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262 Trandafir, A.; Brezeanu, P.; Stanciu A.P. In addition, tax competition may affect the composition (structure) of public goods provided. However, the issue of public expenditure structure was initially neglected. Keen and Marchand (Keen & Marchand, 1997, pp.33-53) addressed this issue and showed that, in the presence of mobile capital, tax competition tends to lead to an over-supply of resources and infrastructure to subfurnizare resources in those areas that directly affect consumer welfare such as social services. The classic work on fiscal federalism, it is certainly a loss of wealth resulting from tax competition. Therefore, coordination both in terms of tax rates and in terms of public expenditure is a strong argument in the presence of competition for mobile factors. However, decentralization, especially in the first half of the '90s, was actively promoted as a necessary policy choice for many transition economies in Central and Eastern Europe and characterized as a means of getting rid of excessive centralization and politicization of economic life. While international political debate turned to the institutional requirements for successful decentralization, the debate on the potential benefits of decentralization is far from complete. Romania is one of those countries to promote decentralization to depoliticize economic life in its transition to a market economy. This article analyzes the structure of public services provided in Romania under the impact of tax competition, the race to the bottom affecting all economies under globalization impact. Model analysis is based on the Keen-Marchand model, providing different public services in the presence of tax competition and uses empirical data from the consolidated budget of Romania during 1995-2010. 2. PROVIDING PUBLIC SERVICES IN ROMANIA AMID TAX COMPETITION Starting from the idea of Keen-Marchand (Keen & Marchand, 1997, pp.33-53) by providing different public services in the presence of tax competition, we further examined this issue for Romania during 1995-2010, showing the impact of such competition on our country. In the analysis we used the following variables: - Realized tax revenues (their share in GDP), as an independent variable. By this we caught the effect of tax rate reduction (the so-called "race-to-the-bottom", in which Romania joined in the current tax competition and globalization); - Different categories of expenditure incurred (share in GDP), as dependent variables. By that, we surprised the public services provided and their structure in the presence of the race to the bottom in conditions of globalization. In the analysis we used a linear regression model, as follows: where: ( x) y = f (1) ( x) α + βx f = (2) where: y - dependent variable, represented in this case, the share of public expenditure in GDP has made various, such as: general public services (denoted GSP), defence and national security policy (noted AOSN), education (denoted INV), health (denoted Ch_S),
The Race to the Bottom and Its Impact on the Provision of Public … 263 culture (denoted Ch_C) Insurance (denoted Ch_Asig), public services and development (marked DP) and economic actions (denoted AEC); x - the dependent variable, represented by the share of tax revenues achieved in GDP (denoted AC); α, β - parameters of the regression equation. For estimation we used the method of least squares, which requires the election of c1 and c2 as estimators of α and β's such that: to be minimal. ( c c ) = ( y − c − c x ) ∑ W (3) 1, 2 i 1 2 i Statistical description of the variables analyzed for the period 1995-2010 is shown below: Table 1. Statistical description of variables Sample: 1995 2010 VF SPG AOSN INV Ch_S Ch_C Ch_Asig DP AEC Mean 9.33324 1.564 2.5007 1.12 0.4433 0.274 2.007 0.3276 2.425 Median 10.8643 0.947 2.9998 0.97 0.4745 0.3002 1.593 0.3644 2.677 Maximum 15.8748 6.532 3.8867 2.8 0.5854 0.471 4.276 0.7852 4.328 Minimum 1.61662 0 0.3219 0.27 0.1714 0.02 0.113 0.0244 0.446 Std. Dev. 3.81216 1.803 1.1402 0.65 0.1058 0.1347 1.384 0.2008 1.286 Skewness -0.65274 1.638 -0.719 1.01 -1.382 -0.4525 0.327 0.3189 -0.21 Kurtosis 2.88115 4.8 2.2786 3.77 4.2341 2.1438 1.817 2.9452 1.596 Jarque- 1.14561 9.317 1.7261 3.09 6.1122 1.0348 1.218 0.2731 1.432 Bera Robability 0.56394 0.009 0.4219 0.21 0.0471 0.5961 0.544 0.8723 0.489 Sum 149.332 25.03 40.011 18 7.0927 4.3839 32.11 5.2424 38.79 Sum Sq. 217.988 48.77 19.501 6.38 0.1679 0.2721 28.72 0.605 24.82 Dev. Source: Own calculations using Eviews program and empirical data Statistical Yearbook of Romania (www.insse.ro) Estimating parameters by the method mentioned above were obtained the following regression functions between the variables analyzed: 1. Tax revenues and expenditures for general public services GSP = 0.051 + 0.162 * VF This result shows that the change to a percentage of revenues in GDP, expenditure on general public services will change in the same direction as 0.162%. 2. Tax revenues and expenditures for defense and national security policy AOSN = -0.032 + 0.271 * VF 2
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Annals of the University of Petroş
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Concerns on Labour Power Selection
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Regional Development - Past, Presen
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Mitigation of the Crisis Effects in
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Guiding Marks Regarding the Reasoni
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Integration process in management s
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Promotion of Employment among Youth
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Human Capital and Higher Education
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