Efficiency and Sustainability of Local Public Budgets in Romanian Urban Areas—A Statistical–Territorial Approach

Against the backdrop of self-financing difficulties, an effect of the transition from a centralized to a market economy, Romanian cities are marked by significant differences in the way local public finances are used. The difficulties generated by insufficient income, complemented by subsidies from the centralized budget, create strong disparities that manifest themselves both vertically within the urban hierarchy (small towns are the most affected) and spatially along development axes. The influence of social, economic, and cultural factors can explain these cleavages, but also expresses the excessive centralization of governance in Romania. The statistical processing of information on budget execution for the years 2019–2023, at the level of the 319 official urban centers in Romania, provides an image of the structure of local budgets through the prism of their self-financing capacity and their supplementation with community funds or government subsidies. The descriptive analysis, which highlights specific structural patterns, is complemented by a multivariate analysis aimed at examining the relationships between self-financing capacity and a set of explanatory variables. The study’s results demonstrate the need to implement programs to reduce urban administrative units’ dependence on the centralized budget and to streamline their own revenue collection.