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

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?

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

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)

Illustration of improved policy coordination 2001/2005

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 – of workforce left during recent years)  The Civil Service that hardly copes with attracting, maintaining and developing talent  Return of politization

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?

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)

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

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

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

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

Conclusions Past  ISOLATED INNOVATIONS  WEAKENING COORDINATION  INCNTIVE PROBLEMS  RETURN OF POLITIZATION 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