Implications of Financial Decentralization on the Local Budgets Balancing Policy

Abstract

Decentralization is a mechanism by means of which the local administration authorities receive the authority and the resources allowing them to make decisions concerning the provision of public services. The balancing of the local budgets in Romania is the consequence of the financial decentralization, according to which the local communities were entrusted with/allotted their responsibilities and then they were entrusted with/allotted their resources as well. The separation of the attributions of the central and of the local administration conditions the way the revenues and the expenses were distributed between the two levels. This process depends on the degree of regional development, on the concentration of the population on its welfare degree, on the tasks each community has to face, on the possibility of financing the foreseen expenses from local resources.