Market economy and economic reform in Romania: Macroeconomic and microeconomic perspectives

Abstract

ALTHOUGH ROMANIA ABANDONED THE PLANNED ECONOMY MODEL IN 1989, the country and its government continue nevertheless to suffer criticism and bad press reports, mainly for an alleged lack of progress in democratic reform and the slow pace of transition towards a market economy. This article elaborates on economic reform, summarising strong and weak points, achievements and areas of continued concern, looking at both the macroeconomic and microeconomic perspectives, and illustrating how the quality of management is what ultimately determines the progress of reform and restructuring. The first part of the article takes the macroeconomic perspective, summarising recent economic trends and the strengths and weaknesses of the Reform Programme; the second part takes the microeconomic perspective, summarising enterprise performance, diagnosing corporate management style, showing how shortcomings on the macro level are reinforcing the shortcomings on the enterprise level, and how enterprises choose the major break-out routes. The microeconomic perspective, far from complete, is developed from an enterprise survey and experience gained in the field.