglehart, 1997).
Today’s realities are in stark contrast to the initial expectations of 1989 when
civil society was presented as the ideal instrument to reform corrupt and inefficient
governments, to strengthen human rights, and to promote governance generating
economic prosperity and democracy (Ash, 1990; Clark, 1990; Esman & Uphoff,
1984; Keck & Sikkink, 1998; Michael, 2004; Riddell & Robinson, 1995). During
the past two decades, Romanian civil society has rather discredited itself in the eyes
of the general public by being perceived as yet another western, untamed capitalist
instrument imported for the benefit of elites to the detriment of the masses. Instead
of operating a healthy civil society, educating the Romanian public regarding their
new rights and responsibilities, the revolutionary civil society formed numerous
political parties and actively engaged in “runaway state-building,” competing
with each other through clientelism and state exploitation, not political ideology
(O’Dwyer, 2006). Clientelism is when access to public resources is controlled by
politicians and delivered to their “clients” in exchange for loyalty and support
(Eisenstadt & Lemarchand, 1981; Eisenstadt & Roniger, 1984).
Clientelism as a phenomenon is surprisingly pervasive and resilient, practiced by
all political parties, and is perhaps the main reason for the underdevelopment of
trust, social capital, and civil society. It significantly hinders the objective political
development since association is based on loyalty and interest instead of common
values and ideology. Ironically, democracy—the chief goal of the Romanian civil
society before 1989—seems to produce more not less corruption considering all the
opportunities presented by the shortcoming of NPM and the availability of European
funding. Without a healthy civil society built on objective ideologies and comprised
of economically independent members, the young Romanian democracy became a
regime of “competitive particularism” rather than a polyarchy (North, Wallis, &
Weingas, 2009; Rothstein, 2009). The communist elites initiated and managed the
transition for their own benefit, with public assets as the main spoils. Some authors
perceived the government more as a “grabbing hand” than an “invisible hand,”
deliberately promoting partial reforms so it could control the transition (Frye &
Shleifer, 1997; Hellman, Jones, & Kaufmann, 2000). Cliental public jobs, public
spending, preferential concessions, privatization right, market advantages and pref-
erential regulation contributed to the propensity of corruption and hindered the
development of a healthy and productive private sector.
The positive contributions of Romanian civil society were not properly articu-
lated; instead the public became aware only of its abuses, shortcomings, and the
double standard of those engaged in it (Hopkins, 2012; Stan, 2012). Regardless of
the shortcomings and the disappointments of the Romanian civil society, its basis
on healthy principles is an inexpendable instrument in culture creation and gov-
ernment counterbalance. In contrast to western civil society—a concept that
must be revitalized in the European Union as well—Romanian civil society
lacks an independent institution to be built upon (Wallace, Pichler, & Haerpfer,
2012). In the west, that institution has been the church for the most part, along
with its auxiliary medical, social, and educational systems that promoted posi-
tive, unselfish social values of altruism and individual responsibility. May I sug-
gest that a possible flaw of the Romanian civil society may be that it did not
adequately portrayed its altruistic nature and it did not engage in cultural values
creation, informal education nor mentoring forcefully enough. This is not only the
case for Romanian but for Europe as a whole where public administration reform
may consider the inclusion of religious organizations and the civil society in gen-
eral (Armstrong, 2008; Kohler-Koch, 2009).
Though we do not have a precise mechanism through which civil society can
directly curb corruption, we may consider R. Klitgaard’s insights in his 1991 book,
Controlling Corruption. According to him, corruption takes place when there is a
monopoly on power, on discretion by government officials, and a lack of account-
ability and transparency. In other words, “corruption is high when discretion is great
and accountability is low.” The civil society can and should sentinel against corrup-
tion and inefficiency, and diminish them through accountability and transparency.
Corruption is a function of the available resources such as the public budget, natural
resources, governmental jobs, foreign aid, etc., and limiting constraints such as an
independent justice system, and cultural and universally applied ethical norms
(Lambsdorff, 2007; Nye, 1967; Rose-Ackerman, 1999).
The profound, though more indirect and long-term, consequence of a vibrant
civil society is fostering the universally applied cultural norms and the expectations
of punishment for bad governance and corruption. Historically, effective civil soci-
ety struck a good balance between the creation of healthy norms and their enforce-
ment. It had at its disposal the following instruments:
1. Objective and universally applied norms of honesty, integrity, and social inter-
action. The most effective and sustainable norms were the Biblical teachings
encapsulated in the “10 Commandments” that properly respected and produced
“civil capital” (Fukuyama, 1995; Rose-Ackerman & Kornai, 2004).
2. A natural habit of engaging in formal or informal democratic collective actions,
where individuals could express their ideas, be educated on issues, and actively
solve societal problems. This practice of democratic engagement around com-
munity interests, purposes, and values occurred most naturally in a small parish
church where people naturally and regularly congregated, contributed ideas,
time, and resources to solve joint problems, and in the long-term produced what
Robert Putnam called “social capital” (Putnam, 1993).
3. A network of associations, volunteer-driven and self-sustaining, that put into
practices their beliefs and solved community problems. A major issue of these
associations was who funded them; if the funding came from the government,
their ability to provide healthy oversight often diminished, if a political group
funded them, they lost their impartiality. However, these associations were con-
sistently politically engaged by providing education and information (Almond &
Verba, 1963).
Romanian civil society has been impactful during the pre-EU accession years
and particularly in the passing of the “freedom of information” legislation, compen-
sating for the lack interest shown by the government. The Freedom of Information
legislation, initially part of NATO conditionality, was later adopted by the EU and
proved to be a very effective governance tool. Civil society pressure combined with
EU conditionality seemed to work well during the pre-accession period although it

seems to have stopped “the day after accession.” Many anti-corruption agencies in
Romania and the region lost their budgets while their leaders were sacked on
trumped-up charges. After the accession of 2007, the political elites began “retaliat-
ing for nearly a decade of anti-corruption imposed on them by EU accession” while
civil society lost its western sponsorship, mainly from American private founda-
tions and the USAID. The local national mobilization was too timid, underfunded,
and ineffective; for example, only 3000 people mobilized to defend the justice
minister Monica Macovei when she was replaced due to her relentless promotion of
anti-corruption initiatives.
The civil society can play a vital role in reforming a government and its public
administration by creating a healthy culture and positive social trust. Civil society
should work closely with a reformist government or international institutions that
have a vested interest in good governance. Effective civil society initiatives tend to
have the following characteristics:
1. They target particular, visible, and quantifiable governance problems and pro-
poses specific changes in specific organizations or departments within a specific
time frame (Vlăsceanu, 2010).
2. They engage the mass media and the internet community early on and maintain
mutually beneficial, objective and noncommercial relationships. Generally
speaking, broad-base, international coalitions are most effective in accomplish-
ing a specific aim (Hopkins, 2012).
3. Funding, especially if it is from outside the country, does not determine the
agenda, just the speed and the magnitude of the initiative. Especially effective
and sustainable are the grassroots initiatives, with a diverse and broad donor and
volunteer base (Wallace, Pichler, & Haerpfer, 2012).
4. They create a political environment where politicians and bureaucrats brand
themselves as incorruptible in exchange for public recognition and votes. They
contribute to the creation of healthy service and political competition, best prac-
tices, and policy benchmarks such as hierarchies of services integrity, tops of
administrative transparency and responsiveness, ranking, etc. (Stan, 2012).
Ineffective civil society initiatives are primarily due to nonconcrete projects and
objectives, where corruption and inefficiencies are spoken of in general and imper-
sonal terms. Second, they often address the wrong problems, or only their symp-
toms, given their foreign, noncontextualized perspectives. Thirdly, sometimes there
is a conflict of interest within civil society, especially its modern, transnational ver-
sion. The same NGO will be hired to consult the government in drawing up its
governance best practices but then also become its auditor, charged with verifying
if those practices were put in effect. Fourthly, there is a significant challenge for the
funding of civil society and its anti-corruption initiatives. For instance, the EU pol-
icy is such that funding will mainly be distributed through governments, hindering
the ability of civil society to objectively monitor the quality of governance and in
fact making civil society just another agency of the government.
3.4 The Business Civil Society and the Creation of an Entrepreneurial Ecosystem 103
In the view of this author, the revitalization of the Romanian civil society ought
to begin with its funding. Individuals and especially businesses seem to complain
about corruption and bad services, but seldom engage in civic and voluntary
problem-solving and public education initiatives. The Romanian business sector
does not have a history and tradition to support civil society initiatives given the
overall lack of mass education concerning civil society responsibility. Regardless of
the efforts undertaken to involve the business community by the international aid
agencies, business still play a insignificant role in anti-corruption initiatives and
volunteering is still a discredited concept.
From a social perspective, the young generation (millenniums) are globally more
interested in social causes than traditional, profit-maximization behavior. The
advent of social media such as YouTube, Facebook, Twitter, etc. are making it
socially acceptable, even recommended for young people to be involved in civil
activities. The civil protests of 2011 are but a sign of the young generation’s para-
digm shift. Worldwide and especially in the western world, there seems to be a
return to spirituality and social conciseness with young people engaging in private
social initiatives such as teaching and short-term humanitarian missions. In the West
this social conscience is being educated and stimulated by business leaders and
celebrities alike, who promote social responsibility and involvement through inno-
vative public–private initiatives and social entrepreneurship actions. Given the
interconnectivity of the global community, these social trends are increasingly pres-
ent in the Romanian society with the new generation being willing and able to
engage in a different form of social activism. Private firms the world over, including
in Romania, are responding to these social pressures by adopting various forms
of Corporate Social Responsibility (CRM) given their recognition of the limits of
traditional government and the threat of large-scale socialism.
3.4 The Business Civil Society and the Creation

of an Entrepreneurial Ecosystem
The Corporate Social Responsibility (CSR) trend is an opportunity that public admin-
istration reformers and civil society pundits must not waste. The fact is that while two
decades ago Romanian business community was almost inexistent and noninterested
in social matters, global trends seem to indicate that today it is both more receptive
and in better financial position to engage in social initiatives. A fundamental mistake
would be to view the business community simply as a financing mechanism without
any ideological contribution to the reforms needed in both the public sector and civil
society. As I have outlined earlier, the major contribution of the business sector
should be an entrepreneurial mentality, not necessarily more funding.
This concept is artfully captured by Charles Murray in his 2011 book, Coming
Apart: The State of While America 1960–2010 that offers an in-depth explanation
for the recent decline of traditional western civilization in the USA and implicitly
the European Union. Among others, he cites the tremendous “cultural divide”
between the values (mentality) of the wealthy and the rest of the population; the
decline in “religious and family values” and the dangers of “the state replacing the
community.” The fundamental cause of this decline, according to Murray, has been
the physical and ideological isolation of the upper class, which he defines as the
wealthiest 5 % of the population working in managerial positions, the professions,
media, and politics. These individuals are rich because they are “exceptionally
clever,” given that they have been educated by the best universities in the world.
At those Ivy-League universities they also intermarried, giving their children not
only wealth but more importantly an intellectual and social network advantage.
Traditionally, the wealthy of the west, given their Protestant beliefs, did not separate
themselves from the poor simply by throwing money at their social needs, but
instead engaged in industrious enterprises that were “mentality transfer laborato-
ries.” In the popular imagination, this was best captured by the Horatio Alger “rags-
to-riches” books, where poor, hard-working individuals were given the opportunity
to become wealthy through enterprising activities learned from their wealthy and
engaged employers (Linder, 2010). As far back as the nineteenth century, Alexis de
Tocqueville marveled that, in Protestant America, the rich do not stand detached
from common people.
However, starting with the “Great Society” programs of the 1960s and the escala-
tion of government involvement, this is no longer true. A tacit agreement was bro-
kered by western governments: the rich would pay an ever-increasing portion of their
income in mandatory taxes while in exchange they would get physical and ideologi-
cal seclusion from the poor. The poor would obtain an ever-increasing level of gov-
ernment-provided social benefits in exchange for not wanting to enter the super-class.
The government assumed the responsibilities of civil society with funding from
mandatory taxes, with the result that mentalities and attitudes among the poor “expe-
rienced a downward spiral generating chronic poverty and unemployment.” The
entrepreneurial spirit that produced “the western experiment” is still operational, but
only among those who are wealthy, removing any voluntary incentives to work on
social problems since the government is paid for this and possesses the expertise.
Two of the unintended consequences of this “new social contract” outlined by
Murray are that, without the accountability of the civil society, governments intrinsic
and historical tenancies of corruption and inefficiency were left unchecked. Second,
the “super-class,” lacking a civic conscience, uses its intelligence, resources, and
connections to pay as little taxes as possible, living comfortable in the “shady area of
the law” and exploiting any and every loophole possible, therefore denying the state
its expected budget and forcing it to borrow against the future.
I would like to argue that this state of affairs is a grave danger to the sustainabil-
ity of western democracies and Romania. Perhaps, this social contract between the
citizens and their government could be revisited in the effort to reform government
and public administration. Significant social components of western dysfunctional-
ity are unemployed individuals, raising children in single-home settings with a lim-
ited religious concise. In lower-class neighborhoods in Romania and Europe, the
unity among communities based on family, pride in work, and faith has diminished
significantly, if it ever existed. Unfortunately, these habits and values, conspicuous
in their absence, constitute the historical recipe for democracy, economic prosperity
and upward mobility. Seemingly, a growing proportion of the European and
Romanian population were never taught, nor did they see modeled the virtues
required by a functioning, productive member of a free democratic and capitalistic
society. Without going into too much detail, the mass media and television have
been a negative influence, only highlighting the negatives of the political and the
business class, seldom taking the time to educate the population. I humbly suggest
that public administration reform should include stimulation, education and aware-
ness initiatives aimed at the Romanian and European elites—in both business and
government—to communicate to them their responsibilities towards society. Their
most valuable contribution is not necessarily additional taxes, but instead they
should find creative and innovative venues to transfer their mentalities and know-
how to the less fortunate. It is they, especially those successful and wealthy business
executives that should forge the revitalization of civil society initiatives. Unfor-
tunately, there are no blue-prints for these initiatives and they should be voluntary,
fragmented and highly contextualized to best and inexpensively respond to the local
needs. Historical paradigms and positions will have to be revisited and a lot of trial-
and-error will take place, but the long-term benefits would be the creation of a
world-class, modern, and global entrepreneurial Romanian ecosystem. This initia-
tive is both challenging and rewarding; while it does not necessarily cost more
money than traditional reform initiatives, it does require for both the public and the
private sectors to look inside and realign their paradigms from a competitive mode
to a collaborative, complementary approach. In the latter sections of this chapter I
will expose upon CSR and outline some initiatives coming from the private sector
that public administrators can build upon.
3.4.1 The Creation of an Entrepreneurial Ecosystem
My first suggestion is that public administrators and the private business sector in
Romania agree upon the importance of creating an entrepreneurial ecosystem that
will benefit society as a whole. In the 2010 article, How to Start an Entrepreneurial
Revolution, author Daniel Isenberg states: “to ignite venture creation and growth,
governments need to create an ecosystem that supports entrepreneurs.” This entre-
preneurial ecosystem consists of specific, yet difficult to define elements such as
private initiatives, tolerance to risk and failure, capital markets, and understanding
and open-minded customers. These characteristics are predicated upon culture and
the available leadership within a nation, and they develop with patience and popular
education. Isenberg (2010) outlines a few steps that public leaders must keep in
mind when developing and entrepreneurial ecosystem in their nations:
1. Do not imitate. There is a temptation to simply adapt popular buzz words such as
“business incubators” or “knowledge-based sectors” without actually realizing
what they mean or how they can be accomplished. The previous decade of
limited European success with such government-sponsored initiatives proves

that imitation is not necessarily the best option. The fact is that governments can-
not import entrepreneurial ecosystems from developed nations; rather they must
indirectly foster them.
2. Shape the ecosystem around local conditions. Successful economies such as
Israel, Singapore, and Chile developed their entrepreneurial ecosystems based
upon local conditions, natural resources, and most importantly culture. In the
case of Romania, there seems to be an argument that Romania’s natural competi-
tive advantages lie in agriculture and tourism. While there is little doubt that both
of those areas present tremendous opportunities, my observation is that Romanian
culture actually opposes tourism and agriculture development. The lack of infra-
structure and the negative perception of most Romanians about the economics of
rural life are but a few of the local cultural factors that may hinder development
in those areas. Further, neither one of these sectors provides numerous high-
value jobs; instead the IT (information technology) sector in Romania may be a
better alternative.
3. Engage the private sector early on. The government cannot build an ecosystem
without adequate input from the private sector, given its natural propensity to
inefficiency and corruption. In the case of Romania, I would suggest a closer
collaboration with the private sector and the Romanian Diaspora, in an attempt
to emulate the Israel, Chinese, and Indian models.
4. Favor high-market potentials with export abilities. There is a real danger in the
government’s quest to develop an entrepreneurial ecosystem by transforming the
initiatives into more money-wasting programs aiding political clientele and spe-
cial interest groups. Instead, government policy ought to focus on sectors of the
economy that have export potential. In the case of Romania, our economy has
the double advantage of having an open market in the European Union aided by
a strong supporting Diaspora, as well as traditional economic relations with
vibrant economies such as China, Turkey, and Russia.
5. Acknowledge and tackle cultural hindrances early on. In relatively short periods
of time, nations such as Ireland, Chile, and India have been able to transform
their nonentrepreneurial cultures to foster economic growth and entrepreneurial
behavior. The cultural excuse utilized against political and economic reforms in
Romania condemns our society to a middling nation within the European family,
and it should be addressed through a coordinated effort that I will outline in the
next section.
6. Do not flood firms with money. The inexperienced public administrator may view
entrepreneurial activity simply as a function of investment capital, and may be
tempted to flood new ventures with money while protecting them from global
competition through protectionist measures. Research and experience shows that
without “natural selection,” new ventures forever will be dependent upon the
government for their very existence. Instead, governmental policies ought to
support, educate, yet still allow firms to naturally fail if they cannot achieve
self-sufficiency.
7. Allow clusters to grow naturally. I believe overinvolvement to be one of the

greatest temptations of public administrators who attempt to create healthy
entrepreneurial ecosystems throughout Europe. They tend to over-engineer entre-
preneurial behavior, which by its nature is chaotic and unpredictable. Silicon
Valley developed naturally, not because a US public administrator wrote a policy
paper outlining the exact nature of the IT cluster.
8. Provide a stable legal and bureaucratic system. Perhaps the single greatest con-
tribution the Romanian public administration can provide a Romanian entrepre-
neurial ecosystem is stability.
The entrepreneurial ecosystem that the Romanian public administrators should
consider along with the appropriate contextualization for Romanian culture and the
European condition is the example of the nation of Israel as outlined by Dan Senor
and Saul Singer in their 2009 book, Start-up Nation: The Story of Israel’s Economic
Miracle. Israel’s entrepreneurial revolution started in the late 1940s and was built on
a strong scientific community and the belief that science can contribute both to
national defense and economic prosperity. The 1967 weapon embargo led to mas-
sive investment in military R&D that created the Intelligence Signal Corp, along
with the office of “chief scientist” entrusted to commercialize military inventions
for civilian use. Most Israeli innovations and later start-ups can trace their roots to
military products, camaraderie, and organizational discipline. In 1977, the BIRD
Foundation was created by the Israel–American Diaspora to fund technology-based
product development between Israeli and US companies. In 1984, the Law for
Encouragement of R&D was passed, and by 1985 a number of venture capital firm
were established to finance new start-ups. It was this entrepreneurial ecosystem that
created the “Israeli Miracle:” beginning in 1972, over 160 firms have been listed on
NASDAQ—more than any other country outside of the USA and Canada. Billions
of dollars have been created and the world benefitting from innovations such as
USB memory sticks, instant messaging, and new generation of cardiac stents. It was
the entrepreneurial ecosystem that created those consumer products, and the wealth
that indirectly contributed to Israel’s growth. The parallels between Israel and
Romania might not be observable; however, there may be more commonalities than
meets the eye. Romania has a strong and historical commitment to science and
engineering; it has a large Diaspora in western Europe and North America, and is
predisposed to problem-solving and also committed to education (Wodak &
Fairclough, 2010). Further, our geographic location positions us very well to be a
broker between the East and West. Romania has historical commercial relations
with nations such as China, India, Russia, and Turkey, and it can easily serve as the
eastern gateway into the European Union.
3.4.2 Corporate Social Responsibility
The challenges posed to Romanian society by twenty-first century globalization are

too large and complex for traditional public administration to elucidate alone, espe-
cially the challenge of wealth generation, which is desperately needed to maintain
and increase the current levels of social commitments. In this section I will like to
recalibrate my argument towards the Romanian business community, who, I hope
can be persuaded by the Romanian public administrators to contribute to the better-
ment of the Romanian society in an untraditional and entrepreneurial way. Namely,
I would like to present arguments that would encourage the revitalization of a
business civil society which will foster long-term growth, instruct the general public
about the realities of globalization, and assume the traditional and beneficial role of
mitigating the activities of government. I am aware that in the previous two decades
the concept of the civil society has been abused by the private sector primarily for
tax benefits, but this does not mean that the concept’s intrinsic value has vanished.
Fortunately, the global business community is already involved in solving social
issues through CSR initiatives, a concept that I will briefly explain and contextualize
for the Romanian realities. I trust Romanian public administration reformers might
consider this business instrument as a worthy partner in building the Romanian
entrepreneurial culture and ecosystem that would generate an entrepreneurial soci-
ety and government. This middle ground between the public sector and the private
sector cannot be fabricated automatically: there are traditional animosities and mis-
trust between the public and the private sector, each condemning the other for the
ills of the Romanian society. However, the challenges of globalization and the cur-
rent economic crisis and the pressures of Europeanization may be the perfect storm
for nontraditional reform thinking.
In the 2010 article, The Political Role of Global Business and Civil Society
Actors—A Paradigm Shift in Business and Society and its Implications for CSR,
Governance and Democracy, authors Andreas Georg Scherer and Guido Palazzo
outline the necessity for a “political civil society.” Their message is primarily
directed at multinational corporations (MNC) that have a global business strategy
and an already existent commitment to CSR and a “compliance with societal expec-
tations” (Carroll, 1991; Strand, 1983; Whetton & Mackey, 2002). I believe that this
message can be extrapolated to Romanian and European firms that are most affected
by public administration corruption and inefficiencies, and have the most potential
to directly and indirectly reform it.
Throughout the world, during the past decades business firms have engaged in
activities traditionally regarded as governmental responsibilities (Margolis &
Walsh, 2003; Matten & Crane, 2005; Palazzo & Scherer, 2008). The generation of
public goods such as healthcare, education, security, nutrition, human rights, envi-
ronmental protection, self-regulation, and the development of ethical codes of con-
ducts are increasingly “business concerns” and part of the corporate strategy. For
instance, since 2000, over five thousand MNC subscribed to the UN Global Contract
to engage in self-regulation, recognizing that certain national legislators are unpre-
pared for the demands of globalization while some national governments are inca-
pable of producing basic public goods. Some authors go further and conclude that
business firms must become political participants in the global community since
neither traditional nation-states nor global institutions are sufficient to regulate and
manage the global economy (Detomasi, 2007; Kaul, Conceiçăo, Le Goulven, &
Mendoza, 2003; Matten & Crane, 2005; Scherer, Palazzo, & Baumann, 2006;
Scherer & Palazzo, 2007). Barber concluded in his 2000 article that: “we have
managed to globalize markets in goods, labor, currencies and information, without
globalizing the civic and democratic institutions that have historically comprised
the free-market’s indispensable context.”
In a twenty-first century polycentric global economy, the Romanian business
sector cannot afford to be absent from this provocation nor can the Romanian gov-
ernment afford to exclude itself from this debate. Instead, the two seemingly
opposed sides need to meet in a new and intelligent construct—the business civil
society, a space where each can contribute knowledge and resources to the creation
of prosperity and the instruction of the general public. I do realize that my proposi-
tion may seem idealistic and its implementation painfully slow, with results possi-
bly not appearing as quickly as we need them. However, it seems that for the past
two centuries Romanian reformers have attempted quick fixes with limited benefits.
I do not advocate the abandonment of traditional reform initiatives; I simply pro-
pose their complementation with long-term, cultural transformation initiatives
streaming from a civil society built on business principles and Global Work Ethic
(GWE) ethos.
The traditional literature on CSR is diverse, and even if there is no exact agree-
ment on a precise definition of for CSR, a number of key characteristics can be identi-
fied. Naturally, the economic perspective of CSR is the most influential, and stems
from the theory of the firm. This traditional, western economic view was built upon:
(a) The unambiguous separation of business and politics (Friedman, 1962;
Henderson, 2001)
(b) The fact that firms have a primary fiduciary responsibility to maximize profits
for their shareholders (Sundaram & Inkpen, 2004)
(c) Any and all social responsibility is to be assumed only if it contributes to
the increase of profit (Mackey, Mackey, & Barney, 2007; McWilliams & Siegel,
2001).
In traditional CSR, with its strict separation of private and public domains, the
responsibility for “externalities” such as social misery, environmental protection,
and the production of public goods were left to the state system (Friedman, 1962).
However, the assumptions of traditional CSR are obsolete and do not hold true
throughout the entire global economy. Governments cannot predict problems and
conflicts in society, nor formulate and enforce all the necessary regulations. In an
integrated global environment, firms, more so than individuals, have the mobility to
choose the optimal context of labor, society, and regulations for their operations.
MNCs are in a position to effectively escape local jurisdictions by playing one legal system
against the other, by taking advantage of local systems ill-adapted for effective corporate
regulation, and by moving production sites and steering financial investments to places
where local laws are most hospitable to them (Shamir, 2004).
National governments without the necessary experience and expertise seem to

be at the mercy of MNCs who are perceived as “merchants of foreign direct invest-
ment (FDI)” with the possibility, but often without the willingness, to engage in
transformational social responsibility. This global government competition for FDI

may lead to a “downward spiral” in social and environmental conditions of global
governance (Avi-Yonah, 2000; Roach, 2005; Scherer & Smid, 2000). The tradi-
tional concepts of CSR are built on strict separation of politics and business and a
narrow view of corporate politics (Baron, 2003; Hillman, Keim, & Schuler, 2004;
Keim, 2001). The shortcomings are analyzed in light of globalization’s realities;
however the dominant paradigm is still reactive as firms adhere to regulations
imposed by a state. The assumption is that the state functions as the selfless pro-
ducer of public goods and universally beneficial regulations, and this assumption in
post-communist Romania is not necessarily valid. F.W. Frederick in his 1998 arti-
cle, Business and Society, outlines this paradigm that may work in western, devel-
oped nations, stating that “companies could take their cues for publically desired
social action by adhering to the nation’s laws, public policies, and government
regulation, rather than relying on the social conscience of the firm’s executive
managers.”
Fortunately, in light of the 2008 global financial crisis, and given the apparent
bankruptcy of western-liberal capitalism, the global private sector is attempting to
reform itself. Most notably was the 2011 Harvard Business Review article, Creating
Share Value: How to reinvent capitalism and unleash a new wave of innovation and
growth by Michael Porter and Mark Cramer. They call upon the business commu-
nity to reexamine its traditional profit-maximization business strategy along with
CSR. They point to the fact that corporations no longer generate high-paying jobs
that have the double advantage of providing governments with a solid tax-base and
limiting the necessity of government-sponsored social programs for citizens.
Furthermore, modern corporations—especially in the banking and legal sectors—
have disproportionally enriched those at the top, attracting major social unrest. They
call for a paradigm shift where corporations would aim to create “share value” for
all societal stakeholders. The authors recognize both the cultural undercurrents cre-
ated by the “millennium” generation which is increasingly interested in the “greater
good,” and the pragmatic realities where government regulators are inclined to pass
additional and burdensome legislation to curtail abuses by business.
Scherer and Palazzo (2011) in the article mentioned above emphasize democracy
over ideology and suggest a different CSR paradigm:
Instead of analyzing corporate responsibility from an economic or an ethical point of view,
we propose to embed the CSR debate in the context of the changing order of political insti-
tutions. As we move from a Westphalian world that was ordered by and within nation states
to a world that is characterized by a post-national constellation, the division of labor
between governments, corporations and civil society does not remain stable.
They too challenge both the underlying assumptions of traditional CSR and the
traditional theory of the firm. The short-term, profit-maximizing strategy of the firm
leads to excess corruption and inefficiency, not to mention the de-legitimatizing of
business activity in the minds of the population and the risk of nationalization by
government. Instead they introduce the concept of “political CSR” as a criticism to
current CSR theory that, according to them, “does not sufficiently integrate the new
political role of private business.” Their definition of political activity does not refer
to traditional political lobbying or campaign contributions as those activities are
given for any firm over a certain size. Instead they focus intensely on the activity of
public goods production, where firms complement the activities of governments:
Globalization suggests an extended model of governance with business firms contributing
to global regulation and providing public goods. It goes beyond the instrumental view on
politics in order to develop a new understanding of global politics where private actors such
as corporations and civil society organizations play an active role in the democratic regula-
tion and control of market transactions… The decline in governance capability of nation-
states is partly compensated by the emergence of new forms of global governance above
and beyond the state. International organizations, civil society groups, and private businesses
in cooperation with state agencies, or without their support, have started to voluntarily con-
tribute expertise and resources to fill gaps in global regulation and to resolve global public
goods problems (Scherer & Palazzo, 2010).
The necessity of this activity may also be applicable to the European Union and
its newly integrated member of Romania. The Romanian public has a high level of
social expectations concerning education, healthcare, infrastructure, pensions, etc.,
and the mobility to choose among European jurisdictions. Given an ever shrinking
population and tax-base, the Romanian government has limited resources to meet
those obligations. The advent of mass-media technology further gives an increased
influence and political power to traditionally nonpolitical, nonstate participants
(Beck, 2000; Risse, 2002; Zürn, 2002). Initially, societal groups and NGOs have
skillfully used these new mediums to pressure governments in addressing societal
ills, but increasingly are targeting the business sector, which is more sensitive to
criticism and thus better motivated to become a public goods producer. The new
political corporate social responsibility, illustrated in Table 3.1, attempts to fill the
gaps in traditional corporate social responsibility and revises the traditional theory
of the firm. Companies still have a short-term objective to maximize shareholder
wealth, but this activity must now be undertaken in the context of maximizing
stakeholder benefits. To quote Wolf: “Economic globalization creates challenges for
political steering which exceed the capabilities of any single state. It has produced
a growing need (and claim) to make use of the problem-solving potential of non-
state actors in order to master these challenges more effectively” (Wolf, 2008).
Scherer and Palazzo propose the following amendment to the traditional CRM
research agenda so that new global realities can be fully incorporated. They, along
with other authors, rightfully argue that the adoption of political corporate social
responsibility can actually be more financially profitable for a firm in the long-run,
and most importantly give it a sustainable competitive advantage. They propose the
following paradigm adjustments within the business community:
(a) From national to global governance. There is a new global institutional context
that has diminished the regulatory power of traditional governments and stimu-
lates nonstate participants to assume state activities.
(b) From hard law to soft law. In the new global institutional context, governments
lose their regulatory power (hard power), therefore self-regulation (soft law)
must be utilized by private participants. As a consequence, self-regulation is
becoming a key issue in the CSR debate (Cragg, 2005).
Table 3.1 Characteristics of the instrumental and the new political approach to CSR
Traditional CSR Political CSR
Governance model
Main political actor State State, civil society, and
corporations
Locus of governance National governance Global and multilevel
governance
Mode of governance Hierarchy Heterarchic
Role of economic Dominance of economic Domestication of
rationality rationality economic rationality
Separation of political High Low
and economic spheres
Role of law
Mode of regulation Governmental regulation Self-regulation
Dominant rules Formal rules and “hard law” Informal rules and
“soft law”
Level of obligation High (enforcement) Low (voluntary action)
Precision of rules High Low
Delegation to third parties Seldom Often
Responsibility
Direction Retrospective (guilt) Prospective (solution)
Reason for critique Direct action Social connectedness
(complicity)
Sphere of influence Narrow/local Broad/global
Legitimacy
Pragmatic legitimacy High (legitimacy of capitalist Medium-low (capitalist
institutions via contribution institutions under
to public good) pressure, market failure
and state failure)
Cognitive legitimacy High (coherent set of morals Medium-low
that are taken for granted) (individualism,
pluralism of morals)
Moral legitimacy Low High-low (depending
on the level of
discursive engagement)
Mode of corporate Reactive (response to Proactive (engagement
engagement pressure) in democratic politics)
Democracy
Model of democracy Liberal democracy Deliberate democracy
Concept of politics Power politics Discursive politics
Democratic control and Derived from political Corporate activities
legitimacy of corporations system, corporations are subject to democratic
de-politicized control
Mode of corporate Shareholder oriented Democratic corporate
governance governance
Source: Scherer and Palazzo (2010)
(c) From social liability to social connectedness. Accepting the visible limitations
of traditional governments, societies who formerly viewed business activities
as a societal liability (a necessary evil), increasingly expect the private sector to
take responsibility for a greater number of social and environmental externali-
ties (Crouch, 2006; Young, 2008).
(d) From cognitive or pragmatic legitimacy to moral legitimacy. On the issue of
business legitimacy, traditional CSR assumed that legitimacy was accomplished
by adherence to national laws and regulations. In its absence, or when con-
fronted by illegitimate government regulations, businesses will have to rely on
moral legitimacy.
(e) From liberal democracy to deliberative democracy. The involvement of busi-
nesses in the political process is already causing concerns regarding a democ-
racy deficit. The idealistic perspective is that corporations are too powerful and
too dangerous to be allowed to engage in the political process. The deliberate,
pragmatic perspective is that these businesses already are involved in the politi-
cal process; it’s only a matter of acknowledging their involvement.
Various scholars have discussed these new public–private dynamics where dem-
ocratic governments have decreasing power to regulate, while the general public
with the aid of mass-media technologies is able to hold unaccountable business
managers responsible for social ills. Misangyi, Weaver, and Elms (2008) in their
article, Ending corruption: The interplay among institutional logics, resources, and
institutional entrepreneurs, suggest that corporations are in the best position to curb
government corruption and to develop a societal, entrepreneurial spirit that in the
long-run can benefit the whole of society. These governance initiatives are either
private–public or private–private partnerships of multiple stakeholders and often
have the tangible goal of establishing effective systems of reporting, auditing, and
monitoring as well as instructing the general public about the new globalization
norms (Utting, 2002). Political scientists who traditionally focused only on state
participants and international institutions are now increasingly acknowledging the
necessity of a new type of society that can facilitate this new civic role for the
private sector (Risse, 2002; Ruggie, 2004). Kaul et al. (2003), argue that global
challenges like international labor standards, human rights, fighting corruption,
environmental protection, public health, and education must be approached in a
voluntary and decentralized process involving governments, NGOs, international
institutions, companies, workers, and even consumers. The business community is
sufficiently pragmatic to realize that its success depends upon society’s success and
that an entrepreneurial culture would benefit all societal stakeholders. Convincing
the Romanian business community to get involved in these types of civil initiatives
and to voluntarily finance them would generate a closer connection between the
public and the private sectors of the Romanian society.
3.4.3 The Romanian Business Civil Society and Its Benefits
My observation regarding Romanian society in general and the business community

in particular is that it operates on the premise and with the assumption that a com-
mon and real understanding exists regarding global capitalistic society. It assumes
that society naturally understands rudimentary concepts such as “democracy,”
“liberty,” “common good,” “patriotism,” “citizenry,” “rule of law,” “transparency,”
“industriousness,” “risk-taking”; “hard work,” etc. and that someone, somewhere,
is educating the public regarding the true meaning and applicability of those con-
cepts. Unfortunately, these values vital to the functioning of the Romanian society
and economy seem to be lost and seldom taught. The nation, especially through its
mass media, seems to be actively engaged in denigrating itself and convincing itself
that the only logical conclusion to the “Romanian Project” is abandonment. The
promotion and highlighting of the values and behaviors that have, and can make
the Romanian society entrepreneurial, I propose to be the ultimate responsibility of
the Romanian business civil society. Naturally, the production of other public goods
such as healthcare, education, research, and development should be of concern, but
its primary role should be to facilitate and teach the general public the principles of
healthy entrepreneurial behavior and appropriate patriotism.
Popular entrepreneurial education strengthens the economic growth of the
nation, gives power and resources to the government, speeds up modernization and
infrastructure building, and lifts people out of poverty and off government-assisted
social programs. Traditional entrepreneurial education initiatives aim to simply
increase entrepreneurial activity, which often refers to nothing more than the act of
starting a new business without any concern for its quality (Văduva, 2004). Most
research monitoring entrepreneurial activity at the macro-level counts the number
of start-ups per 1000 people, new patents registered, firms listed on the stock
exchanges, or some other measure dealing just with the start-up of new companies.
While new start-ups are important, they are the indirect result of entrepreneurial
mentality. A national Romanian entrepreneurial mentality, build on historical
Romanian values such as “survival” (descurcareala) and “side-work” (ciubuc)
would entail entrepreneurial and creative problem-solving across the board.
Individuals possessing such thinking would be positive contributors whether as
public workers, employees in a private firm or simple concerned citizens. I propose
that public administrators would enable and encourage their private business coun-
terparts to engage in active voluntary, nationwide mentoring and educational initia-
tive in partnership with local governments, educational institutions, NGOs and civic
organizations. The entrepreneurial mentality that ought to be generated is the appro-
priate understanding of globalization values plus the impetus to action by individu-
als creatively and voluntarily solving their and their communities’ problems (social,
religious, economic, etc.) Individuals with an entrepreneurial mentality will assume
the responsibility for their own lives, and will not wait or blame someone else for
their condition. They will be self-confident, willing to learn, willing to fail, willing
to try new things, and eager to develop themselves and the resources around them in
an adequate response to the challenges of globalization. These entrepreneurially

minded individuals would in turn provide both the public and the private sector with
the human capacity outlined throughout my research, and would be able to build
the needed institutions of Romania from the inside out. The Romanian business
community should contribute adequate, articulate, and qualified volunteers who can
teach and mentor in schools, public libraries, city halls, etc. (Bottom Up). The
Romanian government ought to publicize this initiative and support the necessity of
an entrepreneurial education system (Top Down). It should use its “bully-pulpit” to
highlight its importance through national media campaigns and promote healthy
civic and business education.
As to be expected this field of study is fairly young in Romania and is at the
intersection of economic, political and social studies. One of the best studies, titled
Representing Corporate Social Responsibility. A Case study of Romania’s Top 100
Companies, published in 2011 by Alin Stancu, Liviu Chelcea and Tamara
E. Baleanu, concludes that:
Corporate social responsibility in Romania emerges as a corporate effort at the
boundary between compliance to the explicit requirements of society and proactive
engagement in solving problems of the community and other stakeholders. Generally
speaking, we can highlight the following features of CSR discourse and practice in
Romania: (1) The willingness to obey the law and treat fairly acknowledged stake-
holders; (2) The adoption of the business case of corporate social responsibility which
positions CSR as a competitive advantage: (3) The representation of community as
the main stakeholder and CSR beneficiary and ignoring those stakeholders that are
deemed secondary to the business activities; (4) The weak integration of corporate
responsibility in the broader strategic vision of the firm; (5) The weak coordination
with other social actors—civil society, governmental institutions; (6) The use of orga-
nizationally inexpensive CSR instruments (such as philanthropy).
Romanian firms are not alone in either “simulating” that they have a social
conscious and a social interest or utilizing their so-called CSR initiatives as veiled
advertising and public relation campaigns. From a purely financial point of view,
my proposed business civil society is nothing more than an additional cost, and
most firms operating on already low margins cannot afford to spend. We may argue
that even the best known global firms who are active producers of public goods such
as education, health care, infrastructure, etc., are doing it out of necessity not a
higher moral calling. This is why I believe religion to be such an important motiva-
tor; corporations will most likely not have a natural motive to contribute above and
beyond what the law demands of them. However, if the business actors were moti-
vated by Christian values, they would have an inherent motive to do good towards
their kind. The teachings of Jesus Christ, the founder of Christianity can be best
summed up in the Golden Rule So in everything, do to others what you would have
them do to you (St. Mathews 7:11). I am not at all arguing that only Christian busi-
ness people will be good practitioners of the business civil society, simply that those
who claim to be Christians have an additional incentive. There is also a pragmatic,
even if longer term, motivation for Romanian businesses to actively participate
in the revitalization of the Romanian business civil society. The current economic
crisis is calling into question the legitimacy of business initiatives, part of an

ongoing “legitimacy debate” of liberal capitalism and the dynamics between corpo-
rations and their societal environments (Boddewyn, 1995; Gilbert and Behnam,
2009;; Henisz & Zelner, 2005; Hess, 2008; Rasche & Esser, 2006; Roloff, 2007;
Stansbury, 2008). In times of extreme crisis and budgetary constraints, societies
tend to disintegrate into anarchy, with the wealthy business people as the convenient
villains, leading to the wholesale nationalization of private firms.
Many authors are calling upon the civil society, instead of the government, to
move onto center stage and mitigate the interaction between corporations and soci-
ety (Den Hond & De Bakker, 2007; Doh & Guay, 2006; Frenkel & Scott, 2002;
Pearce & Doh, 2005; Spar & La Mure, 2003; Teegen, Doh, & Vachani, 2004; Yaziji
& Doh, 2009). The significant difference between traditional public administration
and the civil society I support is the voluntary and thus controllable nature of the
civil society. Philosophically speaking, inefficiency or corruption within public
administration and/or government does not justify or legally allow any citizen to
stop paying their taxes. This monopoly and assurance of tax revenues may decrease
the government’s impetus to reform itself and may even lead to extreme forms
where government officials see themselves as the masters over the taxpayers’ lives,
knowing fully well that the taxpayer will not turn into a voter until the next election
cycle. In contrast to the public sector, the voluntary sector is more motivated towards
efficiency and effectiveness since it knows that its donors have a legal and social
right to stop making financial and voluntary contributions. This advantage is
somewhat diminished if the civil society initiative is dependent upon government
funding that tends to be more stable than individual donations.
The moral legitimacy of business traditionally has been a result of the social
construction (Ashforth & Gibbs, 1990; Suchman, 1995), that is conformity with
social rules, norms, or traditions. M.C. Suchman, in his 1995 article, Managing
Legitimacy: Strategic and Institutional Approaches, suggests that legitimacy stems
from three different sources:
1. Cognitive legitimacy is when the actions of an organization are perceived as
unavoidable and necessary and its acceptance is based on unconscious and gen-
erally accepted assumptions.
2. Pragmatic legitimacy is based upon a calculation of self-interest by individuals
who assign legitimacy to an organization if and when they benefit from its
behavior.
3. Moral legitimacy is built upon a moral and voluntary exchange of arguments
determining if an institution and its actions can be considered socially acceptable
as it adheres to some higher moral code.
Cognitive and pragmatic legitimacy, the traditional concepts upon which CSR
is built, come under significant pressure: firms operate within numerous and con-
tradictory legal and moral contexts, making adherence to any universal standard
difficult. Increasingly, the only viable alternative upon which to build the new
business civil society is moral legitimacy. This refers to the adherence to a set of
objective moral standards such as the Judeo-Christian Ten Commandments, that
have historically been proven to work, and which will generate moral behavior in
firms’ procedures, structures, and leaders. It has a significant social component,
where the responsibility of the corporation is fully assumed and its resources are
fully utilized under the Puritan ethic of “work as much as you can, earn as much
as you can, and give as much as you can.” In contrast to the short-term and some-
times selfish logic of pragmatic legitimacy, moral legitimacy “reflects a pro-social
logic that differs fundamentally from narrow self-interest” (Suchman, 1995). It
requires a logical explanation and education of the general public on the moral
legitimacy of capitalism, globalization, and corporate activities. It gives adequate
credit and remuneration to all constituencies and societal stakeholders. The moral
legitimacy of the business civil society is based upon a healthy and transparent
communication process and the “forceless force of the better argument”
(Habermas, 1990), not on the power of those taking part in the debate. This new
and constructive business civil society that fosters collaborations among busi-
nesses and NGOs can be seen as a key driving force of the growing importance of
moral legitimacy (Palazzo and Scherer, 2006; Scherer & Palazzo, 2007).
The necessity of moral legitimacy for business has significant implications in
the field of International Relations, where there is a growing necessity to “govern
beyond the state” (Cutler, 2001; Hurd, 1999; Wolf, 2005). Traditionally, International
Relations studies bestowed legitimacy only upon the state without taking into con-
sideration the contributions of the private sector. New schools of International
Relations thought increasingly emphasize the importance of communication and
populist education, a role better fitted for nonstate and thus objective actors such as
NGOs (Crawford, 2002; Deitelhoff, 2009; Müller, 2004; Risse, 1999, 2004). The
ideal context for such a debate is a neutral, equidistant platform where public and
private participants can meet and debate ideas instead of political positions. A few
examples of such global initiatives include the Fair Labor Association or the Forest
Stewardship Council that establish an institutional context in which the use of power
must be replaced by influence. They establish governance and financing structures
that try to balance the interests of governments, businesses, labor unions, and the
environment. Further, as Fung (2003) suggests, these types of multi-stakeholder
deliberations increasingly resemble de Tocqueville’s “school of democracy” where
global participants learn to creatively solve problems together.
Finally, in my opinion, the creation and the nurturing of a business civil society
by both the government and the private sector has the imperative of guarding
democracy in Romania and Europe in the long-run. Capitalistic societies, by defini-
tion, require firms that generate a profit, provide employment, and pay taxes within
a well-established system of functioning rules and regulations. Developing nations
do not always possess that well-established legal system and, as in the case of
Romania, also struggle with the true challenge that is implementation of laws
already on the books. In the historical model of liberal democracy, only the state has
the mandate to establish and enforce laws; corporations and civil society are
excluded from such dialogue for fear of selfish manipulation. The historical contract
is between the state and its citizens, where the citizen is a private person pursuing
his/her private interests in the private but also the public sphere. The legitimacy of
such a system is adherence to the rule of law and its governance through representation
and periodic elections (Elster, 1986). However, in the globalized world of the
twenty-first century, such strict separation of political and economic realms does not
hold any more; therefore I incorporate my business civil society in the deliberate
democracy model (Bohman & Rehg, 1997; Cohen & Arato, 1994; Gutman &
Thompson, 1996, 2004; Habermas, 1996, 1998). This model incorporates the con-
tribution of all stakeholders in our new polycentric world. Politics in its broadest
sense no longer occurs—if it ever has—exclusively within government institutions,
but is influenced mostly by national culture and civic society.
Habermas, in his 1996 book, Between Facts and Norms: Contributions to a
Discourse Theory of Law and Democracy, argues that the regulatory activities of
governments should influence the will-formation of the public. The traditionally
adversarial relationship between the state and the private sector must be
transformed.
Democratic legitimacy in this alternative approach is created by a strengthened link between
the decisions in the political institutions and the processes of public will-formation as
driven by non-governmental organizations, social movements and other civil society actors
who map, filter, amplify, bundle and transmit private problems, values and needs of the citi-
zens (Habermas, 1996).
National democracy is beneficial in several ways: corporations operate both in

the spheres of their business and the social initiatives they finance, with an enlarged
understanding of their responsibilities to solve political problems along with
state participants. Their growing power is checked through the processes of self-
regulation and new forms of accountability and public exposure. The public
becomes better educated as to what the major issues in governance, economic the-
ory, and social initiatives are, with both voters and other citizens better able to make
decisions and engage in constructive behavior.
3.5 Limitations and Future Research
My proposition for a business civil society is simple enough in theory but substan-
tially more complex and time-consuming in practice. The acceptance of corpora-
tions as full-fledged political participants with implicit rights and responsibilities
may not be a concept easily acknowledged. Many perceptions held by public admin-
istrators, firms, and citizens in Romania must rise from an acceptance of economic
activities imposed on us by global competition to the level of social services we can
reasonably expect from our government while maintaining traditional tax system
structures. I shall conclude by outlining a few theoretical gaps that would benefit by
research in the future.
(a) It is clear that corporations have a social role, but where does this role end?
Do we risk having “lazy government” if business now is involved in solving
societal problems? Without clear limits, corporation’s fundamental role of
References 119
generating a profit may be threatened. Those limits along with the most effective
instruments of business civil society in the Romanian context have yet to be
researched.
(b) I propose the creation and fostering of the business civil society, suggesting that
it will make businesses more profitable in the long-run. However, what is a
reasonable time frame to wait for those profits? Furthermore, what type of cor-
porate social behavior will customers actually reward (education, healthcare,
etc.) with their patronage?
(c) The business civil society may give western multinationals an unfair advantage
over local firms, and may even lead to neocolonialism, therefore it is important
to research further what makes multi-stakeholder initiatives effective. What is
the role of third-party audits, controls, and monitoring? What will be the man-
ner of cooperation between the business civil society and the traditional civil
society that chooses not to engage in political acts?
(d) Given the financial crisis and the loss of confidence in the capitalistic system,
corporate governance is under scrutiny. Adding to this painful debate, the busi-
ness civil society adds the issue of democracy gap and societal accountability:
the interests of shareholders are not always aligned with those of society. There
is a real risk that the business civil society may be transformed by a zealous
politician using a hidden tax placed upon firms. In order for civil society of any
type to be effective, it absolutely must maintain its equidistance and voluntary
nature.
Solutions for societal challenges are not limited to traditional political systems
but require a decentralized process of multi-stakeholders, nonstate participants such
as civil society, NGOs, and corporations. This concept goes beyond the traditional
understanding of CSR and calls upon corporations to assume a political (i.e., social)
as well as an economic role. The timing currently is suitable for a new theory of the
global business firm. Classical capitalism that evolved in a bipolar world and
focused almost exclusively on the interests of shareholders is no longer relevant
because that macro context is no longer in existence. Today’s playing field is radi-
cally different, both in size and velocity, and the future promises to be even more
challenging in this interconnected world. We face global problems that require
global solutions.
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Appendix
Romanian Leadership Barometer 2012: Survey
Q1. Does your company have full Romanian capital?

□ Yes (1)
□ No (2)
Q2. What do you believe will be the main obstacles reducing your efficiency
as a leader in the year 2012? (select the first three obstacles)
□ Organizational culture (internal bureaucracy levels, the quality of interde-
partmental relations) (1)
□ Transparency in internal communication (2)
□ The harsh economic environment (3)
□ Insufficient resources at my disposal (4)
□ Relations with other managers (5)
□ My own abilities (6)
□ The increasing complexity of the business environment (7)
□ The growing volume of knowledge and information I have to acquire in
fields important to the role I play in the company (8)
□ The unpredictability of the legal and political environment (9)
□ Limited trust from investors (10)
□ Others, namely: (11) ____________________
Q3. On which aspects of your job will you most focus in the year 2012?
(the main five aspects)
□ Improving internal processes to rapidly respond to the market’s changes
and complexity (1)
□ Monitoring the Romanian and global legal and political environments (2)
□ Solving current crises (3)

DOI 10.1007/978-3-319-26997-9
128 Appendix
□ Administrative issues and internal rulings (4)

□ Improving decision-making (5)
□ Monitoring global stability and the evolution of the finance and capital
markets (6)
□ Employee-related (workforce-related) issues (7)
□ Innovation (8)
□ Company funding (9)
□ Finding new approaches to deal with clients (10)
□ Drawing investors (11)
□ Increasing the rates of employees’ involvement, motivation, and
satisfaction (12)
□ Social responsibility and the company’s community involvement (CSR) (13)
□ Creating/consolidating organizational culture (14)
□ Adopting drastic changes that would generate improvements (15)
□ Creating an internal environment to facilitate innovation and creativity (16)
□ Keeping the company up-to-date with the latest technological developments (17)
□ Entering strategic partnerships, including with the government (18)
□ Focusing on clients for a better understanding thereof and to better fulfill
their needs (19)
□ Rethinking and adapting the company’s business model to the changes and
the new realities of the global business environment (20)
□ Others, namely: (21) ____________________
Q4. Choose, from the list below, the indicators you will use in the year 2012
to measure your own performance (several answers possible)
□ Improvements brought to company indexes related to my role (profit, sales,
ROI, etc.) (1)
□ Personal contribution to the major projects carried out in the company (2)
□ Company reputation in terms of excellence regarding my role (e.g., the
company is known for excellence in financial management or sales, HR, IT,
etc.) (3)
□ The ability to recruit, retain, and develop talented staff in my department/
my company (4)
□ Personal reputation as an expert in my field, both within my company and
on the market (5)
□ Personal reputation as a leader, both within my company and on the market (6)
□ The company’s ethical stand (e.g., trustworthy organization) (7)
□ Improvements in remuneration and personal benefits (8)
□ Others, namely: (9) ____________________
Q5. According to your opinion, which are the three most important
characteristics a leader needs to have in the new economic reality?
□ Charisma (1)
□ Professional expertise (2)
□ Strategic thinking (3)
Appendix 129
□ Integrity, a good character, good ethics (4)

□ Communication and interpersonal abilities (5)
□ Being an agent of change (6)
□ The ability to motivate and inspire (7)
□ Analytic and problem-solving skills (8)
□ Risk tolerance (9)
□ Creativity (10)
□ Self-development (11)
□ Being result oriented (12)
□ Global thinking (13)
□ Responsibility and accountability (14)
□ Developing organizational culture and internal values (15)
□ Being a visionary—having the capacity to set the company direction and
vision (16)
□ Dedication (17)
□ Strategy design and execution (18)
□ Openness (19)
□ Humility (20)
□ Others, namely: (21) ____________________
Q6. In your relations with the employees, which of the following leadership
and communication styles do you believe will help you the most to reach
your set goals in the year 2012? (only one answer per column)
Leadership style Communication style

Influence and Control and Collaborative Top-down
persuasion (1) command (2) communication (1) communication
Q7. What kind of impact will each of the below global forces/trends have on
your company in the year 2012 (multiple answer)?
Global trend/force
Positive Negative
impact (1) impact (2)
Geopolitical instability (1)
The quick pace of technological innovation (2)
Growth of the social sector (3)
Growth of the global workforce and talent market and the
workforce migration (4)
Individuals’ abilities, knowledge, training, and expertise (5)
Growing restrictions from global regulations on the use of
natural resources and of various raw materials (6)
Rising pressures from consumers regarding companies’
social conduct (7)
Population aging in the developed states (8)
Increasing tax burdens (9)
Market forces (10)
(continued)
130 Appendix
(continued)
Global trend/force
Positive Negative
impact (1) impact (2)
Financial instability and the crises of various currencies (11)
Globalization (12)
(Most often free) availability of knowledge and information (13)
Growth of emerging economies and the emergence of
accessible and attractive markets (14)
Social Media (15)
Others, namely: (16)
Q8. Which are the three main ways you will use to face the increasingly
complex and changing business environment? (multiple answers)
□ Keeping up-to-date with global trends (1)
□ Involving employees on all levels in the processes to obtain creative solu-
tions (2)
□ Rethinking the company’s business model (3)
□ Enhancing the company’s agility by making its internal processes more
flexible (4)
□ Involving clients and keeping them close to the company to better anticipate
their future needs (5)
□ Inspiration and lessons from other industries (6)
□ Others, namely: (7) ____________________
Q9. After this last question please provide certain demographic data.
Please carefully read each statement, then, using the following scale,
decide as to the extent the statement applies to you (one answer per line)
Never (1) (2) (3) (4) Always (5)

1. I encourage my team to get involved in
decision-making and I try to implement
employee ideas and suggestions (1)
2. Nothing is more important to me than
reaching goals and fulfilling tasks (2)
3. I closely monitor project development to
make sure they will be complete in the set
interval (3)
4. I enjoy coaching others when they have to
fulfill new tasks or procedures (4)
5. The more difficult/challenging a goal is,
the more thrilled about it I am (5)
6. I encourage my subordinates to be
creative in their work (6)
7. When I supervise a complex project,
I ensure and I enjoy that each detail be
reported to me (7)
(continued)
Appendix 131
8. It feels natural and easy for me to work on

several projects simultaneously. (8)
9. I enjoy reading articles, books, magazines
on training, leadership, psychology, and
then implement what I have read (9)
10. When I see someone making a mistake, I
will correct them even at the risk of our
relationship getting harmed (10)
11. I manage my time very well (11)
12. I enjoy explaining the details of a complex
project to my employees (12)
13. It comes natural to me to divide big
projects into smaller and more
manageable tasks (13)
14. Nothing is more important to me than
forming
a top team (14)
15. I enjoy analyzing issues (15)
16. I respect the boundaries and limitations
of others (16)
17. Counseling/advising my employees to
help
them improve their performance comes
natural to me (17)
18. I enjoy reading articles, books, magazines
on my field of activity and then put into
practice what I have read (18)
Q10. What is your age category?

□ 18–24 (1)
□ 25–30 (2)
□ 31–35 (3)
□ 36–40 (4)
□ 41–45 (5)
□ 46–50 (6)
□ 51–55 (7)
□ Over 55 (8)
Q11. What is the highest form of education you have completed?

□ High school (1)
□ College (2)
□ Graduate school (3)
Q12. What position do you currently hold? (one answer)

□ Member of the Board of Directors (1)
□ CEO (2)
□ CFO/Controller (3)
132 Appendix
□ CIO (4)
□ Other leadership position (5)
□ SVP/VP/Director (6)
□ Branch manager (7)
□ Department manager (8)
□ Manager (9)
□ Other (please specify): (10) ____________________
Q13. What is your industry/field of activity?

□ Banking & Financial Services (1)
□ Chemicals (2)
□ Construction/Real Estate (3)
□ Food & Beverages/Agriculture (4)
□ Industry/Manufacturing (5)
□ IT (6)
□ Pharmaceuticals/Healthcare (7)
□ Power/Energy/Mining (8)
□ Publishing & Printing (9)
□ R&D/New technology (10)
□ Retail and Wholesale Trade (11)
□ Services (12)
□ Telecom/Media (13)
□ Tourism (14)
□ Transportation (15)
□ Other, please specify: (16) ____________________
Q14. How much experience do you have as a manager/leader?

□ Under 1 year (1)
□ 1–2 years (2)
□ 3–5 years (3)
□ 6–10 years (4)
□ Over 10 years (5)
Q15. I am …
□ Male (1)
□ Female (2)
Q16. What is the level of your company’s income in the last fiscal year?
□ Over 100 Mil. EUR (1)
□ 50–100 Mil. EUR (2)
□ 10–50 Mil. EUR (3)
□ 1–10 Mil. EUR (4)
□ Under 1 Mil. EUR (5)
Appendix 133
Q17. Please indicate which of the following options best describes your
company? (one answer)
□ Private company (1)
□ State-owned/Government-owned company (2)
□ Private Equity Company (3)
□ Stock Exchange-traded Company (4)
Q18. In which county does your company have its headquarters?

134 Appendix
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SPRINGER BRIEFS IN ECONOMICS

More information about this series at http://www.springer.com/series/8876

From Corruption to Modernity

ISSN 2191-5504 ISSN 2191-5512 (electronic)

Library of Congress Control Number: 2015958781

Springer Cham Heidelberg New York Dordrecht London

Printed on acid-free paper

Springer International Publishing AG Switzerland is part of Springer Science+Business Media

Romanian population at large. Public administrators must strike a right balance so

This work utilizes a theoretical approach, by presenting various theories of public

historical perspective. In 2011, along with a group of young researchers at the

Oradea, Romania Sebastian Văduva

1 Corruption, the Unfinished Business of Europeanization

2.5 The Limitations of Current Reform Initiatives .................................. 56

Appendix .......................................................................................................... 127

Further Reading .............................................................................................. 134

Table 1.1 How do you appreciate the level of corruption

© The Author(s) 2016 1

Generally speaking, corruption is caused by the selﬁsh nature of people exhibited

2. Establish, as foreseen, an integrity agency with responsibilities for verifying

1.1 Corruption: Theories and Realities

These principles apply mainly to social institutions; therefore corruption within

Douglas North, the modern father of “institutionalism” broadly deﬁnes institutions

1.1.1 The General Causes and Forms of Corruption

Daniel Treisman in his 2000 article, The causes of corruption: a cross-national

mechanisms without needing to resort to violence (Treisman, 2000). In a democracy,

1.1.2 Cultural Values that Ascertain Corruption

speciﬁc situation. “Particularism is usually described as a mentality prevailing in

In particularistic societies such as Romania, where modernization has never

Europeanization is a speciﬁc modernization process, predicated upon the adop-

1.2 Corruption in Romania: General Concepts and Poignant

Culturally, historically, and geographically, Romania has been an idyllic location

According to Radu Nicolae’s (2010) book, Corruptions and Anticorruption

The current informal environment is a continuation of the communist informal

As the above-mentioned examples seem to indicate, practical Romanian soci-

1.3 Corruption Studies and Surveys in Romania

works’ disappearance. Ironically, most anticorruption strategies coming from the

Table 1.2 Corruption by The level

Table 1.3 The causes of 1–5

citizen’s behavior on a scale of 1 (does not contribute to corruption at all) to 5

In 2012 along with my colleagues from the Grifﬁths School of Management

What do you think will be the main obstacles in 2012?

Fig. 1.1 What do you consider as the major obstacles of 2012

What kind of impact will the following political factors

Global limitations on use of raw

0% 20% 40% 60% 80% 100%

What kind of impact will the following economical aspects

Growth of emerging economies and the

Market's competitive forces 53% 47%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Pozitive impact Negative impact

What kind of impact will the following social factors

Pozitive impact Negative impact

People's abilities, knowledge and expertise 94% 6%

Growth of the social sector 61% 39%

0% 20% 40% 60% 80% 100%

Major Risk-Reduced Opportunity Major Risk-Great Opportunity

regarding the use of