Over the course of the last week, Romania's new prime minister, Sorin Grindeanu, has faced massive protests with crowds ranging in the hundreds of thousands. This is due to the controversial order concerning corruption that the 3-week old prime minister aims to implement. This emergency decree would effectively legalize corruption by decriminalizing "financial misconduct" that would result in a loss of the equivalent of $47,600 or less by government officials. This order comes after the country has been trying earnestly to combat the corruption scandals that have plagued the country.
In November 2015 following the deaths of 64 people in a Bucharest nightclub, protesters took to the streets in opposition to the corruption that ran rampant in the government. The protesters managed to take down the previously elected government. However, after what seemed like such great progress, Romanians see themselves still attempting to remedy the same problem that took so many lives in 2015.
The party that aims to implement the decree is the Social Democrat Party (PSD). The party's leader, Liviu Dragnea, has been charged with abuse of power after it was discovered that he offered $26,000 in contracts to associates that allegedly did no work. With the continuation of this corruption, it has been speculated that the prime minister will resign soon. What might be the long term results of rampant corruption in the government and the continual transitioning of governments due to protest rather than elected governments that finish their respective terms?
Considering that corruption is a public failure, we are led to think that state-run contracting could be reduced so that private businesses can run the market more efficiently. Do you agree?
1 comment:
Government intervention in free markets is usually necessary when the market fails to provide a certain good that the government deems necessary. Though it is not clear what contracts were being given out (and not being executed properly) in this particular case, but I have seen numerous similar cases in my country when it comes to public infrastructure building. Corruption is rampant and roads/bridges/railways don't get built for years despite receiving government funding.
If government intervention leads to less efficient market outcomes than a market left alone then it really does beg to be asked whether the government needs to be involved at all.
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