If there were ever any doubt, current events are making it abundantly clear: good, effective government is crucial to a well-functioning economy and society. Natural disasters such as hurricane Katrina in the US, explosions of social and racial tensions in Europe, terrorism and threats of global pandemics have put government in the spotlight. Such events also underscore the high–and rising–expectations that citizens have of their governments.
People expect the state not only to ensure certain basic services and institutions, but also to respond effectively in a crisis. This is natural: good governance is also about good leadership. Even in normal times, citizens and businesses expect government services to keep pace with technology and developments in the private sector, to become more flexible and responsive to evolving needs. Meanwhile, governments–and not just in the euro area–are coming under increasing fiscal pressure, a situation that will only become more acute as our populations age.
Can governments rise to these challenges? Public administrations have been making progress. As a recent OECD review of two decades of reform shows, they have become more efficient, more transparent, more flexible, more customer-oriented and more focused on performance. Some services widely deemed “public”, from telecoms to health care, embrace market mechanisms to reduce costs and improve effectiveness. “One-stop shops” have been created, allowing citizens and businesses to complete transactions with several different government departments at a single location. More professional consultants and experts are hired for task-related contracts, in financial auditing for instance, and government leaders and officials consult more with voters directly and via the media, including the Internet.
Freedom of Information laws are now in place in 28 of the 30 OECD member countries, up from only eight in 1980. The OECD, itself an intergovernmental organisation, reflects these changes, for example by placing draft documents on issues of public interest, such as corruption, on-line for public comment before being finalised.
However, these improvements are not enough, and some have raised additional, unexpected problems. For example, decentralising too much or too soon can weaken the ability of government to ensure that national policies are adequately implemented. Moreover, shifting responsibilities to other levels of government or agencies can result in confusion about who is responsible for what. And many reforms are launched with great fanfare, but without the necessary follow-through to effect a real change in behaviour or attitudes.
But while some reforms may need rethinking, there is no question of turning back the clock. If OECD governments are to become stronger, they must go on adapting their institutions to current (and anticipated) changes. Today’s fast-paced world demands it, and countries are seeking ways to make their governments–both in terms of policymaking and service delivery–more able to respond to changing needs.
In some cases, given the multiple pressures placed on government, this may entail rethinking government’s role in areas that can perhaps be better handled in collaboration with others in the private or voluntary sectors, or indeed at local government level. Naturally, each country will decide this for itself, but thanks in part to the OECD, they will at least be able to make judgements by referring to the experience of others, seeing what works best for them, and what is less suitable.
Whatever the arrangement, all governments must focus increasingly on performance and results. This is key to any modernising strategy. The quality of governance depends on it, and our publics expect it.
That is why, over the past two decades, countries have been moving from controlling how resources are spent towards looking at what has actually been achieved with those resources. This is a major shift in the right direction, with the potential to make government more flexible and responsive as well as more efficient. Already it has led to greater transparency and accountability, with 24 out of 30 countries reporting performance results to the public.
But in practice, the shift towards performance-based governance has not been easy, and as demands heighten, so the challenges become more complex. For example, on a purely technical level, finding ways to measure results effectively–and to link results to a particular government action–is proving to be a challenge.
While countries are collecting more and better data on performance, and integrating it into the budget process, the use of this information for policy design and reallocation, as well as sharing with others, still lags. In fact, in 41% of OECD countries politicians do not generally use performance measures in decision-making. Knowing what to measure, identifying the most relevant data, understanding how to monitor progress and communicating results to the public: all of this remains a challenge for many governments, even those that are in the vanguard of change.
Of course, governments are not machines, and some aspects of their role are probably impossible to measure in, say, financial terms. Strong public service values are also essential to a high-performing state. That, in turn, depends on attracting the right calibre of personnel. A crucial challenge for countries in the coming years is building capacity by making public employment attractive, bringing in the right skills and ensuring the adaptability of staff to evolving demands.
Ageing in the workforce brings with it an opportunity for renewal in public employment from the bottom up, though this poses other problems. Moreover, as reform is about change, not going back to the drawing board, preserving institutional memory and experience, and so improving effectiveness over time, will be a challenge for management.
The starting point for any reform is diagnosis, and for that we need some hard facts. How is our public sector performing? How does our country compare? How can we design better policies based on the results of current ones? Right now, the answers to these questions are incomplete, yet without answers governments will be unable to convince a demanding public (and, sometimes, reform-fatigued civil servants) that their proposals truly will make things better. There are many stories to report on why one project succeeded and another was more complicated.
Policymakers considering reform need reliable intelligence on these experiences to be able to plot their own way forward. They also need to assess the risks involved before embarking on new policy initiatives. Finally, there is a need for better two-way communication with the public, both listening to citizens to understand their needs and expectations (and making sure citizens feel they’re being listened to), and communicating with them on the rationale for new policies as well as on the actual results achieved. And in some cases, government may just need to say “no” to certain popular demands, though explaining clearly why. Managing expectations is becoming increasingly important.
Building the data and the intelligence required to respond adequately to these needs is where the OECD comes in. It is more than about acquiring empirical evidence, but also about advising on risk assessment and implementation of best practices. These are areas we must all improve on. We all agree that good policies can have enormous beneficial impacts, but most of all they can win the public’s trust and confidence in government, as well as in themselves. Public reform is not a fashion or fad. Rather, it is a condition for building better, stronger, more open government. That is what democracy is all about.
OECD (2005), Modernising Government: The Way Forward, Paris.
©OECD Observer No 252, November 2005