Transition, Integration and Convergence - the Case of Romania

Transition, Integration and Convergence - the Case of Romania

A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Iancu, Aurel Working Paper Transition, integration and convergence - The case of Romania - Working Papers, No. 101222 Provided in Cooperation with: “Costin C. Kiriţescu” National Institute for Economic Research (INCE), Romanian Academy, Bucharest Suggested Citation: Iancu, Aurel (2010) : Transition, integration and convergence - The case of Romania -, Working Papers, No. 101222, Romanian Academy, National Institute for Economic Research, Bucharest This Version is available at: http://hdl.handle.net/10419/110436 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu AUREL IANCU TRANSITION, INTEGRATION AND CONVERGENCE - THE CASE OF ROMANIA - ACADEMIA ROMÂNĂ INSTITUTUL NAŢIONAL DE CERCETĂRI ECONOMICE ,,COSTIN C. KIRIŢESCU” FOREWORD This volume comprises several studies and papers published in the last decades. They have been selected and ranged so that to provide a minimum of coherence concerning the phases which Romania has crossed in her way to the advanced socio-economic system of European type: transition to the market economy, accession to the EU, the economic convergence in the three fundamental domains: institutions, real economy, and nominal economy. The readers may find in this volume a description of debates, difficulties and solutions adopted for building-up the market economy by a state being in a profound transformation from weak transition institutions towards hard democratic institutions. Because the transition to the market economy and the association of Romania with the EU and then the integration presenting strategic political decisions, I have included in this work two studies devoted to the political forces – state and political parties – that elaborated and applied these strategic decisions underlining their structure, role and function and their transformation. Integration into the EU of a country like Romania, which emerged from a different system comparing with the West- European one, has proved to be difficult and lasting many years because of the structural transformations. In five chapters I am referring to the essential characteristics of the integration process, such as: market liberalization, competitiveness of the local (national) firms on the national and EU markets, institutional reforms so that the institutions of candidate countries have to become compatible with those of the EU and finally the perspective assessment to find out the real and nominal convergence. 3 Putting into practice the EU competitivity and cohesion principles, Romania has good prospects to close, in a reasonable time, the economic gap and to be admitted into the Euro Zone. Although the real convergence of Romania with the EU requires higher growth rates for the former, a new approach is compulsory to take into consideration the environment quality, the natural resources and the equity between the present and the future generations as natural resource consumers. Just these problems have determined me to include in this volume the last two chapters which, on the one hand, try to prove the necessity of the economy growth harmonization with the environment evolution as well as the saving of the energy resources, and, on the other hand, to point out the main ways to be followed and instruments to be used. 2010 The Author CONTENTS FOREWORD ....................................................................................................... 2 1. TRANSITION AS AN ECONOMIC REFORM AND AN INSTITUTIONAL CHANGE PROCESS ......................................................... 8 1.1. The results of implementing two types of reform................................ 9 1.2. The pace of reform dilemma ............................................................ 12 1.3. Logic of reform policies spread over time ......................................... 15 1.4. The institutional system and its main features ................................. 17 1.5. Internal logic of the socialist institutional system and the consequences of its break-up .......................................................... 20 1.6. The institutional vacuum and discrepancies in institutional transformations ................................................................................ 24 1.6.1. Price liberalization - a necessary but insufficient step for filling the vacuum ................................................................ 25 1.6.2. Decentralization of responsibilities through privatization - key to vacuum elimination .......................... 26 1.6.3. A variant for speeding-up the resolution of property rights ................................................................................... 28 1.6.4. Observance of regulations and the institutional vacuum ...... 31 Bibliography ............................................................................................. 33 2. THE STATE DURING THE TRANSITION PERIOD...................................... 36 2.1. Rational constructivism and reality ................................................... 37 2.2. The need for increased state authority ............................................. 39 2.3. Two models of strong state and their significance ........................... 41 2.4. Competition as basis for liberal democratism in economy and politics .............................................................................................. 44 2.5. Forms of competition and of strategies for authority ........................ 46 2.5.1. Difficulties in bringing about competition .............................. 46 2.5.2. Interest groups-actors of competition ................................... 47 2.5.3. Rojot's competition model .................................................... 48 2.6. Cooperation: necessity, limits and secondary effects ....................... 51 3. POLITICAL PARTIES: NATURE, ROLE, DOCTRINES AND CONSENSUS ............................................................................................... 55 3.1. The parties and the constitutional regime......................................... 55 3.2. Political parties' specific behaviour ................................................... 56 3.3. The need for political parties ............................................................ 57 3.4. Characteristics and requirements ..................................................... 59 5 3.5. Political parties as mediators and guarantors of relations between the elected representatives and the electors..................... 62 3.6. The relationship between the political action of parties in the Euro-Atlantic Space and the economic theories .............................. 64 3.7. Main groups (archetypes) of economic policy doctrines in the Euro-Atlantic Space ......................................................................... 67 3.8. The problem of consensus ............................................................... 81 3.8.1. The area of consensus ......................................................... 82 3.8.2. Theoretical foundation of consensus.................................... 83 3.8.3. The motivation of collective option ....................................... 86 3.8.4. The economic implications of consensus ............................. 86 4. INTEGRATION AS A PROCESS OF REMOVAL OF THE ECONOMIC BARRIERS ................................................................................................... 90 4.1. Introduction ....................................................................................... 90 4.2. Removal of economic barriers – a basic requirement for integration ........................................................................................ 91 4.2.1. Classification of economic barriers....................................... 92 4.2.2. Stages of the European economic integration by the criterion of the capability to remove the barriers hindering market liberalization ............................................ 93 4.3. Romania‟s accession to and integration into the European Union by trade ................................................................................ 100 4.3.1. Removal of customs barriers of the commercial flows between the EU and Romania as a first step towards accession .......................................................................... 101 4.3.2. The common external tariff and the EU bilateral, regional and interregional policy implications .................... 105 4.4.

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