Romania

Despite a vigorous recovery from the pandemic, Romania falls into the bottom ranks internationally (rank 39) in the area of economic policies. Its score on this measure has improved by 0.4 points relative to 2014.

Romania’s economy contracted by 3.9% in 2020. However, its recovery from the effects of the pandemic was strong, with GDP growing by 6.5% in the first half of 2021. Business and consumer sentiment remained strong, and 2021 saw robust growth in wages along with an uptick in public and private investment.

The unemployment rate rose from 3.9% in early 2020 to a peak of near 6.5% late that year, falling back to around 5.5% through 2021. Youth unemployment rates remain considerably higher. However, labor and skills shortages persist, driven by low labor-force participation rates and emigration.

The country has relatively low, flat personal-income and corporate tax rates. The government deficit increased to 9.4% of GDP in 2020 before falling somewhat. The debt-to-GDP ratio reached 50%. Research and innovation systems are fragmented due to insufficient budgets and a brain drain of tech workers.

With a number of problematic areas, Romania falls into the bottom ranks internationally (rank 39) with respect to social policies. Its score on this measure is unchanged relative to its 2014 level.

The underfinanced healthcare system was badly stressed by COVID-19. ICU beds were filled, and patients had to be sent to nearby countries. Vaccination rates are very low. An ongoing exodus of medical personnel has exacerbated difficulties. Inequality levels are very high. During the pandemic, more than one-third of children were at risk of social exclusion or poverty.

The education system remains of poor quality overall, with serious structural problems. Performance and attainment indicators are low, and access is unequal, with low-income, Roma and rural children facing particular challenges. Dropout rates are very high especially in rural areas.

Parental-leave benefits are generous, but a shortage of affordable childcare cuts seriously into women’s labor-market participation rates. Plans to boost pensions substantially were dropped following international criticism, but a smaller increase was implemented. Domestic violence and human trafficking are ongoing problems. Integration programs focus on refugees.

Suffering from ongoing difficulties with pollution and waste, Romania falls into the lower-middle ranks internationally (rank 25) with regard to its environmental policies. Its score on this measure is unchanged relative to its 2014 level.

The country has set a goal of cutting emissions by 40% by 2030. It has a relatively good record on greenhouse-gas emissions, but has not adopted a national air pollution control program. Observers say the country’s environmental authorities have not collected accurate data, undermining emissions reductions efforts.

The energy market has too many electricity producers, most of which are state companies. A national strategy is needed in the areas of the circular economy and building practices.

At the Glasgow COP26 meeting, the country agreed to accelerate its phase-out of coal power and reduce fossil fuel subsidies. It is part of a regional group aimed at coordinating action and protecting water resources in the Danube River basin.

With a number of evident weaknesses, Romania falls into the bottom ranks internationally (rank 38) with regard to democracy quality. Its score on this measure has declined by 0.3 points since 2014.

Political parties routinely circumvent campaign financing laws. Key media outlets are owned by businesspeople with political interests. A pandemic-era decree allows authorities to block access to websites disseminating false COVID-19 information. Defamation lawsuits are increasingly being used to silence investigative journalism.

Civil rights are generally respected. Protests continued during the pandemic, often against lockdown rules. Roma and LGBTQ+ people face considerable discrimination. A controversial recent law bans schools from discussing conceptual differences between gender and biological sex.

A prosecutorial body ostensibly focused on judicial corruption has drawn considerable international criticism for interfering with judicial independence. Corruption is still widespread. The main anticorruption institution is underfunded. A number of high-profile political figures have been prosecuted for corruption offenses.

With a substantial array of shortcomings, Romania shares the SGI 2022’s lowest rank (rank 40) with regard to executive capacity. Its score on this measure has declined by 0.4 points relative to 2014.

Policymaking has suffered from a lack of strategic planning. Repeated reorganization of the government office has undermined its policy evaluation capacity. Informal coordination often takes the form of power struggles within parties, increasing government fragility. Coordination on policy development is led by the line ministry initiating the proposal.

RIAs are theoretically required, though quality and actual use are highly uneven. Ex post evaluations have remained the exception rather than the rule. The quality of public consultation has declined in recent years. Communication is often fragmented, undermining public trust. During the pandemic, this facilitated misinformation, leading to increased infection and death rates and slow vaccine uptake.

Recent years have featured a revolving door of failed coalitions, reducing the government’s ability to advance meaningful programs. Funding for local governments has been biased toward those controlled by the party in power at the national level. Regulations are mostly enforced to the extent that they benefit powerful lobbies and politicians’ clients.

With only a few bright spots in this area, Romania falls into the bottom ranks internationally (rank 38) with regard to executive accountability. Its score on this measure is unchanged relative to its 2014 level.

Individual parliamentarians have minimal resources, but fairly broad formal oversight powers. The current audit-court president is close to the head of a major political party, and parliament has proposed diminishing the body’s independence further. The ombudsperson was removed from office by parliament after accusations of a conflict of interest, but restored by the courts.

The general level of policy knowledge remains low. Media coverage is highly partisan, with key outlets controlled by wealthy individuals with political interests. Disinformation was a hugely damaging factor in the anti-COVID-19 campaign, hindering vaccine uptake.

The major Romanian parties remain controlled by leaders that are isolated from the party membership. Business associations and unions play only a minor role in proposing concrete policy measures. Despite a dependence on international financing, a number of NGOs have significant analytical capacities.