Public Management Innovations and Administrative Capacity

1. Public Management Innovations and Administrative Capacity Tony Verheijen Senior Public Sector Management Specialist The World Bank

2. Context • New Member States move to a next phase in their membership with the 2007-2013 financing framework • Three further CEECs in an advanced stage of preparation for membership • Administrative capacity is a key issue in determining the quality of fiscal management, competitiveness and ability to use the benefits of EU membership Key question: how to improve administrative quality beyond core EI functions (transposition etc.)?

3. Context ctd. Two years after accession some doubts remain on administrative quality in CEECs: • Low fund absorption capacity does not bode well for the 2007-2013 period • Fiscal management issues remain in several states Also: Competitiveness issues (and their linkage with administrative quality) will gain importance as economic development parameters continue to converge

4. The Bank Study • Follow-up to the 1999 ‘Ready for Europe’ Study • Focus on innovations and best practice combine with review of basic parameters of administrative capacity • Using a benchmarking approach based on accepted indicators of administrative capacity • Combining in-depth studies with desk review

5. Main Findings • Some interesting and advanced innovations, in particular on performance management and e-governance • Reversals of earlier progress in several states on basic aspects of civil service development • Concerns on policy coordination capacity

6. Benchmarks • Strategic planning and performance: OECD and CAF best practice indicators rated according to the CAF scale • Policy coordination: Metcalfe Scale • Civil Service: SIGMA baselines • E-Governance: advancement in terms of phase of development

7. Benchmarking: performance management and strategic planning • Systems in Latvia and Lithuania are advanced, and would rate above EU average, though individual appraisal is a weak link • Other states (especially SK) show some agency based innovations, but no systemic approach Introducing an overall strategic planning and performance agenda is crucial for successful structural fund implementation

8. Benchmarking on strategic planning

9. Performance Management

10. Policy Coordination • Most states would meet ‘healthy’ minimum levels on specialized EI coordination (levels 4-5 on the Metcalfe scale) • Most states would rate with the weakest among the ‘old’ member states on overall coordination

11. Overall Coordination

12. EI coordination

13. Civil Service • Focus on four aspects: • Legislation • Horizontal Management • Politicization • Incentives

14. A Case of General Backsliding? A SIGMA assessment now would show reversals on key issues: • Legislation in many cases revoked or ‘dressed down’ • Horizontal management remains weak, and in many cases is being eliminated • Politicization continues to be an issue • Limited progress in reform of incentive systems The scope for the establishment a ‘classical’ civil service model is questionable for a number of states

15. Key Issues • How to create a high quality administration if political will to create a ‘classical’ civil service is low? • Incentive systems: how to go beyond seniority and opaque and ad hoc bonus systems? • Can politicization be managed?? • Are horizontal management structures at all viable? If not, what is the alternative?

16. Service delivery • E-Governance innovations in Estonia continue to be a best practice • However, for fiscal and other reasons replicability would be difficult • Less comprehensive and incremental approaches need more encouragement

17. Can best practices provide inspiration for reform? Review of replicability: systemic and agency specific innovations: • Performance management and strategic planning systems are generally home-grown and can be adapted • Linkage to individual performance and rewards needs to be established • Investment in such systems will pay off in terms of improved fiscal management, improved structural fund absorption and a more attractive investment climate

18. Service delivery Estonia as an exception or a model? • More scattered innovations in other states show the potential of e-services • Investment and infrastructure considerations may make full replication very difficult

19. Agency specific reforms • Problem of roll out, seen in both Latvia (late 1990s) and Slovakia (recent years) • Could provide thoughts on how to move from institutional performance to individual level

20. Lessons and Agenda • Interesting best practices have ‘grown up’, and should inspire other states • Foundation issues remain and will affect state performance on crucial aspects of public management if not addressed • Classical approaches to civil service development may not ‘stick’ and alternatives may need to be found to address stability and incentive issues