Page 251 - Proceeding 2015

ANDRONICEANU Armenia and OHANYAN Gurgen FAMP
IMF POLICIES AND THEIR EFFECTS ON EDUCATION IN ROMANIA CCASP

Especially, on expenditure side IMF measures caused shrinkage in public employment by over 100,000
persons, public wages are cut by 25 percent, the 13th salary was eliminated and inefficient social benefits
were cut by 15 percent. Meanwhile, the majority of public employees are in education and in health sector,
PROCEEDINGS OF THE 11 TH ADMINISTRATION AND PUBLIC MANAGEMENT INTERNATIONAL CONFERENCE
hence those sectors are more affected of the aforementioned measures. Moreover, on the revenue side
3 percentage point rise in social contribution, as well may have adverse effects on employment in private

sector and private schools. Furthermore, Romanian authorities made reforms of wages and social
contribution by reducing the role of bonuses and compensations.

Review of SBA initiated in 2011 shows that Romanian government continued streamlining of public

employment, eliminations of arrears and improved targeting of social assistance on the expenditure side.
Yet, on the revenue side IMF officials highlight that integration of tax and social contribution collection
took place. Amongst the structural reforms we have extracted Passage of New Labor Code and Social

Assistance Law, which could affect the education sector.

In this end, we further analyze main education indicators of Romania and Bulgaria to unveil the effects of
30 th – 31 st October 2015 ”Strategic Management for Local Communities” Bucharest aforementioned measures on education. Thus, the data are split into two categories based on their nature.

Particularly, data represented in the first part include those indicators that directly may be affected by local
fiscal policies and are entitled as input variables.

As was mentioned above the data are extracted from the one source, in order to overcome some minor

differences in statistics. In our case all data are captured from Eurostat database, which let us analyze
the desired data from 2008 until 2012 with some exceptions. We include 2008 as a non-crisis year to
draw on some conclusions (See Table 4 and Table 5).

First of all, the attention is directed to the education expenditures to explore its development since crisis
penetration. This indicator is calculated as percentage of GDP and illustrates that Bulgaria has notable
comparative advantage on Romania. Especially, Bulgarian authorities managed to preserve

approximately the pre-crisis year level of education expenditures comprising 3.8 percent in 2013.

At the same time, Romanian authorities, perhaps due to IMF imposed measures to cut budget deficit,
notably reduced expenditures on education pinning it on 2.8 percent in 2013, which is less than pre-crisis

year by 37.7 percentage points.

Detailed breakdown of public expenditures on all levels of education, i.e. pre-primary, primary, secondary
and tertiary, unveils that all four educational levels have been affected by budget shrinkages (see Table

4).

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