The Analysis of the Relationship between the Level of the Public Expenditure for Investments and de Degree of Development of the Society in Romania

Abstract

Public expenditure for development have a decisive role in Romania in the economic recovery of the country, in a first step, but at the same time taking into account the EU's objectives. Romania during 2000-2010 had the largest public investment expenditures across European countries as a share of GDP, and in 2011 was ranked second after Poland. But while the share of GDP allocated to public investment in Romania is above the average of EU countries, in the economy these expenditures have been seen too little. Looking at Lisbon Index score, which tracks the performance of member countries to achieve the objectives of the current Lisbon strategy, one can notice that Romania is on the penultimate position, being preceded only by Bulgaria. The explanation for this poor performance in achieving the objectives of development comes from the lack of efficiency with which public money was used in financing investment projects and the low absorption rate of EU funds; Romania records in 2013 a rate of absorption of structural and cohesion funds of only 13.05%, the lowest among CEE countries.