Abstract:
When a reform-minded economist joins Romania's Ministry of Agriculture, she expects to help move her nation toward market-based changes that will increase the production of food by reducing subsidies and tariffs. Instead, General Secretary Cristina Esanu, formerly with the World Bank, quickly confronts a dilemma. The terms of the release of a new round of World Bank assistance to Romania make new aid contingent on Romania's "progress" toward lower tariffs, generally considered to be protecting inefficient producers from outside competition. Esanu quickly learns that powerful political interests make further tariff reductions, in particular, very difficult to achieve. When the World Bank makes clear that it will ask that at least a symbolic five percent tariff reduction be implemented in order for Romania to receive new assistance, Esanu is asked by her superior--the Agriculture Minister--to take on a task about which she is deeply ambivalent: writing a memo to convince the World Bank that tariffs should not be reduced.
Learning Objective:
The case raises questions about how a public official can, and whether she should, compromise principles and pragmatic political considerations.
