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GOVERNMENT REFORM IN ITALY Franco BASSANINI Cabinet Minister for Public Administration II Global Forum Brasilia – May 29, 2000.

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Presentation on theme: "GOVERNMENT REFORM IN ITALY Franco BASSANINI Cabinet Minister for Public Administration II Global Forum Brasilia – May 29, 2000."— Presentation transcript:

1 GOVERNMENT REFORM IN ITALY Franco BASSANINI Cabinet Minister for Public Administration II Global Forum Brasilia – May 29, 2000

2 F. Bassanini - Government Reform in Italy2 The needs of Reform in the early nineties An obsolete administration: no government- wide reforms since 1865 An obsolete administration: no government- wide reforms since 1865 An inefficient administration: islands of excellence in a sea of general inefficiency An inefficient administration: islands of excellence in a sea of general inefficiency A costly administration: crucial need to balance the budget and reduce public debt A costly administration: crucial need to balance the budget and reduce public debt

3 F. Bassanini - Government Reform in Italy3 The needs of Reform Public debt up to 1994 (% of GDP) Source: Italy - Ministry of the Treasury

4 F. Bassanini - Government Reform in Italy4 Calls for Reform The need of change drives large calls for Reform and consequently a large consensus among: Public Public Businesses Businesses Labor Labor Parliament Parliament

5 F. Bassanini - Government Reform in Italy5 The Tools of Reform A broad delegating law (legge delega) n. 59 of 1997: A broad delegating law (legge delega) n. 59 of 1997: Parliament delegates Government the power to adopt legislative decrees (primary level regulation) in defined areas, pursuant to the principles set by the law The delegislation (delegificazione) mechanism: The delegislation (delegificazione) mechanism: Parliament authorizes Government to substitute primary laws with Governmental decrees (secondary level regulation) in two main sectors: administrative procedures and organization of public offices

6 F. Bassanini - Government Reform in Italy6 The main Areas of Reform Regulatory Reform Regulatory Reform Devolution to Local Authorities: administrative federalism Devolution to Local Authorities: administrative federalism Reorganization of Central Government Reorganization of Central Government Civil Service Reform Civil Service Reform A performance-oriented public sector management A performance-oriented public sector management The new Public Budgeting The new Public Budgeting A more transparent and comprehensible Government A more transparent and comprehensible Government e-Government e-Government

7 F. Bassanini - Government Reform in Italy7 Regulatory Reform 1 - the problems Regulatory inflation: Regulatory inflation: over 35,000 primary laws (of State and Regions) Regulatory costs: Regulatory costs: unnecessary burdens on the public, on businesses and even on public administrations Regulatory pollution: Regulatory pollution: ambiguity, contradictions, overlapping, layers of rules generate uncertainty on the existing law

8 F. Bassanini - Government Reform in Italy8 Regulatory Reform 2 - the simplification strategy Reducing red tape: a broad program of delegislation, deregulation, simplification, codification annual simplification laws identify procedures (disciplined by primary law) that Government is authorized to repeal or to streamline with delegislation decrees, downgrading the level of regulation more than 180 procedures already abolished or streamlined under the delegislation program drafting of consolidated texts, containing primary and secondary regulation, that at the same time substitute every previous regulation and simplify procedures in a specific area

9 F. Bassanini - Government Reform in Italy9 Regulatory Reform 3 - simplification tools Self-declarations replace 90% of the certificatesSelf-declarations replace 90% of the certificates Notification of the beginning of an activity and silent consent replace authorizations and licenses Notification of the beginning of an activity and silent consent replace authorizations and licenses A conferenza di servizi (combined services conference) replaces many administrative acts A conferenza di servizi (combined services conference) replaces many administrative acts Fixed deadlines to end a procedure Fixed deadlines to end a procedure One stop shop (on-line): a single procedure to start up a new productive plant, replacing 43 previously needed authorizations One stop shop (on-line): a single procedure to start up a new productive plant, replacing 43 previously needed authorizations Towards a costless and quicker establishment of new companies, of any kind: no more judicial authorization and publication on official bulletins Towards a costless and quicker establishment of new companies, of any kind: no more judicial authorization and publication on official bulletins

10 F. Bassanini - Government Reform in Italy10 Regulatory Reform 4 - a specific policy on regulatory quality (following OECD guidelines) Regulatory impact analysis Regulatory impact analysis to measure the cost of new regulations on the public and businesses A central Regulatory Simplification Unit A central Regulatory Simplification Unit a task force of experts in P.M.O., exclusively monitoring regulatory quality Consultation Consultation the Osservatorio per la semplificazione: a consultative body with representatives of Ministries, Regions, Local Authorities and social parties Coordination with EU and OECD Coordination with EU and OECD to learn from other countries best practices and establish common principles of good regulation

11 F. Bassanini - Government Reform in Italy11 Devolution 1 - a leaner but more efficient State Horizontal subsidiarity: focusing Governments task on its core business: closing unnecessary Government activities outsourcing and/or privatizing activities that can be more efficiently undertaken by the private sector (business and non-profits organizations) liberalization of public utilities

12 F. Bassanini - Government Reform in Italy12 Devolution 2 - strengthening local Governments Strengthening stability of local Governments Strengthening stability of local Governments direct election of Majors (since 1993), Presidents of Provinces (1993), Presidents of Regions (2000) Strengthening financial autonomy of local Governments: the fiscal federalism Strengthening financial autonomy of local Governments: the fiscal federalism transformation of State financial transfers to local Authorities into local taxation or participation in main State taxes (VAT, Income tax…) Strengthening sovereignty of local Governments Strengthening sovereignty of local Governments transferring general legislative powers to Regions (constitutional bill presented by the Government)

13 F. Bassanini - Government Reform in Italy13 Devolution 3 - the administrative federalism 1997: law n. 59 identifies a mandatory list of State tasks and plans the devolution of all other tasks to Regions, Provinces and Municipalities 1997: law n. 59 identifies a mandatory list of State tasks and plans the devolution of all other tasks to Regions, Provinces and Municipalities : five legislative decrees identify in detail the tasks to be transferred from central to local Government : five legislative decrees identify in detail the tasks to be transferred from central to local Government : Prime Minister decrees transfer groups of tasks together with related human and financial resources : Prime Minister decrees transfer groups of tasks together with related human and financial resources January 1 st, 2001: end of devolution process January 1 st, 2001: end of devolution process

14 F. Bassanini - Government Reform in Italy14 Reorganization of Central Government 1 - the general strategy The first government-wide Reform since 1865: a system up to now grown only by adding layers The first government-wide Reform since 1865: a system up to now grown only by adding layers Merging bodies with similar missions; eliminating duplication and segmentation Merging bodies with similar missions; eliminating duplication and segmentation Functions assigned by law; internal organization established by a more flexible secondary regulation. End of the traditional pyramid model for Ministries Functions assigned by law; internal organization established by a more flexible secondary regulation. End of the traditional pyramid model for Ministries Reducing the Ministries from 22 (in 1995) to 18 (present) to 12 (in April 2001) Reducing the Ministries from 22 (in 1995) to 18 (present) to 12 (in April 2001) Introducing Agencies: non-ministerial bodies with technical and executive tasks Introducing Agencies: non-ministerial bodies with technical and executive tasks Central Government Local Offices: merging several State local offices into a single interministerial body Central Government Local Offices: merging several State local offices into a single interministerial body

15 F. Bassanini - Government Reform in Italy15 Reorganization of Central Government 2 - reform of the Prime Minister Office Making the role of stimulating, guiding and coordinating more effective Making the role of stimulating, guiding and coordinating more effective A slimmer but stronger, more flexible structure A slimmer but stronger, more flexible structure Additional specific responsibilities of P.M.O.: Additional specific responsibilities of P.M.O.: Government reform, regulation, P.A., dialogue with supra- and intra- national Authorities (EU, Regions, Municipalities) Transferring all other executive tasks to sector administrations Transferring all other executive tasks to sector administrations

16 F. Bassanini - Government Reform in Italy16 Reorganization of Central Government 3 - from 18 to 12 Ministries 1 – Ministry of Foreign Affairs 2 – Ministry of the Interior 3 – Ministry of Justice 4 – Ministry of Defense 5 – Ministry of Economy and Finance - Ministry of the Treasury and Budget - Ministry of Finance 6 – Ministry for Production Activities - Ministry of Industry, Trade and Crafts - Ministry of Foreign Trade - Ministry of Communications - P.M.O. Tourism Dept. 7 – Ministry of Agriculture

17 F. Bassanini - Government Reform in Italy17 Reorganization of Central Government 4 - from 18 to 12 Ministries 8 – Ministry of the Environment and Protection of the Territory - Ministry of Environment - Ministry of Public Works (part) - P.M.O. Servizi Tecnici Dept. 9 – Ministry of Infrastructure and Transport - Ministry of Public Works (part) - Ministry of Transport - P.M.O. Dept. for Urban Areas 12 - Ministry of Heritage and Culture 10 - Ministry of Employment, Health and Social Policies - Ministry of Employment and Social Security - Ministry of Health - P.M.O. Dept. of Social Affairs 11 - Ministry of Education, Universities and Research - Ministry of Education - Ministry of Universities and Scientific Research - Ministry of Heritage and Culture - P.M.O. Dept. of Sport - P.M.O. Dept. of Entertainment

18 F. Bassanini - Government Reform in Italy18 Civil Service Reform 1 - distinguishing Politics from Administration «Politicians are responsible for Policies»: «Politicians are responsible for Policies»: the Ministers define policies and strategies, assess results, appoint general directors but have no more direct involvement in administration «Public managers are responsible for Administration»: «Public managers are responsible for Administration»: public managers are given broader powers but also greater responsibilities, higher salaries but linked to results and performances

19 F. Bassanini - Government Reform in Italy19 Civil Service Reform 2 - the privatization of Civil Service Civil law for civil servants Civil law for civil servants public administration has the same powers as private sector employers Jurisdiction for civil service disputes Jurisdiction for civil service disputes since 1998 has been moved from the Administrative to the Civil Courts

20 F. Bassanini - Government Reform in Italy20 Civil Service Reform 3 - the contractualization of Civil Service Labor Contracts: Labor Contracts: collective bargaining (at national and local levels) replaced the law in determining employment conditions, salaries and tasks. The integrative negotiation promoting efficiency and professionalism through individual integrative contracts «A.R.A.N.» «A.R.A.N.» an Agency created to represent the State in labor negotiations in place of the Minister (but under Governments guidelines) Reform of labor representation Reform of labor representation for each public sector (Ministries, Education, Health …) bargaining with the State is allowed only to those Unions having more than 5% of the consensus in that sector

21 F. Bassanini - Government Reform in Italy21 A performance-oriented public administration 1 - the new approach Before: a formal/juridical approach to government: Before: a formal/juridical approach to government: compliance with laws and procedures without regard to quality and results Now: a consumer-oriented approach Now: a consumer-oriented approach quality service and customer satisfaction new performance control complementing traditional legal control public service charters promoting professional growth: a special training program Public administration close to citizens and business: Public administration close to citizens and business: favors the allocation of investment capital acquires relevance beyond the national borders partially sheds its authoritative nature

22 F. Bassanini - Government Reform in Italy22 A performance-oriented public administration 2 - the new public management An interministerial body of public managers (few exceptions). Access by concours An interministerial body of public managers (few exceptions). Access by concours ( no more than 5% of managers may be chosen from outside the Civil Service for a fixed term) Individual contracts (fixed term: 2-7 years) determine assignment, duties and salaries Individual contracts (fixed term: 2-7 years) determine assignment, duties and salaries Managers salaries vary depending on responsibilities and performances Managers salaries vary depending on responsibilities and performances

23 F. Bassanini - Government Reform in Italy23 The new public budgeting 1 - f rom financial to economic budget The new public budgeting 1 - f rom financial to economic budget Before: a segmented spending model with more than expenditure units Before: a segmented spending model with more than expenditure units Now: about basic budget units, matching each Ministrys target and responsibility Now: about basic budget units, matching each Ministrys target and responsibility Only one administrative office responsible for each basic unit Only one administrative office responsible for each basic unit New economic budget showing the link between the use of resources and achievements New economic budget showing the link between the use of resources and achievements

24 F. Bassanini - Government Reform in Italy24 The new public budgeting 2 - new spending procedures Drawing up the budget: no longer the traditional criteria of incremental spending Drawing up the budget: no longer the traditional criteria of incremental spending An effective cost analysis to back the annual financing law and the spending legislation An effective cost analysis to back the annual financing law and the spending legislation More effective constraints on Government expenditure bills and parliamentary amendments More effective constraints on Government expenditure bills and parliamentary amendments An electronic mandate An electronic mandate Towards a permanent electronic market for public purchases Towards a permanent electronic market for public purchases

25 F. Bassanini - Government Reform in Italy25 A transparent and comprehensible Government Since 1990 Administrative Procedure Law n. 241: access to administrative acts is the rule, secrecy the exception Since 1990 Administrative Procedure Law n. 241: access to administrative acts is the rule, secrecy the exception A «Style Manual» to simplify administrative jargon: A «Style Manual» to simplify administrative jargon: a practical tool for employees involved in written communication proposals for the standardization and simplification of the most common official forms

26 F. Bassanini - Government Reform in Italy26 e-Government IT: the best resource for a leap forward in quality change IT: the best resource for a leap forward in quality change An action plan for the electronic government An action plan for the electronic government Electronic signature Electronic signature Electronic management of administrative documents, procedures and archives Electronic management of administrative documents, procedures and archives Electronic ID card Electronic ID card A Single Administrative Network A Single Administrative Network The Unique Portal: a single gateway for public administrations The Unique Portal: a single gateway for public administrations Towards electronic public procurements Towards electronic public procurements

27 F. Bassanini - Government Reform in Italy27 First Achievements - 1 Reduction of deficit and public debt Reduction of deficit and public debt Downsizing of the Government Downsizing of the Government Increased efficiency and effectiveness Increased efficiency and effectiveness Reduction of red tape and certificates Reduction of red tape and certificates Representation and transparency in labor negotiation Representation and transparency in labor negotiation

28 F. Bassanini - Government Reform in Italy28 First Achievements - 2 public personnel cost (% of GDP) Source: OECD and Italy DPEF

29 F. Bassanini - Government Reform in Italy29 First Achievements - 3 public deficit (% of GDP) Source: ISTAT and Italy DPEF

30 F. Bassanini - Government Reform in Italy30 First Achievements - 4 public debt (% of GDP) Source: ISTAT and Italy DPEF

31 F. Bassanini - Government Reform in Italy31 First Achievements - 5 primary expenditure in Italy and EU (% of GDP) Source: ISTAT and European Commission

32 F. Bassanini - Government Reform in Italy32 First Achievements – 6 liberalizations and privatizations Liberalization. Three examples: Liberalization. Three examples: 110 fixed telecommunication licenses and 86 operators instead of Telecom Italia monopoly 110 fixed telecommunication licenses and 86 operators instead of Telecom Italia monopoly unbundling of local loop from end 2000 unbundling of local loop from end 2000 ENEL will control less than 50% of electricity market from 2003 ENEL will control less than 50% of electricity market from 2003 Privatization of public utilities: ENI, BNL, INA, ENEL, Telecom, Alitalia, Autostrade … Privatization of public utilities: ENI, BNL, INA, ENEL, Telecom, Alitalia, Autostrade … world largest privatization program (total revenue up to end 1999: approx. 83 million US Dollars)

33 F. Bassanini - Government Reform in Italy33 First Achievements - 7 Revenues from privatizations in OECD countries ( )

34 F. Bassanini - Government Reform in Italy34 The privatization program has contributed to foster the growth of the Italian equity market First Achievements – 8 total stock mkt cap/GDP Source: Ministry of the treasury

35 F. Bassanini - Government Reform in Italy35 First Achievements - 9 «Electronic Revenue Service»: 100% income tax returns (30 million/year) are filed and reviewed electronically

36 F. Bassanini - Government Reform in Italy36 First Achievements - 10 # of certificates issued per year Source: Dipartimento funzione pubblica

37 F. Bassanini - Government Reform in Italy37 First Achievements - 11 # of certified signatures issued per year Source: Dipartimento funzione pubblica

38 F. Bassanini - Government Reform in Italy38 First Achievements - 12 decrease of annual costs (in Italian liras) for certificates and certified signatures Source: Dipartimento funzione pubblica

39 F. Bassanini - Government Reform in Italy39 The Future of Reform The crucial phase of implementation the Reform is almost achieved in its laws and decrees, but laws alone cannot change citizens lives

40 F. Bassanini - Government Reform in Italy40 The Future of Reform Changing the culture Acquiring and disseminating new approaches: to technological and organizational innovation to technological and organizational innovation to simplification (releasing unnecessary administrative burdens) to simplification (releasing unnecessary administrative burdens) to quality of service and performance to quality of service and performance to citizen-user satisfaction to citizen-user satisfaction to rewarding professionalism and merit to rewarding professionalism and merit to promoting, encouraging and energizing citizens and business to promoting, encouraging and energizing citizens and business

41 F. Bassanini - Government Reform in Italy41 The Future of Reform Communication disseminating and sharing information to explain citizens their new rights

42 F. Bassanini - Government Reform in Italy42 The Future of Reform Investing on Public Administration in training, to improve knowledge and awareness of the main interpreters of the Reform in training, to improve knowledge and awareness of the main interpreters of the Reform in IT, to exploit the enormous opportunities of digital revolution in IT, to exploit the enormous opportunities of digital revolution in financial incentives, to promote quality of services and professional growth in financial incentives, to promote quality of services and professional growth

43 F. Bassanini - Government Reform in Italy43 The Future of Reform The «Maastricht approach» EURO example: Italy is a country capable of finding hidden human resources to face the most difficult tasks


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