Post EU Accession: the End of Public Administration Reform in Baltics?

1. Post EU Accession:the End of Public Administration Reform in Baltics? ugis.sics@cpm.lv

2. Main questions • Three Baltic States have been praised for their economic performance and public administration reforms (strategic management in Lithuania and Latvia, and E-Government in Estonia) • But what are the achievements? And what are the failures? • What explains them apart from size of the countries? Can achievements be replicated elsewhere? • What challenges ahead? Is administrative capacity of the Baltic States sufficient for effective functioning within the EU including management of the EU funds?

3. What achievements? • Re-establishment of the state (often under estimated factor in explaining reforms) • EU and NATO Membership (in many aspects drivers of the reforms so far) • Fast economic growth (on average around 10% per annum) • High degree of openness and participation • Privatization completed • Clear organization of public administration, well structured roles and responsibilities • Increasing focus on performance (in terms of policy planning, programming and organizational accountability) • Internal coordination system with some positive impacts and significant potential • Now – new system of HRM and pay

4. Successful reform initiatives • Legal and institutional reform • New administrative process and courts • Strong centre of Government (State Chancellery) • New policy planning and coordination system • Open decision making process enhanced by various e-tools • Programme budget with increasing emphasis on non-financial performance information • Strategic planning initiative integrating policy, budget and operational planning • MTEF (1+3 including financial and non-financial information at the programme level)

5. Illustration of improved policy coordination 2001/2005

6. Where we have failed? • Trust in Government, politicians and the Civil Service • “Unequal” distribution of benefits of the reform • High level corruption (state capture) • People vote not only in elections but also through exit (50 – 100 000 of workforce left during recent years) • The Civil Service that hardly copes with attracting, maintaining and developing talent • Return of politization

7. Can our successes replicated? • At technical level all these reforms can be copied • Comprehensive PAR programmes modelled according to “best practice” examples are easy to propose and “write” • The question, however, is: • Will they work in a particular context? • Does it address the real needs of the place? • Has this “best practice” been really understood? • The real question is – can reform be given sufficient space, time and incentives to be successful? And is there a self motivating and driving initiative for reform?

8. What explains success?1 • EU accession as one of the key external drivers, i.e. Latvia needed to catch-up with the first group of EU accession countries; • Previous reform initiatives have failed thus creating a platform for EU to talk about PAR: • Civil Service Law • Semi-commercial public enterprises • Anti-corruption • Significant role played by the World Bank (within the framework of SAL)

9. What explains success?2 • The Latvian model has been driven by Civil Servants, not so much politicians • However, politicians provided space for that • So one can talk about the combination of: • External pressures causing • Internal political pressures • Thus giving to the reform minded officials some freedom to experiment • A small group of senior and middle level officials who had interest and passion in the reform (with their own motivations) • Quite receptive, flexible (and young) administration • High quality external assistance • The process was inclusive – where it was not – reforms failed or failed partially

10. Where are the blockages? • There is a need for political support for reforms. When politicians lack incentives, reforms will most likely fail • There can be some serious counter incentives: • Reforms requiring resources (pay reform) – always unpopular; • Merge of politics and business (state capture); • Lack of critical mass of people open to reform, “old cadre” dominate; • Lack of international language proficiency in the Civil Service; • Insufficient technical competence and leadership (in Baltics it has been limited to dozen of people in the Government’s centre) AND WILLINGNESS TO LEARN AND INNOVATE, NOT REPLICATE • Lack of political stability, i.e. continuity (most reforms require several years before bearing fruit) • Thinking that reforms can be done in the old command and control style

11. What challenges ahead? 1 • Reversing politization process within the Civil Service and returning to competency and merit based appointments. There is a need for the role of the civil service • Re-thinking the Civil Service concept – the old structure is dead but its ethics relevant more than ever; the new concept is just emerging • HRM – dealing with increasing competition in the labour market • Possibly recruiting internationally • Stabilizing Civil Service • The old reformers get tired – need to find new ones

12. What challenges ahead? 2 • Continuing to focus on programme management improvement (deign, implementation, monitoring, accountability, evaluation) • Linking individual and organizational performance • Addressing trust issues: • More equal distribution of benefits of growth • Continuing with strong anti corruption policies

13. Conclusions Future • EMBEDING THE SUCCESS STORIES • FOCUSING ON RE-BUILDING TRUST • CAPACITY AND INDEPENDENCE OF CIVIL SERVICE • INNOVATION AND OPENESS TO NEW WAYS OF WORKING • LEADERSHIP Past • ISOLATED INNOVATIONS • WEAKENING COORDINATION • INCNTIVE PROBLEMS • RETURN OF POLITIZATION