Agencification and de-agencification trends in the countries of Central and Eastern Europe

1. Agencification and de-agencification trends in the countries of Central and Eastern Europe Dr. Vitalis Nakrošis, Institute of International Relations and Political Science, Vilnius University Tarptautinė konferencija Viešasis valdymas Lietuvoje. Europos patirtis – ateities iššūkiams 2011 m. gegužės 12-13 d. Vilnius

2. Table of contents • What is an agency, (de-)agencification and agency change? • How one can explain agency change? Framework for analysis and hypothesys; • Agencification trends in CEE countries; • Agency models and agency change in Lithuania; • Conclusions, future trends and alternatives for agency reform.

3. What is an agency? • Agency features: • public law bodies; • some (policy or managerial) capacity for autonomous decision-making; • structurally disaggregated from the government and its ministries; • formally under at least some control of cabinet members; • some own resources (financial and personnel). • Agencies in Lithuania: Government agencies, agencies under the ministries, other agencies (e.g. four legal statuses of the EU support agencies); • Other public sector organisations: state institutions provided in the Constitution(e.g. State Security Department) or accountable to President and Parliament (e.g. Special Investigation Service), other organisations.

6. Agency changes • Agencification and de-agencification: increasing number of autonomous organisations (at arms‘ lenght of the core government) versus decreasing number of such organisations; • Types of agency change events: • Birth, secession, split: events leading to the expansion in the number of agencies; • Absorption, merger, death: events leading to the contraction in the number of agencies; • Replacement, transfer of functions, change of name and subordination: change events not affecting the number of agencies.

8. Hypotheses of agency change in Lithuania • Agency change in Western democracies: NPM, Government priorities/aims, management reform (often amid financial crisis); • Agency change during state-building: separation of politics and administration, transparency and decentralisation; • Agency change in post-communist countries: frequent change of governments, party-based logic of change, institutional instability; • Nature of change process? Strategic decision-making according to „grand design“ versus ongoing „muddling through“ in relation to each organisation.

9. Ideal NPM-agency model

10. Experience of foreign countries • The United Kingdom: “Next Steps” reform and executive agencies (also non-departmental public bodies); • The Netherlands: executive agencies, ZBOs, RWTs; • Belgium (Flanders): departamental agencies, internally devolved agencies, externally devolved agencies with the status of public or private legal body; • Estonia: governmental organisations, state agencies, public institutions, private law-based not-for-profit organisations.

11. Agencification in CEE states (CR, HU, EE, LT, RO, SK): similarities • Expansion and restructuring of governmental functions during the transition period and EU accession as a main driver; • Ad hoc, sectoral agencification, no comprehensive approach, no clear agency model, as well as the legaltistic approach; • De-agencification started in the previous decade.

12. Agencification in CEE states: differences • New and old states of the region: the larger scope of change in new states (including LT); • Different timing of agencification and country status (e.g. CR); • Politicisation and its variation (more important in the Visegrad countries); • Comprehensive agency reforms in LT and RO since 2009.

13. Change of agency models in Lithuania • Soviet model: ministries, state committees, offices, executive committees, enterprises and other organisations; • Model in the 1994 Government Law: Government agencies deal with cross-sectoral issues, and agencies under the ministries are responsible for sectoral issues; • 1994 model of territorial administration not implemented: no transfer of implementation functions to the county administrations; • Model of a strong regulatory agency during the EU accession (1997-2004)in specific legislation; • Current model of executive/agencies(2009-2010): agencies within the ministerial competence, separation of policy-making and implementation.

14. 1994 agency model

15. 2009 agency model

16. Is there a clear agency model in Lithuania? • in August 1993, the VI Lithuanian Government revoked the previous decision to reorganise the State Price and Competition Service into a service under the Ministry of Economy (made in January 1993); • In 2009-2010, the Public Procurement Service under the Government was reorganised into an agency under the Ministry of National Economy, but already in 2011 an amendment to the law was drafted in order to make it accountable to the Lithuanian Parliament.

17. Results? An astronomical approach • „Currently, the set-up of executive power reminds astronomical maps with planets, their satellitesand clusters of asteroids” (Veidas)

18. Mapping of the Lithuanian agencies under six selected ministries

19. Primary and secondary factors of (de)agencification in Lithuania

20. Influence of political factors on agency changes in Lithuania • Changes of the agencies under the 5 ministries over the period of 12 months following the government change: • a) 30 changes(5 changes a year) under a large change in the parliamentary majority(Governments No. 1, 5, 6, 8, 11, 12, 15); • b) 14 changes(2 changes a year) under a small change in the parliamentary majority (Governments No. 2, 3, 4, 7, 9, 10, 13, 14).

21. Agency changes in Estonia and Lithuania (1) • Similarities: institutional heritage from the Soviet period, EU influence, as well as pressure during transition; • Differences between EE and LT: smaller institutional fragmentation (the number of agencies is smaller in EE), more stable legal framework and institutional set-up (boards and inspectorates in EE), earlier modernisation of ministries (1993-1995 in EE, and 1998-2000 in LT), earlier start of de-agencification (2004 in EE, and 2008 in LT).

22. Agency changes in Estonia and Lithuania (2) • How one can explain it? • Polity-level factors: e.g. cross-party consensus in EE versusadversarial party politics in LT; • Approach to agencificationin the Government and civil service: more managerial approach, higher trust between politicians and civil servants in EE versusthe legislatic approach, lower trust in LT.

23. Conclusions • Lithuania as a leader of agencification (driven by transition and accession) in two previous decades; • Political, ad hoc changes in the absence of a stable institutional basis (agency model); • Agency expansion at the central level without decentralisation and deconcentration of power; • “Normalisation” of agency change in 2009-2010, a wide scope of institutional reforms with slow implementation.

24. Agencification trends in the future • “Normalisation” of agency changes will stay, i.e.agency changes will be affected by Government priorities/aims, public management reforms, as well as economic situation (rather than the changing role of the state); • However, the post-communist nature will remain important: agency changes will be influenced by the party logic, and the intensity of changes will be determined by a change in the parliamentary majority.

25. Alternative No. 1 : new „grand design“ • Improve the model of institutional set-up: establish groups of organisations according to their functions (implementation agencies, regulatory agencies, service delivery bodies, etc.) with corresponding regimes of autonomy and control (leading to more transparency and better performance); • Institutionalising changes: seeking a cross-party consensus, if possible, and changing the appropriate legislation (Laws on Government, Public Administration, Budget Institutions) and its implementation.

26. 2 alternative: further „muddling through“ • Reducing the number of agencies through deaths, mergers, absorptions, taking into account reorganisation costs; • Ongoing reorganisation of regulatory agencies, but the structure and performance of policy implementation agencies and service delivery bodies should be changed as well.

27. Sources about agencification in Lithuania • T. Randma-Liiv, V. Nakrošis, G. Hajnal. "Central and Eastern Europe: from agencification to de-agencification". A global compendium of agrencification. Palgrave Macmillan, forthcoming.  • V. Nakrošis, Ž. Martinaitis. "Lithuania". A Global Compendium of Agencification, Palgrave Macmillan, forthcoming. • V. Nakrošis. "Viešojo valdymo reforma Lietuvoje: kodėl ir kuo reikia pakeisti Naująją viešąją vadybą?“, Politologija, 2011, Nr. 1. • V. Nakrošis, Ž. Martinaitis. "The Lithuanian Public Sector Organisations: the EU-driven expansion within the domestic arrangements of autonomy and control". Viešojipolitikairadministravimas. 2009 m., Nr. 29. • Ž. Martinaitis, V. Nakrošis. “Explaining Innovations in the Lithuanian Public Sector: New Public Management, Administrative Culture and Structural Capacities.” The Lithuanian Political Science Yearbook 2008. Institute of International Relations and Political Science, 2009.