Corruption in Romania

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DEPARTMENT OF BALKAN, SLAVIC AND ORIENTAL STUDIES
MASTER’S DEGREE IN
POLITICS AND ECONOMICS OF CONTEMPORARY EASTERN AND SOUTH
EASTERN EUROPE
Instructor : Harry Papapanagos
Corruption in Romania
Thessaloniki, December 2012
Postgraduate Student: Chatzipoulidis Nikolaos

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CONTENTS
1. Abstract 2
2. Introduction 2
3. Corruption Profile 3
4. Most corrupted pillars (nests of corruption) 4
4.1 Parliament – Legislature 5
4.2 Political Parties 6
4.3 Judiciary 6
4.4 Public Sector 7
4.5 Business Sector 8
5. Conclusions and Policy Recommendations 10

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References 12
1. Abstract
In order to have a better understanding about Romania’s problem with corruption, we
have to illuminate some key factors that are really helpful in the current situation. During
this project, firstly, we will examine Romania’s Corruption profile and the peculiarities of
the Balkan region. Afterwards, we will proceed with sources and causes of corruption
both in the region and in the country. Moreover, we will examine the pillars that are
heavily affected by corruption. The anticorruption strategy, that is proposed in this draft,
has to do with the adoption of specific measures that will hit the root of the problem in
the pillars that corruption nests.
At the end of the essay, conclusions will be extracted and General Policy
recommendations for the deterioration of the phenomenon will be pointed out.
Keywords: Corruption, Romania
2. Introduction
The country located at the intersection of Central and Southeastern Europe bordering on
the Black Sea with 21.4 millions population.
In this essay we will talk about corruption but what is corruption and why corruption is
so important ?. Although there is not a precise definition there is consensus that
corruption refers to acts in which the power of the public office is used for personal gain
in a manner that contravenes the rules of the game (Jain, 2001).

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While in the political sphere corruption undermines democracy, economically it places
Romania at the periphery of global economy and generally affects the business
environment and market economy. Corruption may also result in negative consequences
such as encoring cynicism and reducing interest of political participation people sustain
from politics , political instability , reducing political competition distorting political
development and sustaining political activity based on patronage, clientelism and money.
The corruption can be categorized as grand and petty. The grand corruption enhance or
generates the petty corruption through the “snowball” effect. If the Politicians and the
Highly officials are corrupted if the law is not implemented and the institutions are
undermined sooner or later citizens start to act at the same way and crime becomes
culture .The citizen that lives not only in Romania but general in Balkans at the end can
not conceptualize the term petty corruption because thinks that only corruption that exists
is the grand corruption. When the Balkan citizens acts at a not transparent way the usual
phrase is : That’s what we do in Balkans , or this is the way we do business here
.Furthermore corruption generates poverty, inflation, imbalanced economic development,
weakling work ethics and professionalism, hindrance of the development of fair in
market structures and unhealthy competition there by deterring competition. The anti-
corruption fight is a necessity but fighting against corruption is not an easy task it must
prioritized as a national necessity. In order to have a better understanding we must
examine Romania’s Corruption Profile (Co pănaruș et.al., 2011).
3. Corruption Profile
Αccording to the most recent Survey of Romania, by Global Corruption Barometer,
which is the only worldwide public opinion survey on views and experiences of
corruption, 83 % of people feel their government's efforts to fight corruption are
ineffective. On the other hand 87 % believes that corruption in Romania, the latest years,
increased and only 2% is persuaded for the contrary results.
(Source: http://www.transparency.org/research/gcb)
Table 1.
(Source: http://www.transparency.org/research/gcb)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average
RO 2.8 2.6 2.8 2.9 3.0 3.1 3.7 3.8 3.8 3.7 3.6 3.25

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Bal-
13
3.8 3.6 3.4 3.3 3.4 3.6 3.9 4.0 3.9 3.8 3.7 3.7
Bs-10 3.0 2.8 2.8 3.0 3.0 3.2 3.3 3.3 3.3 3.1 3.1 3.1
EU-
27
6.2 6.6 6.3 6.3 6.4 6.5 6.5 6.5 6.4 6.3 6.3 6.4
Chin
a
3.5 3.5 3.4 3.4 3.2 3.3 3.5 3.6 3.6 3.5 3.6 3.5
U.S.A 7.6 7.7 7.5 7.5 7.6 7.2 7.2 7.3 7.5 7.1 7.1 7.35
According to the table 1 (which was created by CPI data), from 2001 to2011 the
country's score has been raised by 0.8points but still Romania occupies the flattering
place of 25th among 27 EU member states, and as we can see from the table although we
have a significant improvement of level of Corruption in Romania being above the
average of BS-10 and near to china and the last years with Bal-13 too on the other hand
there is a huge distance to be covered between the average of Romania (3.25) and EU-27
not to mention USA. After Romania joined the EU, public commitment of authorities
against corruption affected by the withdrawal of major funding programs and this is the
explanation in order to understand how from (3.1) level of corruption in 2006 reached
(3.7) in 2007 (the year that Romania joined the EU) and why the situation not only from
2007 until 2011 didn’t get better but followed a stabilization and even deterioration orbit
2011( 3.6).The data of 2012 are not comparable due to change to the method that CPI
uses (Cospanaru, 2011a).
First of all the economic crisis that Romania experiences up to point until now raised the
vulnerabilities to corruption. A large budget deficit in 2009 led to Romania borrowing
heavily, eventually becoming the largest debtor to the International Monetary Fund in
2010. Worsening economic condition and Corruption scandals led to popular unrest and
eventually to a political crisis in 2012 (Wikipedia, a).
These problems added with others problems that have causes either on communist
legacy of Romania a cause that cannot be ignored as Romania was one of the most
centralized economies before the dissolution of CCCR and the adaptability in the
transition period that take consider its past would have been a tricky task. The low
degrees of CPI which means high level of corruption in scale (0-10)* can be explained
through the communist legacy as not only Romania but also BS-10 and Bal-13the
majority of them being former communist countries along with communist China have

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significantly higher level of Corruption low CPI average than the Capitalist EU-27 and
USA.(Source: http://www.transparency.org/)
The interim report issued by the European Commission (EC) today under the Co-
operation and Verification Mechanism (CVM) says that anti-corruption bodies set up by
Romanian authorities are starting to improve their track record .The 0,8 change is an
outcome of reforms and the hole anticorruption activity.
4. Most corrupted pillars (nests of corruption)
Now in order to have a better understanding which are the problems, deficiencies and
flaws of the Country regarding to corruption and also to be capable at the end to promote
solutions policy recommendations or even design an anticorruption strategy it is of vital
importance the examination of the most corrupted pillars where the corruption has its
“nests” .In this point it is of great importance to highlight that the examination will focus
not at law and regulations but what really happens in practice.
4.1 Parliament – Legislature
According to a Gallup in January 2008 the Romanian institution with the least credibility
is the Parliament almost 90 % of Romanian citizens have no or very little confidence to
the Parliament. As we sough in the table the Romanian Parliament is with political
Parties the most corrupt institutions evaluated with 4,5 score out 5. The overall pillar
score is 62.5/100. (Source: http://www.transparency.org/ 2011)
First of all in order to have a clear view about the Parliament we must understand how it
functions the central representative authority in Romania. The Parliament of Romania is
made up of two chambers: The Chamber of deputies and The Senate Prior to the
modifications of the Constitution in 2003, the two houses had identical attributes. A text
of a law had to be approved by both houses. If the text differed, a special commission
was formed by deputies and senators, that "negotiated" between the two houses the form
of the future law. In 2009, a referendum was held to consult the population about turning
the parliament into a unicameral body and reducing the number of representatives to 300
from 137 senators and 334 deputies however up until today the necessary constitutional
changes to achieve this have not been put into effect (Wikipedia, b).
Except that there is a total waste on resources as the funds focus in the wrong direction .
The Romanian Parliament is hosted in the Palace of the Parliament. According to
the World records Academy the Palace is the world's largest civilian building, most
expensive administrative building, and heaviest building (Wikipedia, c). Not only that the
low level of recourses are spent without consideration but also there is low level of

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expertise as the political personnel in the parliament is not specialized or trained due to
the fact that the selection is not based on qualifications criteria but on clientelism and
Patronage networks. That has as result the quality of legislative projects to be low.
Another serious case that we must take into account is that the MPs were accused by the
media and by opponent political parties of protecting fellow MPs by not granting
prosecutors permission to arrest an MP , although 13 MPs accused of corruption in a trial
.Trials take many years and in many cases are continuously postponed or rejected. The
corruption were said to be regarded as priority on the Parliaments agenda mostly because
the anticorruption legislative proposals considered to be a part of the EU integration
process. Although the legal framework for transparency laws exists there are many cases
that it is bypassed as more and more emergency ordinances by the government and other
Constitutional procedures that allows the Cabinet to pass bills without debate are adopted
this is an indicative feature that the Legislature independence is limited (Lonean, 2011a).
4.2 Political Parties
Political Parties are among the most corrupt organizations in Romania, receiving a
score of 4.5 out of 5 and a very low Overall Pillar score of 34.03/100. (Source:
http://www.transparency.org/)
Analysts and surveys agree that groups with specific interests (Lobby) and
clientelistic relationships are ruling the political parties moreover local businessmen are
recruiting the candidates of the political parties a phenomenon that enhanced from 2008
and then as the electoral system in Romania changed to a single candidate constituency.
In many post-communist countries, a MP seat receives some degree of immunity from
criminal prosecution, which is highly valued by business people operating in an uncertain
legal environment (Protsyk & Matichescu, 2011).
The new party system based on patronage networks. That’s why corruption is evident
both at local and central level. The term that media since 90s used in order to describe
these local “actors” was “Local Barons” they took advantage of the power entrusted to
local government for the management of public recourses for the common good and use
it(power) in order to benefit specific groups and interests .Furthermore it must be
mentioned that the legal process of establishing a party in Romania is extremely difficult
because the new party must have at least 25.000 members and electoral threshold of
5%of votes the Political system in Romania is designed in order to prevent new parties to
enter the political scene and conserve the existing (political scene).Nevertheless the law
imposes limitations regarding private funding the political parties are under less scrutiny
respect to other institutions. One of the biggest problems regarding this domain has to do
with the transparency and specific the financing of both the activity and also the electoral

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campaigns. One major tend is that the Parties admit that all the funds come from their
member which is legal but the parties are not obliged to reveal the exact number of
member that they have as we can easily understand these member donations are the
laundering of sponsorships. All the problems concerning the Political parties pillar have a
common origin ,there is not an effective anticorruption strategy and also an effective
financial oversight of Political parties and on the other hand the financing mechanisms of
the parties are really sophisticated in order to avoid control. The Romanian Political
system is called as Partycracy the most evident proof for this is the fact that the whole
apparatus of the Executive not only the Cabinet Ministries, is changing when the Cabinet
changes (Lonean, 2011b).
4.3 Judiciary
The Global Corruption Barometer places judiciary as the third most corrupt institutions in
the country with a score 4 out of 5 and Overall pillar score 54.86/100. The judiciary
system of Romania confronts many serious problems first of all the very unstainable
legislative framework leads to contradictory decisions in similar cases another issue is the
very long time that a case lasts before its closed also problems in transparency as the
judiciary independence is debatable political interference and pressure on magistrates is
still present however the legal provisions protecting magistrates are clear. The biggest
obstacle that the judiciary system has to overcome is connected with the Parliaments
common practice to delay the investigation and often denying them the number of final
conviction is very limited at medium level officials and almost none at he higher level the
poor quality of proofs and the lack of performance of the courts are two plausible
explanations. The lack of performance has to do with inefficiencies of (NIM) which is
responsible for the training of magistrates which is either perfect, for example the
selection procedure for continuous training of the magistrates is an untrasparent
procedure also the procedure of practitioners has significant flaws such as the subjects
don’t allow the evaluation of the practical judgment capacity of the future magistrates.
Another structural problem is that although the judges are independent and immovable by
law prosecutors are under the authority of the minister of justice and they have only
decisional independence (Cospanaru, 2011b).
4.4 Public Sector
Although the Public sector comes 5th among the most corrupted Pillars in Romania is
considered as a major problem of the Romanian integrity system with an assessment of
3.8 out of 5 and overall pillar score the significant low 23.61 it is easy to understand that
in this pillar exist considerable deficiencies and problems . Moreover the most recent
GCB research in 2010 shown that 28% of the respondents paid bribe in the last 12
months ( Source: http://www.transparency.org/research/gcb).

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Bribery in Romanian called “spaga” and describes a meaning of corruption that is part of
everyday life. The most visible form of corruption in the is that of abuse of public office
by public officials , allocating public funds in often accompanied by “spaga” which is the
fee that paid for obtaining contracts. Moreover other significant deficiencies are : the
recourses are assessed as insufficient and that means that a priori we have to deal with
abnormal functioning of Public sector institutions. Moreover the lack of independence of
the public sector and the constant political intervention cancels the efforts for a more
transparent Public Sector (Precupetu, 2007)
In these faults must be added the deficiencies that economic crisis and austerity measures
caused such as the reduction of salaries in the public sector from 25% to 50 %, generating
inequality, poverty, lack of professionalism lessening of productivity and weakling work
ethics. Moreover other main problems are the lack of professionalism the inadequate
preparation of civil servants public education is evaluated with 0 the weak interest of civil
servants to respond to citizen demands also the lack of transparency and integrity in
“cleansing” the public sector as an outcome of clientelism has as a result talented people
to not be attracted in order to enter the Public sector. Another problem is that although
from 2004 public servants must not have political affiliation still the political interference
is constant and prefects are changing after the government change this is the “Local
Barons” which had mentioned earlier. Although in Romania the transparency of the
Public sector is ensured by the legal framework there are action that undermine this effort
such as when the Constitutional Court of Romania declared unconstitutional a number of
articles that gave National Integrity Agency (ANI) an administrative jurisdiction. Last but
not least it is of vital importance to point out that Romania is the only country in the
continental law system that have a comprehensive Whistle-blowers Protection act a
system that regulates the protection of persons who provide information both for criminal
acts law violations regarding also corruption we will come up with the Whistle-blowers
system later in the planning of the Anticorruption strategy (Lonean,2011c).
4.5 Business Sector
Diagramm 1.

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Last, but not least, comes the pillar of Business according to the Heritage Foundation
index of Romania in partnership with Wall street Journal Romania ranks 72nd out of 183
economies in Doing Business 2012, reflecting a decrease by 7 points compared to last
year. Romania economic freedom score is 64,4 this score makes its economy to rank in
the 62th place Romania is ranked 28th
out of 43 countries in the Europe region and its
overall score as we see from the diagram 1, below, is higher than the world average.
(Heritage Organization, 2012).
The top 3 obstacles for investments faced by firms and entrepreneurs in Romania as we
can see are Tax Rates, an Inadequately Educated Workforce and Access to Finance. But
what about corruption ? . Corruption continues to undermine the prospects for long-term
economic development.
We already referred to the rule of law problems or its unequal application . The judicial
system suffers from political interference, inefficiency, and excessive workloads and poor
performance due to the non perfect and not adjustable training that the magistrates
receive. Although Romania is a signatory to international conventions concerning
intellectual property rights, but enforcement of legislation protecting patents, trademarks,
and copyrights is very weak. Mistrust of government continues due to widespread public-
sector corruption there is also corruption in Political Parties such as partycracy networks,
the phenomenon of entrepreneurs making arrangements with the “Local Barons” in order
problems to not occur during a business procedure or a business plan. Αll these affect

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business .As we can see, what is depicted on the first graph the graph below compares
Romania to the best and worst countries within the region and the world, around this
aspect of corruption. On the second graph we can see the results of Heritage Foundation
index of Romania in partnership with Wall street Journal Survey regarding the issue of
what percent of the firms is expected to Pay the informal Payment the fee called in
Romanian society as “spaga” to get things done (Heritage Organization, 2012).
Diagramm 2.
Diagramm 3.

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5. Conclusions and Policy Recommendations
Romania although had done steps forward these efforts are not an outcome of a National
Plan and can be characterized as methodic but as an effort of solving problems partially
and not taking under serious consideration the very important issue of corruption . In
order the phenomenon of corruption to deteriorate my personal recommendations are :
the National integrity system of Romania to be enhanced and a an effective
anticorruption strategy to be drawn. This strategy must be designed in a way that not only
fights corruption but the outcomes should be visible in every day life. This effort must be
supported by the citizens of Romania because one of the biggest problems is according
the survey that it was used in order to provide us information about the corruption profile
of the country 83 % of people feel their government's efforts to fight corruption are
ineffective and on the other hand 87 % believes that corruption in Romania the latest
years increased. People had lost their trust and also their hope in the last elections the
abstention rate was 60 % the numbers are indicative of citizens resignation (Source:
http://www.presseurop.eu).
Almost everyone in Romania and a significant percentage of inhabitants in the BS-10
believes that not only nothing is changing towards a positive direction but corruption
every year increases. The first task is to act in a manner that this self-sustaining situation
will be interrupted hope and trust will generated . People must realize that petty
corruption is a corruption form too and start to act in more transparent way people must
stop conceptualize the state , the government or the institutions as an enemy and try to
bypass them stole them or avoid them. It must be constructed a linkage between state –
citizens based on mutual trust. In order all these to be accomplished trust and confidence
must be born. The first measure that must be taken concerns the most corrupted pillar of
all the Parliament. The Romanian Parliament is hosted in the Palace of the Parliament
the world's largest civilian building and most expensive administrative building so the
Parliament must be relocated in a smaller and more efficient place this specific measure
not only will provides a better allocation of funds but will be a symbolic act declaring a
new era of transparency .The story must be widely covered by the media in order this
measure to bring us the expected results which is the enhancement of trust and the
creation of a channel between institutions and the people. This linkage is very important
because as it said before in Public Sector pillar analysis Romania has Whistle-blowers
Protection act a system that protects persons who provide information both for criminal
acts law violations regarding also corruption the goal is the people to became both the
agents and the bearers of transparency.
Furthermore reforming judiciary system and implementing legislative reform is vital for
the upgrade of the low quality of services that courts provide as the magistrates are not

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well trained. Another measure should be the clarification of legislature so phenomena of
contradicting decisions about the same issue to be diminished. The judicial reforms have
to provide protection from political interference and secure the independence of judiciary
authority. The corpus of magistrates will be reorganized as better trained Judges and
prosecutors will enter in its ranks, except that magistrates accused with misconduct and
scandals should be removed from their positions. Legislative norms regarding the matter
of removing of immunity should be introduced and the immunity from MPs should be
removed without the permission of the Parliament.It is also recommended Higher salaries
at (Public sector –Police sector – Judicial sector) our goal is to provide motives and
attract talented people. Now towards a more conventional direction it is proposed the
Implementation of economic reforms and providing sound business environment in order
to attract foreign investment and also impose lower taxation lift barriers and obstacles
.Also it was pointed out the issue of higher administration officials called” Local Barons”
and how they misuse the public administration funds so towards that direction another
specific measure is the introduction of a uniform quality management system in central
and Local government system. Zero tolerance regarding the issue of Corruption at every
domain. A decisive engagement against corruption by the authorities. Companies should
make their anti bribery policies .At last it is proposed a measure under which the parties
in order the electoral procedure to be more transparent not to receive funds for their
electoral campaign in terms of transparency by actor and foundations which have a
“debatable” reputation. In other words not receive funds which are the outcome of illegal
activities or organized crime.
References
Co pănaru, I. , Lonean, I. , Mitică, R., Drăjneanu, Ti-Ro. (2011).ș Νational integrity
system assessment Romania. Transparency International Romania. URL:
http://www.transparency.org.ro
Co pănaru, I. (2011a). Corruption Profile, in: Co pănaru, I. , Lonean, I. , Mitică, R.,ș ș
Drăjneanu, Ti-Ro. Νational integrity system assessment Romania. Transparency
International Romania, pp. 20-22. URL: http://www.transparency.org.ro
Co pănaru, I. (2011b). Judiciary, in: Co pănaru, I. , Lonean, I. , Mitică, R., Drăjneanu,ș ș
Ti-Ro. Νational integrity system assessment Romania. Transparency International
Romania, pp. 46-59. URL: http://www.transparency.org.ro
Heritage Organization. Romania: 2012 Index of Economic Freedom . URL:
http://www.heritage.org/index/country/romania)

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Jain A. (2001). Corruption: A review. Journal of Economic Surveys Vol. 15, No. 1,
Blackwell Publishers , URL: http://darp.lse.ac.uk/PapersDB/Jain_(JES01).pdf
Lonean, I. (2011a). Legislature , in: Co pănaru, I. , Lonean, I. , Mitică, R., Drăjneanu,ș
Lonean, I. (2011b). Political parties, in: Co pănaru, I. , Lonean, I. , Mitică, R.,ș
Drăjneanu, Ti-Ro. Νational integrity system assessment Romania. Transparency
International Romania, pp. 122-133. URL: http://www.transparency.org.ro
Lonean, I. (2011c). Public Sector, in: Co pănaru, I. , Lonean, I. , Mitică, R., Drăjneanu,ș
Precupetu I. (2007). On the nature and Causes of Corruption in Romania – Evidence
from a grounded Theory Approach. Crime and Culture, Discussion paper Series No 13.
URL: http://kops.ub.uni-konstanz.de/bitstream/handle/urn:nbn:de:bsz:352-opus-
116443/On%20the%20nature_Precupetu.pdf?sequence=1
Protsyk, Ol. and Matichescu, M.L. (2011). Clientelism and Political Recruitment in
Democratic Transition Evidence from Romania. City University of New York,
Comparative Politics, Volume 43, Number 2, January 2011 , pp. 207-224(18). URL:
http://www.policy.hu/protsyk/Publications/Articles/CPRomClient11.pdf
Wikipedia a: Romania. (cited 12 December 2012) URL:
http://en.wikipedia.org/wiki/Romania
Wikipedia b: Senate (Romania). (cited 12 December 2012) URL:
http://en.wikipedia.org/wiki/Senate_of_Romania
Wikipedia c: Palace of the Parliament. (cited 12 December 2012) URL:
http://en.wikipedia.org/wiki/Palace_of_the_Parliament

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