Regional Divergence in Romania Based on a New Index of Economic and Social Development

Assessment of the magnitude and trends in territorial inequalities could (and should) be a useful tool for designing adequate regional development strategies aiming to reduce economic and social disparities. In this context, our paper is exploring the issue of territorial convergence in Romania by combining economic and social perspectives based on a new synthetic index of development at county level. The index captures various economic and social aspects (GDP/capita, labour productivity and life expectancy), offering a synthetic measure of development which is further used for assessing the degree of convergence among Romanian counties over 1995-2012. We computed the annual coefficients of variation among counties and tested for sigma convergence using standard statistical methods such as Augmented Dickey-Fuller and Phillips-Perron tests. The results indicate a significant sigma divergence trend on the long run, despite temporary decrease in inequalities associated with strong economic growth. It seems that territorial development in Romania was persistently unbalanced and the disparities have had a tendency to widen in time.