Financial, Public and Regional Economics

Abstract

The process of local public spending optimization is extensively studied by those who have
the power of decision towards saving. Even if the goal is to adjust the imbalance revenues/expenditures,
the trend to spend more than accumulated is still a matter of concern. Our objective is that of analyzing
the local governments’ functional expenditures by measuring the degree of decentralization/autonomy.
The value of the paper is given by the model we applied for Romania which is based on spending
management. By analyzing different types of expenses, we have highlighted that local expenditures
represent instruments of strengthening or weakening local autonomy. The indicators measure the
effectiveness of local expenditures by using the model published by The World Bank in 2006. We
gathered information through interviewing different Town-Hall representatives from Brasov County
and then we gave scores and established ranks. As the degree of autonomy reached a score of about 3
on a scale of 1-4, we identified that the class in which Romania is placed (B) is mostly defined in terms
of delegated powers and not decentralized competences. The study is significant for politicians, for
those responsible for implementing decentralization, but also for the taxpayers who deserve the best
public services.