ADMINISTRATIVE CHANGE: Strategies and EU Accession

1. ADMINISTRATIVE CHANGE: Strategies and EU Accession Professor Ivan Koprić Faculty of Law, University of Zagreb

2. The main differences between the public and private sectors The public sector is a complex value area (political, legal, social, ecological, economical values) / the main value orientation of private sector is economic one Profit is the main indicator of success in the private sector / public servants should fulfil different expectations (problem of performance measurement) Private sector actors are proactively seeking niches with fine prospects for profit, while public administrative organizations are, in general, reacting to the problems in wider environment by decision-making, regulation, support, etc.; PA is an instrument for resolving public problems

3. Public administrative system: composition and the main tendencies State administration – organised as the system of classical administrative organisations like ministries; reorientation to the “core-business” (smaller organisations concentrated on the public policies, drafting regulations, authoritative decision-making, inspections, and similar tasks) Territorial self-government (local and regional); harmonisation in wider European context; decentralisation and new legitimacy; wider responsibilities: from administrative tasks to the support of economic and social development Services of general interest (economic and non-economic, i.e. social, health, etc.); new European regulation of the services of general economic interest, especially in network industries; European social model Overall Europeanisation within broader globalisation context

4. Public sector values are integrating governance system are crystallized through political processes of amalgamation interests and ideologies Public administration should gain overall legitimacy in its social milieu – that is why it has to adapt to complex value orientations. Value heterogeneity: Continental European space: stress on the political, legal, and social values (Hegel: a state is God’s walk on Earth; Greek democracy and Roman law tradition) Anglo-Saxon space: stress on the economic values and pragmatism (brutal economic and social situation) Within the public sector: different situation in transport sector, finances, local self-government … during historical development: political – legal – social – economic - ecological

5. Types of public sector values Political (democratic): accountability, publicness, transparency, responsiveness, political decentralisation, openness, legitimacy, flexibility (user-friendliness) Legal: the rule of law, legality (organisational, substantive, procedural, with regard to competence), legal responsibility (for damage caused by illegal functioning, or disciplinary responsibility), legal certainty, protection of fundamental rights and freedoms, equality, impartiality, due process, court supervision Social: social justice, solidarity, social sensibility, care, charity, sympathy, mercy, assistance to the citizens, cultural diversity, respect for national, sexual, and other minorities Ecological: protection of natural environment, protection of biological diversity, careful management of natural resources, life in harmony with nature Economic: the three Es (economy, efficiency, effectiveness), quality, market-orientation and private sector-orientation, competitiveness, entrepreneurship

6. Administrative reforms ARs are, in a way, a consequence of generally reactive nature of public administration: new politics asks for new administrative arrangements; PA should adapt to changed expectations and search for a new legitimacy; PA should in-build new technologies; it should find innovative solutions for quite new problems; ARs are significant, deep organisational, institutional and cultural changes in public administration that occur periodically. Types (Farazmand, 1999): 1. purposive (motivated by certain purposes; purposive model), 2. adaptation (environmental dependency model: to respond to environmental pressures), 3. institutional (changing organisational culture and behaviour; changing mindset) Formal (official) and informal (latent) purposes and functions of ARs; problem of rising expectations Success factors: political and public support, human and material resources, reliable organisation, well-thought-out strategy, dedicated reform leadership …

7. Administrative doctrines vs. science of PA Administrative doctrine – a system of ideas about desirable way of operating and prescriptions about good practices, grounded on dominant values and systematised experiences, comprising standards with regard to organisation, functioning, regulation, management, etc., in public administration. Social, economic, political, demographic, and other circumstances are influencing doctrines, also. Lack of empirically verified theories (consolidated knowledge) opens space for doctrines. Doctrines are verified in practice. Cameralism, the New Public Administration (the Minnowbrook Perspective; USA; Frederickson, Waldo, Marini, Chandler, Rohr, etc.), the New Public Management, Good Governance …

8. Strategies for administrative change Pollitt and Bouckaert (2000; 2001): Maintain. To preserve and incrementally improve (up-grade) classical, Weberian model of public administration as rational, well-organised, monocratic organisation with fine tailored hierarchy, professionalism, impartiality, legality, and standardised bureaucratic procedures. Modernise. More fundamental changes in structures and functioning (from procedures to results; output budget orientation; autonomous executive agencies; from appointment acts to employment contract, etc.) Marketize. Introduction of market principles and mechanisms in the PA system (internal market – British NHS and competition of hospitals; charging real market prices; consumer-orientation) Minimize. Shrinking the public sector by privatisation, contracting out, public-private partnerships, civil (voluntary) sector involvement, etc.

9. The New Public Management Imposing economic values and private sector techniques into the public sector Stress on economy and efficiency; ideology of state failure; inclination to private entrepreneurship and free market economy From the 1980s, grounded in neo-liberal ideology Conservative political actors in Anglo-Saxon countries New Zealand, Australia, Canada, UK, USA Significant role of international organisations (IMF; WB; OECD) Attack on welfare state; reaffirmation of capitalism class structure; neo-colonialism

10. The New Public Management - elements Hood (1991): Autonomous professional public managers; wider leadership competences and individual responsibility Performance indicators (quantitative, if possible), performance measurement Output control, disregarding procedures; performance-related pay systems; decentralised HRM Fragmentation of large PA organisations; smaller, financially more autonomous organisations with one main “product” (public service) that compete at the internal market and/or with private organisations Competitiveness, public tendering, contractualisation Managerial style more in line with private sector practice: flexibilisation in employment arrangements, public relations like in the private sector, etc. Economy and cost reduction; including regulation costs reduction (deregulation)

11. Structural and functional measures and effects a) Structural Reduction (lean state; privatisation, budget reduction, reduction of the level of social rights, etc.) Forms of private and third sector participation in public affairs (PPP, outsourcing, concessions, etc.) Loosening structural ties (fragmenting state; agencification, decentralisation, greater autonomy of public sector organisations, etc.) Problems: accountability, coordination, strategic policy, ethics, local self-government, costs b) Functional Marketisation of the state; public market Competitiveness Real prices Services of general economic interest (liberalisation and privatisation) Deregulation De-bureaucratisation (removing procedural obstacles to private sector subjects and citizens; management by results) New budgetary solutions; internal and external audit, etc.

12. NPM – Ideas and effects with regard to personnel; social consequences Personnel More mechanical measures (reducing the number, pays reduction, flexibilisation, private sector managers engagement, greater autonomy of public managers with regard to remuneration, payment and career system, etc.) Human potentials development (education, in-service training, organisational culture building, ethics, orientation towards results and citizens’ needs) Problems: instability, insecurity, organisations as psychic prisons, unsuccessful organisations, consumerism, etc. Social consequences Reinvigorating capitalism (state failure) Crisis of welfare state: poverty and lower level of social services, unemployment rate is increasing Democratic deficit: weakening democratic legitimacy of the state Anomy (crime, social conflicts, disregarding legal regulations) Positive effects?

13. Good Governance NPM criticisms during the 1990s followed by building new set of ideas at a bit different value base The role of international organisations: OUN; OECD; EU Still under construction and stabilisation European Governance: A White Paper (Brussels: COM (2001) 428) (governance based on proportionality and subsidiarity); fundamental principles: Openness Participation Accountability Effectiveness Coherence The stress is on the role of the citizens, civil society, and local self-government UNDP: combination of efficient and democratic governance OECD: Citizens as Partners: Information, Consultation and Public Participation in Policy-Making, 2001 Increasing administrative and policy capacities + legitimacy strengthening

14. The European Administrative Space Set of principles and standards of public administration organisation and functioning defined by law, whose application is supported by the appropriate procedures and accountability mechanisms Macro perspective (EU – uniform implementation of the law, the Council of Europe, the main European traditions and models) Micro perspective (administrative fields, issues, processes, actors, institutions …) Space in rising and development (different components in different developmental phases) The role of the courts, EU policies, regulatory bodies functioning, mutual - experiential learning, doctrines,administrative education, imitation, interaction …

15. The main principles of the EAS The rule of law (legal certainty, reliability and predictability of administrative actions and decisions, legality) Openness and transparency Accountability of PA to other administrative, legislative and judicial authorities Efficiency in the use of public resources and effectiveness in accomplishing policy goals

16. EU Accession Complex and hard task Political dedication and administrative capacity Harmonisation with the acquis communautaire (legal adaptations) PA capacity to support negotiations, to acquire the European administrative standards, to design and implement new European-inspired public policies, and to implement the acquis communautaire and new, changed domestic legislation Although administrative standards are not part of the formal acquis communautaire, EC has possibility to monitor, ask for change, look into AC implementation, etc. Good administration as a general criterion for EU accession The SIGMA role: assessments are the basis for EC Progress Reports, designing ToR of the TA projects financed by EC, support to administrative modernisation, etc.

17. European administrative standards Codification of standards, mainly by SIGMA Standards with regard to: Constitutions (6) Civil Service legislation (8) Administrative Procedures legislation (10) Public sector financial control (9) External audit (4) Budget and public expenditure management (13) Policy-making and coordination at the centre of the government (9) (systematisation according to Cardona) CS legislation: paper no. 5: Civil Service Legislation Contents Checklist; paper no. 14: Civil Service Legislation: Checklist on Secondary Legislation and Other Regulatory Instruments

18. Harmonisation of local self-government – The Council of Europe; EU The European Charter of Local Self-Government of 1985 (the German model influence) Other legal documents (on transfrontier co-operation 1980, Urban Charter 1992/2004, on the participation of foreigners in public life at local level 1992, draft Charter of Regional Self-Government, etc.) EU, regionalism and regional policy NUTS classification (Nomenclature des Unites Territoriales Statistiques) (5 categories; regions as NUTS II. units) Committee of the Regions (opinions and resolutions)

19. Convergence or divergence? The European local self-government traditions and models: The French centralised model The German model (federation, subsidiarity principle, detailed regulation of local self-government scope) The British model (unwritten constitution, sovereignty of the Parliament, ultra vires legal doctrine) The Scandinavian model of political decentralisation with bigger local units Europeanization, harmonisation, learning – convergence  Tradition and cultural diversity – divergence

20. Services of general interest Former public services: liberalisation on separate markets, privatisation of former state monopolies; quality concerns Services of general interest Services of general economic interest Network industries (telecommunications, electricity, gas, transport and postal services Other SGEI (waste management, water supply, etc.) Other (non-economic) services (social, health) Public sector obligations (universal service, continuity, affordable prices - affordability, quality of service, user and consumer protection) Sectoral policies development (energy, electronic communications, transport, postal sectors, audiovisual policy, water and waste management, sport, culture, etc) Designing coherent policy and legal framework for social and health SGI Directive 2006/123/EC (the Services Directive): MSs have to transpose it by the end of 2009 The most dynamic and challenging sector

21. Europeanization of the Republic of Croatia Croatia as a late-comer Formal and substantial Europeanization Membership in the Council of Europe (1996) Stabilization and Association Agreement (2001) EU candidate status (2004) Negotiation process Administrative education

22. State administration development I. 1990-1993 – Establishment phase Semi-presidential system Considerable new parts of state administration (new ministries, etc.) War Politicisation; poor professional standards; hidden lustration II. 1993-2001 – Consolidation phase (war till 1995) Etatisation and centralisation A number of poor reorganisations Very slow democratisation First Law on State Civil Servants in 1994 III. 2001-2008 – Europeanisation phase First political change after 1990 (coalition Government); parliamentary system Democratisation, decentralisation, attempts to raise professionalism (second Law on State Civil Servants in 2001; third one in 2005) Stabilization and Association Agreement (2001); candidate status in 2004; accession negotiations; institutional capacity building; functional review; etc. IV. 2008 – Modernisation phase? The State Administration Reform Strategy

23. State administration Central state administration Ministries (15) State administrative organisations (9) Central state offices (4) First instance state administration Offices of state administration at the county level (20) Offices of the City of Zagreb (4) + transferred state administrative tasks Government (+ Secretariat + certain other bodies = Government’s Professional Service, Government’s Office) State servants and employees ICT implementation; Functional Review Project; preparation of the new law on general administrative procedure and law on administrative justice system, new system of human potentials development and management; organisational adaptations, etc. Agencies, independent regulatory bodies, other public bodies and legal entities with public competences

24. Local self-government system Local self-government: municipalities (429) + towns (126; 15 large towns with more than 35.000 inhabitants); territorial self-government below municipal level (municipal and urban districts, city quarters) Regional self-government: counties (20; about 200.000 inhabitants in average) City of Zagreb (capital, the largest city, double status as local and regional unit, performs transferred state administrative tasks) Fully separated from the state administration system with regard to organisation and personnel Searching for a new legitimacy – introduction of direct election of mayors (elections in May 2009)

25. State administration reform strategy Adopted by the Croatian Government in March 2008 as part of EU accession efforts (www.uprava.hr) Structure: Executive summary State administration we want (Vision and goals of modern administration) The main results in the reform of political system and state administration The main areas and directions of state administration reform Implementation of strategic measures Leadership, monitoring and evaluation of results

26. State administration reform strategy - goals Increasing efficiency and economy in state administration system Raising the quality of administrative services Openness and access to state administrative organisations The rule of law Increasing social sensitivity inside state administration and in relations with citizens Rising ethical level and reducing corruption Modern ICT implementation Joining the European Administrative Space *accompanied by 29 indicators

27. State administration reform strategy – main areas and directions Structural adaptations of state administration system: from structure to good governance (3 directions; 13 activities) Increasing quality of programmes, laws and other regulations: better regulation (4 directions; 14 activities) System of state servants: modern civil service (4 directions; 10 activities) Education and in-service training of state administration: knowledge, skills and competencies (2 directions; 8 activities) Simplification and modernisation of administrative procedures: e-administration (2 directions; 17 activities)

28. Other strategic documents Strategic Development Framework for 2006-2013 - Previous efforts: 55 recommendations for improving national competitiveness of Croatia Decentralisation strategy under preparation – failure? - Previous efforts: Decentralisation of Public Administration (2000-2003) Lack of overall strategic document with regard to services of general interest - Sectoral documents (for example, Strategy for Development of Communal Utilities)

29. Implementation, management and monitoring PAR Implementation: Central State Office for Administration Management: Government and CSOA; vice prime minister for public administration reforms Monitoring: National council for monitoring and evaluation –established in the Autumn of 2008 {Policy making: Government (formally); CSOA (???); domestic and international experts (???); business community (???)}

30. Central State Office for Administration Established in 2004, as one of four central state offices as special tool for increasing managing and coordinating capacity of the prime minister (responsible to PM) History: Ministry of Administration; State Directorate for State Administration and Local Self-Government Increasing capacity: from 66 to about 140 employees Vague role design (legal regulations) Organisational gaps and possible improvements Lacking human potentials and low professional level Moderate political, administrative and public support Facing reorganisation according to the results of FR?

31. Main challenges Political support – Croatian Parliament; Administrative support – changing position in administrative system; Public support – communication strategy and activities; Strategy development; CSOA internal organisational development; National council establishment; Capacity development – education, training, recruitment Financial support – lack of support from the Ministry of Finance

32. Lessons learned PAR as part of the Europeanisation process is not the best solution for domestic problems (Europeanisation is only one of theenvironmental influences; EU is one of broader institutional frameworks, not the only one) PAR should be in line with previously discussed and adopted basic national goals – otherwise it could be unsuccessful or counter-productive Three main parts of PA (state administration; local and regional self-government; public services) need different reform approaches Strong administrative body needed (Ministry of Public Administration, probably with vicePM as a minister) Laws could foster or freeze reform efforts, but cannot replace real will to make PA modern and better Policy orientation should be developed Education and training should be more intensive – capacity building State administration system, structural, personnel, human resource, financial etc. measures needed

33. Institutional challenges Good institutional structure is a necessary prerequisite for successful reform, but other prerequisites are needed and are of equal importance (political will and support; strategic planning and policy making; educated and informed civil servants; extra-organisational expertise; financial support; reform dedication, etc.) – institutions do matter Inappropriate institutions (weak institutions or inappropriate networks of institutions …) impede positive impacts of other favourable conditions Institutions should be adapted to the specific circumstances of a country (culture, external conditions, basic state’s goals …) Certain regularities are generally recognizable and could be used for learning and suggesting proposals Significance of good and bad examples in similar and different conditions – experiential learning

34. Good and bad Croatian examples Good examples: Cooperation between academic community and CSOA in the Strategy preparation, education, reform monitoring and evaluation TA projects with participation of pro-reform domestic experts as key experts Strong politicians as reform leaders Bad examples: Attempts to preparethe strategy and realise certain reform measures with teams consisting exclusively of academics, or CSOA servants, or foreign experts (similar in acquiring acquis communautaire) Weak lines of CSOA state secretary’s political accountability to the PM Informally politicised networks Too broad networks of politically selected experts for EU accession negotiations

35. Administrative education Development trends in Europe: Creation of a comprehensive administrative education system with vertical mobility (3+2+3) Diversification of administrative education programmes, along with consolidation of general administrative programme More attention to practice Impregnation by dominant doctrines More multidisciplinary and interdisciplinary-oriented programmes Croatian situation: Bologna process since 2005 Binary model of high education (polytechnics and universities) Administrative education at polytechnics (BA degrees) MA degree missing Postgraduate studies – specialist and doctoral programmes Predominantly legal or managerial orientation Unsatisfied specialisation of specialist programmes

36. Thank you! Professor Ivan Koprić Faculty of Law, University of Zagreb Mailto: ikopric@pravo.hr