Government at a Glance 2017

OECD

• Publisher: OECD
• Year: 2017
• Topic: Social Sciences
• eBook ISBN:
  9789264268746
• Subtopic: Sociology
• Index: Social Sciences

Chapter 1. Embracing continuous change in government

Introduction

National governments in OECD countries face a political, economic and social environment that is increasingly unpredictable, complex, and that extends beyond national borders. Many are under pressure to address the impact of globalisation and to respond to a backlash among significant segments of the population. They are being called to lead national economies out of the current low-growth trap by increasing productivity, while ensuring that the fruits of growth – both in terms of jobs and income – are distributed more equally across society. And they are expected to respond to the disruptive effects of technological change. Coupled with an ageing population, high youth unemployment and persistently high levels of public debt, these policy challenges – and the lack of adequate responses – have led to the polarisation and fragmentation of public opinion on a number of societal issues such as economic integration and the control of migration flows.

Governments continuously reform to be more effective, efficient, open and responsive to policy challenges. But do these reforms always bring the expected results? Evidence on the impact of recent comprehensive reform packages introduced in a number of OECD countries in response to the 2008 crisis suggest that, despite austerity measures and cuts in spending and programmes, government indebtedness has not declined much. Furthermore, public employment and pay remain, on average, stable across OECD countries, notwithstanding the significant cuts carried out in the most affected countries. At the same time, economic recovery has only just started to pick up in a number of OECD countries, while unemployment, especially among the youth, remains high. Citizens’ trust in government is currently at a record low. While this can be partly attributed to the legacy of the crisis, it is exacerbated by the perception that government reforms are ineffective, not implemented properly, and do not consider who the winners and losers are likely to be.

This raises the question of whether reforms are being designed to deal with growing complexity, and are they properly joined-up and implemented? So-called “wicked problems” – that is, problems characterized by uncertainty, complexity, divergent values and interdependent processes, structures and actors – cannot be addressed by partial or transactional solutions, but require concerted, adaptive and carefully stewarded approaches (OECD, 2017c). Climate change, globalisation, changing demographics and technological developments have given rise to policy problems whose causes and effects are difficult to identify, and that cannot be addressed through the efforts of a single actor or policy sector.

This uncertain political, economic and social environment comes with a number of challenges for governments and the way they operate. The policy-making environment has become also more complex, with a growing number of non-traditional actors from civil society, and questions about the impact of money and other types of influence on policy directions. The polarization of public opinion is reflected in political fragmentation, for example through the establishment of minority or coalition governments in a number of OECD countries with less power to act. Furthermore, policy makers need to choose from among a myriad of options to address these and other policy challenges, frequently without the opportunity to gauge their full implications. In the face of these challenges, piecemeal approaches and reforms designed in silos are no longer sufficient.

This chapter argues that a traditional approach to reform may be less and less relevant as the global context and accompanying policy challenges become ever more fluid and complex. Furthermore, without open and participative processes, traditional reform approaches can become captured either by private interests or by those of the public administration itself that may be resistant to working in new ways. Instead, governments need to prepare their public administrations for continuous change by identifying clear, desired outcomes and measures of progress; putting in place systems that support innovation and collaboration to reach those objectives; and promoting transparency and co-production with business and society to ensure that the public sector continues to work for the public good. This fifth edition of Government at a Glance provides a number of key metrics to support systems change in government and outcome-oriented policymaking.

1. The challenges. . .and shortfalls. . .of public sector reform

1.1. Is a new approach needed to help governments adapt to change?

Governments are constantly reforming. Though the word is used very loosely and can mean any change that governments make in their public policies and management practices, there are nonetheless many reasons for reform. The most obvious one is the change in context in which governments operate, leading to changes in the policies and practices they pursue. Changes in context may derive from changes in the economic or social environment, or in technology. They often originate in political change, for example, when after an election a new political party comes to power receiving a mandate from the electorate to pursue new policy solutions to existing problems. Reforms might also be needed if current solutions do not work due to their faulty design. Often, reforms arise from mimicry or peer-learning: many of the public management practices related to New Public Management spread this way in the 1980s and 90s, with international organisations – including the OECD – playing an important role in their diffusion. Reforms could have their roots in the spread of a particular ideology, such as those reflected in the policies of Thatcher and Reagan, or in management fads. Finally, new problems may arise that might require new policy interventions.

But traditional public sector reform approaches may no longer be able to adapt to a complex, fast-changing and interdependent world. Firstly, because in a context characterized by shorter economic cycles driven by disruptive innovations, governments need the capacity to respond faster than ever before to new challenges and demands from citizens, businesses and civil society. This requires effective foresight and leadership to anticipate upcoming challenges, including for instance in regulating innovative technologies such as artificial intelligence, big data and the sharing economy, but also having the agility to integrate new ways of working and technologies into government. Failure to embrace continuous change and flexibility in government may reinforce people’s perception that governments are always lagging behind the evolutions that occur in societies. At the same time, governments need to balance expectations for faster and continuous adaptation with the call for more inclusive policymaking that offers information and access to a wide range of stakeholders at earlier stages of decision-making.

Secondly, as the global understanding of complex issues is growing, a consensus is emerging on the failure of piecemeal reforms developed in sectoral and national silos to deliver long-term results. Addressing some of the Sustainable Development Goals (SDGs) related to climate change or gender equality but also issues such as tax evasion require reforms designed and implemented across policy sectors and functions (for instance to embed gender equality in budgeting practices and procedures, regulatory impact analyses, public procurement decisions and human resource management) and in close synergy with the international community. Rather than moving from one steady state to the next, public administrations need to be guided by clear policy objectives to respond to constant and rapid change and emerging policy challenges.

As reforms invariably result in winners and losers, undue influence exercised on the policymaking process by interest groups can undermine the extent to which reforms are designed and implemented for the public interest. Reforms may also fail to be properly implemented due to vested interests and resistance to change, for example to protect organisational boundaries and responsibilities. These types of behaviour result in fragmented or biased reforms that further undermine public trust and reduce the ability to enact further reforms. The more the policymaking processes is limited to a few, the easier it becomes for the resulting reforms to reflect only the interests of a few. Opening up processes and aligning them with outcomes in a public and visible way provides a means to look beyond vested interests and helps to mitigate policy capture both from inside government and outside government. This serves to address barriers to serving the public interest such as failure to collaborate or overt conflicts of interest. In today’s environment of rising inequality and political discontent, capture by powerful interest groups can erode the fundamental democratic process of fair decision making based on openness, dialogue and consensus (OECD, 2017d).

1.2. Complex and interdependent problems require “systems-thinking” approaches to avoid capture by existing processes and constituencies

The need for a better way to anticipate and manage change is giving rise to “systems approaches”, which analyse the different elements of the system underlying a policy problem, as well as the dynamics and interactions of these elements that produce a particular outcome. The term “systems approaches” denotes a set of processes, methods and practices that aim to affect systems change (OECD, 2017c). This holistic analysis puts the focus on the impacts and outcomes of policies, going beyond the linear logic of “input-output-outcome” of traditional approaches to policy design. It emphasises the involvement of all affected actors inside and outside of government, as well as the importance of leaving room for iterative processes to account for the uncertainty associated with wicked problems.

Traditional approaches to public policymaking tend to break down complex problems into their constituent parts and subsequently address each part through separate policy interventions. These approaches may prove unable to capture the complex interrelationships and changing nature of policy problems that transcend administrative and territorial boundaries. Furthermore, decades of public sector reforms layered one on top of the other frequently have not achieved the desired effects and may lead to incoherent or even contradictory policies.

Systems approaches do not necessarily require all elements of a system to be changed. Rather, they demand the adoption of a broad “systemic” perspective of the problem at hand and the factors causing it, as well as a purpose-oriented assessment of possible solutions. The approaches are particularly helpful in cases where there is a mismatch between the structure of the pub...

Table of contents

• Title page
• Legal and rights
• Foreword
• Making globalization work for all requires effective public governance
• Government at a Glance: A Lighthouse for our Public Services
• Executive summary
• Reader’s guide
• Introduction
• Chapter 1. Embracing continuous change in government
• Chapter 2. Public Finance and Economics
• Chapter 3. Public Employment and Pay
• Chapter 4. Institutions
• Chapter 5. Budgeting Practices and Procedures
• Chapter 6. Human Resources Management
• Chapter 7. Public Sector Integrity
• Chapter 8. Regulatory Governance
• Chapter 9. Public Procurement
• Chapter 10. Open Government
• Chapter 11. Public Sector Innovation and Digital Government
• Chapter 12. Risk Management and Communication
• Chapter 13. Core Government Results
• Chapter 14. Serving Citizens
• Annex A. Reporting systems and sources of the countries for government in the National Accounts statistics
• Annex B. Methodology for revenue aggregates
• Annex C. Classification of the Functions of Government (COFOG)
• Annex D. Methodology and Additional Notes on Compensation of Government Employees
• Annex E. Methodology for composite indexes on public practices and procedures
• Annex F. Additional figures accessible online
• Annex G. Members of the steering group
• Glossary
• About the OECD