Application Prospects Of The Paretto Model In The Execution Of The Local Budgets And The Correlation With The Regional Gdp

Regional economic development records are not the same in the geographic regions of Romania, the issue representing a cause for discrepancies in living standards, quality of life, on one hand, and propensity for the economic sector, on the other hand. Without a proper involvement of the state (involving targeted support measures), this phenomenon could generate extremely large gaps between various geographical areas. The regional economic development is reflected - directly or indirectly - in the size of the local budget because of the algorithm for generating revenues, which is supposed to take-up a share of the profit and income taxes, as well as other sources, and - of course - the central budget allocations. Only local revenues will be considered because expenses are mostly correlated with these ones. The surplus or the deficit situations range in a margin between 3-5%, totaly irrelevant for a comparative analysis. Dangerous gaps can be reflected, in our opinion, due to the scrutiny of the Paretto model 20-80, on the basis of the fact that almost 80% of world’s wealth is owned by 20% of the population, while 80% of the value-added is generated by 20% of the economic agents etc. Testing Paretto model for local budget execution and finding correlation with GDP.This paper aims at testing if - at the levels of macro-regions, regions and counties - such a proportion can be discovered. Romania's territorial breakdown includes four macro-regions, 8 regions for development and 42 counties. The assumption is that such ratio might occur at the level of a county, but it will lose consistency at the levels of regions and macro-regions. At the same time, a link between the regional GDP and the size of the local budget revenues will be considered in order to highlight the elasticity indicators. The intensity of this link could then be determined with the help of correlation indicators. Structural analyses of the kind will allow the Government to design measures for stimulating the growth in less developed areas and/or to support measures aiming at closing the gaps. Map of local distribution of GDP and local budget and information about the link between. Expected strong link.