B y Estonian Centre of Eastern Partnership

EUROPEAN PRINCIPLES OF PUBLIC ADMINISTRATION IN EU EASTERN PARNTER COUNTRIES:4th Comparative Report, 2014 By Estonian Centre of Eastern Partnership Presented to the 7th Public Administration Reform Panel Tbilisi, 16 October 2014

Public administration reform in EU context • No acquis to guide the process, countries are free to design their governance systems • Madrid criterion for acceding countries: public administrations need to (a) prepare for membership and (b) be able to implements the acquis • EaP: “Rule of law, good governance, the fight against corruption … are central to enhancing the relationship between the Parties” (EU-Ukraine Association Agreement) • All in all, public administrations of Eastern Partners are expected to align with European standards and principles

The European Principles (OECD) • Reliability and predictability (legal certainty): public administration discharges its responsibilities in accordance with the law. General rules laid down in the law and interpretative criteria produced by courts are applied impartially and in non-discriminatory manner. Legal certainty attempts to eradicate arbitrariness in conduct of public affairs • Openness and transparency: the conduct of public administration is expected to allow for outside scrutiny and inquiries about the decisions by the affected legal and natural persons. It thus underpins the rule of law and make public authorities accountable for their actions • Accountability: a public administration body is answerable for its actions. No authority should be exempt from scrutiny or review by the others • Efficiency (appropriate ratio between recourses allocated and results attained) and effectiveness(administrative bodies perform successfully in achieving goals set for them). Both acquire specific importance with regard to production and delivery of public services in an environment of fiscal constraints

Observed economies: stages of developmentSource: World Economic Forum Global Competitiveness Reports, respective years

Novelties in the methodology 2014 • Rationale: • To reflect countries’ progress toward more competitiveness • To achieve more meaningful results • What is new: • On reliability and accountability, new indicator is introduced to measure the rule of law: Constraints to government powers originating from legislature, judiciary, external audit, public checks (Component of the RoL Index by the World Justice Project) • One more step to to take the rising competitiveness into account: Training of personnel (in testing modus so far) – complementing the extent of market dominanceas one other efficiency enhancer, key for efficiency-driven economies: companies invest more in staff development in a conducive business environment, which in turn is a result of an efficient public administration • Changing for bi-annual schedule – even years from 2014 onwards

How we measure progress

A3. Irregular payments and bribesIrregular payments are: 1 – very common … 7 – never occur

Reliability and predictability • Overall trend: • Both positive and negative developments in EaP region year on year and since 2010 • Broadly, South Caucasus countries have been performing better than BY, MD, UA • Country by country highlights (selected): • Georgia is the clear regional leader on all 3 indicators, but esp. on combatting irregular payments, where the country outscores Estonia and Germany; positive trends are supported by the evidence from the economy • On a negative side, Moldova continued moving to more favouritism and, more generally, to less reliable public governance • Ukraine has shown mixed trends, e.g. improved on external constraints to government powers and combatting bribes, but remained the least advanced on the latter

B1. Transparency of policy makingGetting information on government decisions is: 1 – impossible … 7 – extremely easy

B3. E-governmentAvailability of e-services, e-readiness (website assessment), human resource endowment, indexes of telecommunication & e-participation

Openness and transparency • Overall trends: • The trend of businesses experiencing more difficulty in getting information on government decisions persists for the 2nd consecutive year (worldwide incl. EU) • The same trendprevailed in EaP countries as well • Improvements in e-governance, quite pronounced 2 years ago, seem to have subdued in 2012-14 • Country by country: • Georgia leads on corruption perception, on other indicators all EaP countries are broadly at the same level • Comparison with the EU: • The gap vis-à-vis the EU is less pronounced than on reliability and predictability – except on corruption perception

C1. CSO sustainabilityCSO sustainability is: 7…5 – impeded; 5…3– evolving; 3…1 - enhanced

Accountability • Overall trends: • A new and positive trend has been a stronger civil society in almost all EaP countries – notably on advocacy, financial viability, public image and relations with governments • No serious slippages across the region • Country by country: • Georgia leads on eradicating corruptive practices at public finance and streamlining judicial independence; Ukraine – regarding stronger positioning of the civil society • Moldova has managed to stop the trend to a less accountable public administration, remains nevertheless at rear in he whole region • Comparison with the EU: • Georgia has maintained comparable level with Estonia on diversion of public funds, Ukraine’ civil society moves toward an enhanced sustainability • In general, however, the region lags behind the European standard of an accountable public administration

D2. The extent of market dominanceThe corporate activity is: 1 – dominated by a few business groups … 7 – spread among many firms

Efficiency and effectiveness • Trends in the region and country by country: • Competition protection has shown results in Moldova and Georgia, whilst Armenia lost accomplishments of the previous years • The trend to more wasteful public spending persisted in all countries except Azerbaijan • Moldova, Ukraine and Georgia managed to improve rules of doing business, with the opposite trend registered in Belarus, Armenia and Azerbaijan • Ukraine’s public spending has remained the most wasteful over the whole observation period, market dominance increased in 2014 for the second consecutive year • Comparison with the EU: • Georgia keeps up the leading position on doing business • Contrarytotheprevious-yeardevelopment, South Caucasus countries lost momentum in consolidating public spending and the gap toward the EU widened

MAIN FINDINGS 2014 • Except Georgia, the EaP countries failed (again) in approximating the European principles of public administration • Highlighting improvements on civil society and e-governance • Georgia has been improving steadily since 2010, the change of the government does not seem to have reverted the reforms • Georgia’s followers, Armenia and Azerbaijan, have loosened improvements – even if in different national environments • Ukraine and Moldova did not manage to display any meaningful improvements, further development should be followed closely • The distance to the EU levels remains long, however, Georgia has shown that this distance is not insurmountable

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OTHER INDICATORS AND MEMORANDA SLIDES

Definition of indicators

Observed economies: GNI per capitaIn current U.S. dollars Source: The World Bank Atlas 2013

A1. Constraints to government powersby judiciary, law, legislature, independent auditing, non-governmental controls; sanctions for misconductGrades from 0 (worst) to 1 (best)

A2. Favouritism in government decisionsGovernment officials show favouritism: 1 – always … 7 – never

B2. Corruption perceptionThe economy is: 1 – highly corrupt … 100 – very clear

C2. Judicial independenceTo what extent judiciary is independent from influences of officials, citizens or firms: 1 - heavily influenced; 7 - entirely independent

C3. Diversion of public fundsHow common is the diversion of public funds to companies, individuals or groups due to corruption: 1 - very common; 7 - never occurs

D1. The ease of doing businessCountries’ ranks among 189 economies

D3. Wastefulness of government spendingHow efficient is the government spending in providing necessary public goods and services: 1-extremely wasteful; 7-very efficient

DD. Extent of staff trainingTo what extent do companies invest in staff training and personnel development: 1 – ignore; 7 – to a great extent

E1. Public institutionsConsolidating indicator: 1 – worst … 7 – best

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