The Future of Public Services: International Trends Rolf Alter Director Public Governance and Territorial Development 1

A. PUBLIC ADMINISTRATION REFORM: THE OECD CONTEXT 2

New challenges for governments Enormous expectations: Recovery, competitiveness, job creation, fiscal stability Diverse pressures: Scarce resources More vocal and demanding civil society Reduced trust and confidence in public authorities A decision-making deficit The degree of pressure varies across OECD, but the main challenges seem to be common to all 3

Key elements of the OECD response 1. New Approaches to Economic Challenges (NAEC) Managing better the trade-offs and complementarities between policy drivers Harnessing the potential of stronger institutions and effective governance to address long-term challenges 2. Strengthening Citizens’ Trust in Government Problem of low trust across most OECD countries Now recognised as an obstacle to policy success Building trust in institutions and engaging with citizens in public policy design now a priority Key theme for the OECD 2013 Ministerial meeting 4

3. Focusing on a Strategic State Approach Clear strategic vision Strong centre of government to steer and implement strategies and public policies Integrity and transparency Motivated workforce and delivery capacity Evidence-based policy making Participation of citizens in the development and implementation of public policies …effective policies depend on effective implementation – focus on the “how” not only the “what” 5

B. A CHALLENGING CONTEXT FOR ICELAND’S POLICYMAKERS 6

The economy is recovering but fiscal space remains very limited 7 Source: OECD (2012), Restoring Public Finances, 2012 Update, OECD Publishing Buoyant growth in 2011/12 is projected to continue in 2013 Considerable fiscal consolidation accomplished, and more is planned Planned budget law should provide a sound medium-term framework But fiscal space remains very limited Consolidation requirement to attain 60% public debt ratio

At the same time, government expenditures rose sharply because of the crisis As with many other countries, additional savings are becoming harder to find Source: OECD (2011), Government at a Glance 2011, OECD Publishing 8 General government expenditure as % of GDP (includes central and local governments as well as social security institutions)

And trust in government has been hit hard Policymakers are recognising that trust is a prerequisite for policy success Source: OECD Social and Welfare statistics (Gallup World Poll) 9

C. STRENGTHENING THE PUBLIC ADMINISTRATION Priorities in OECD Countries 10

The priorities for government seem clear enough… Strengthen strategic decision-making capacity at the centre (risk, vision, evidence, evaluation) Follow through on fiscal commitments Open up to users and civil society to drive innovative solutions Reach out to and work better with the local level Partner with private sector providers But scope for experimentation is limited, no time for trial and error, culture of evaluation lacking, motivation may be low…

Maintaining a quality public service (1): Should public service values remain the guiding principle? Source: OECD Government at a Glance 2009

Maintaining a quality public service (2): Dealing with an ageing public workforce 13 An ageing public workforce can entail a significant loss of organizational knowledge and experience as civil servants retire. It also provides an opportunity to reallocate resources to priorities and critical areas if effective performance management is in place. Source: OECD (2011), Government at a Glance 2011, OECD Publishing

Maintaining a quality public service (3): Strategic planning in HRM 14 Strategic HRM help scale up investment in the public workforce by aligning incentives with performance. It can increase efficiency, responsiveness and quality of service delivery. Source: OECD (2011), Government at a Glance 2011, OECD Publishing

Maintaining a quality public service (4) : Gender balance 15 A key concern for all OECD governments Iceland is well positioned overall, but women in senior positions are less common

Maintaining a quality public service (5): Integrating technology 16 An area in which Iceland is a leader among OECD countries Strong vulture of using technology to engage with citizens A key asset at a time of pressure on the relationship between citizens and government

Trust stands out as a key challenge for government and business alike –Both were identified as at fault in the crisis –Both need to restore tarnished image –Both under increased scrutiny No room for “fuzzy” interpretation of rules, behind closed doors decision-making…particularly where the public and private sectors meet (procurement, lobbying, post-public employment…) Policy needs to be based on good data (on security, justice, rule of law – often inadequate) Good legislation is accountable, evidence-based, transparent and participative But implementation is the key (compliance, enforcement, complaint procedures…) Maintaining a quality public service (6): Transparency and conflict of interest

Conflict of interest 18 Level of disclosure of private interests of public officials and public availability of disclosed information in three branches of government Composite indicator (2012)

Key messages (1) A better public administration can contribute to growth and well being by... Effectively steering development and implementation of public policies –Enhancing leadership from the centre Aligning incentives and quality of public service delivery –Investing in the public workforce Aligning public policy objectives and resources –Enhancing strategic management of resources and monitoring & evaluation Regaining citizen’s trust –Drawing inspiration from citizens for the development and implementation of public policies 19

Key messages (2) The OECD can support this effort Drawing on NAEC, Trust and Strategic State Approach work Comparative perspective –Government at a Glance Connecting to innovative experiences across the OECD community –Observatory of Public Sector Innovation –Peer reviews Moving towards a long-term partnership –Strategic evaluation study to provide an initial diagnostic 20

THANK YOU! 21