EUROPEAN PRINCIPLES OF PUBLIC ADMINISTRATION IN EU EASTERN PARNTER COUNTRIES: 4 th Comparative Report, 2014 By Estonian Centre of Eastern Partnership Presented to the 7 th 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 development Source: World Economic Forum Global Competitiveness Reports, respective years Categories I. Factor-drivenMoldova –– I-II Transition stage Armenia, Azerbaijan, Georgia, Ukraine Azerbaijan Armenia, Azerbaijan, Moldova Azerbaijan, Moldova II. Efficiency- driven – Armenia, Georgia, Ukraine Georgia, Ukraine Armenia, Georgia, Ukraine II-III Transition stage Estonia – III. Innovation- driven Germany Estonia, Germany

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 dominance as 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 European principlesIndicatorsSource A. Reliability and predictability (legal certainty) A1. Rule of law: constraints to government powers A2. Favouritism in government decisions A3. Irregular payments and bribes WJP GCI B. Openness and transparency B1. Transparency in policy making B2. Corruption perception B3. e-government GCI TI UNeGovDD C. Accountability C1. CSO Sustainability index C2. Judicial independence C3. Diversion of public funds USAID GCI D. Efficiency and effectiveness D1. The ease of doing business D2. Extent of market dominance D3. Wastefulness of government spending DD. Personnel training (testing modus) IFC / WB GCI E. Consolidating indicator E1. Public institutionsGCI

A3. Irregular payments and bribes Irregular 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 making Getting information on government decisions is: 1 – impossible … 7 – extremely easy

B3. E-government Availability 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 2 nd consecutive year (worldwide incl. EU) The same trend prevailed in EaP countries as well Improvements in e-governance, quite pronounced 2 years ago, seem to have subdued in 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 sustainability CSO 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 dominance The 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 Contrary to the previous-year development, 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 A1.Rule of Law: Constraints to government powers (WJP) The government powers are efficiently limited by judiciary, legislature, independent auditing, controls by the society; misconduct is punished A2. Favouritism in govt decisions (GCI) 1…7 1 - government officials always show favouritism; 7 - government officials never show favouritism A3. Irregular payments & bribes GCI 1…7 1 - irregular payments are very common; 7 - never occur B1. Transparency in policy making GCI 1…7 Easiness to obtain information about changes in government policies and regulations affecting business: 1 - impossible; 7 - extremely easy B2. Corruption perception (TI) 1… the economy is highly corrupt; the economy is very clean B3. E-government (UN) 0…1 Availability of e-services, e-readiness (website assessment), human resource endowment, indexes of telecommunication & e-participation C1. CSO Sustainability index (USAID) 7…1 CSO sustainability is (7-5) impeded, (5-3) evolving, (3-1) enhanced C2. Judicial independence (GCI) 1…7 To what extent judiciary is independent from influences of officials, citizens or firms: 1 - heavily influenced; 7 - entirely independent C3. Diversion of public funds (GCI) 1…7 How common is the diversion of public funds to companies, individuals or groups due to corruption: 1 - very common; 7 - never occurs D1. Ease of doing business (IFC) 1…185 Simple rating of economies on business regulations as formulated by law and practiced D2.Extent of market dominance (GCI) 1…7 Corporate activity is: 1 – dominated by a few business groups; 7 – spread among many firms D3. Wastefulness of govt spending GCI 1…7 How efficient is the government spending in providing necessary public goods and services: 1-extremely wasteful; 7-very efficient

Observed economies: GNI per capita In current U.S. dollars Source: The World Bank Atlas Armenia Azerbaijan Belarus Georgia Moldova Ukraine Estonia Germany

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

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

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

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

C3. Diversion of public funds How 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 business Countries’ ranks among 189 economies

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

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

E1. Public institutions Consolidating indicator: 1 – worst … 7 – best