In most countries:• Key institutions are in ferment

• Public institutions must meet new expectations/needs or lose public trust

• Public sector reform is getting higher on the political agenda

• But many important changes happen invisibly and unintentionally

• And despite reforms, trust declines

Which role of the citizen needs most attention?

• As “owner of government? (voter, taxpayer, member of society with rights enshrined in the constitution)

• As “subject”? (protected by – and from – coercive power of the state)

• As «customer »? – recipient of public services

Diagnosis: Most needed – Coherence or Adaptation?

• Government – like all institutions – face two fundamental (and conflicting) challenges

Maintaining collectivity and stability Adapting to changing circumstances

Does a government need:

• Stronger Collectivity? (eg. Policy co-ordination, budget stability, legal compliance, impartiality, protections against vested interests, management control, uniform civil service system, ...)

• or More Adaptivity? (eg. Performance, competition, differentiated structures, tailored services/incentives, risk-taking, ...)

Levers of Change

• Civil service system• Budget & financial management• Accountability and control systems• Openness and transparency• Role of central control bodies• Machinery of government (incl. distributed

governance arrangements)• Use of non-government service providers

And Modernisation can be a Charade

• Gap between rules and behaviour

• The difficulty of culture change

• The difficulty of measurement

• Attractions of rhetoric and initiatives

• The avoidance of hard choices

Successful Reform Strategies

• Are calibrated to specific risks and dynamics of the national system

• Focus on desired cultural change• Mobilise all levers on behaviour – formal

and informal• Have persistent and committed

leadership at all levels

Challenges for the Future

0 2 4 6 8 10 12 14 16 18

Improvement of budget system

Re-organisation to improve efficiency

Give effectiveness to formal innovations

Managing transition periods

Managing older workers

Recruitment and retention of highly-qualified cs

Culture, learning and development

Make public service more actractive

PM development and its linkage with pay and other HRM systems

Career development

Mobility

Leadership and Managers

Decentralisation and devolution

Equality Opportunity issues

Harmonization between public and private systrems

Improve work conditions and quality of life of cs

OECD TRENDS

• Affordability remains a key issue for any government

• Governments under pressure to be adaptive

• Focus on strategy, collaborative action, risk management, societal impact

• Attention to whole of government, governance and public trust

Diagnosis for Iceland?

• Small with vulnerable economy• Mobile talent

• Relatively dependent on maintaining good international reputation

• Citizen as Owner is key concern• Key :ADAPTIVITY AND OPTIONS

But Iceland

• Has strong social cohesion

• Capacity for strong collective action

• A memory of the importance of good economic and fiscal policy

• Big change needs active leadership at all levels-not technical matter

Index of Degree to which C.S. System is Closed

Australia

FranceCzech republic

Ireland

Korea

Sweden

Denmark

Finland

Spain

J apan

Luxembourg

AustriaGreece

Uk

P oland

Canada

Iceland

Usa

Switzerland

Norway

Hungary

BelgiumMexico

New zealand

Slovak republic

P ortugalItaly

AV

Q1

Q3

Germany

Chile

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Index of Degree to which C.S. System is Closed

10%16%

21%22%

26%26%27%27%

28%29%29%

35%36%

37%37%

37%37%

38%42%

44%50%

52%

56%57%

62%64%

69%74%

78%

0% 10% 20% 30% 40% 50% 60% 70% 80%

KoreaJapanSpain

FranceCzech republic

BelgiumMex ico

ItalyPortugal

Lux embourgPolandAustriaIreland

DenmarkGermany

Norw ayGreece

ChileFinland

UsaAustraliaHungary

New zealandSlov ak

CanadaSw itzerland

UkIceland

Sw eden

Context for Performance MeasurementDifferent Kinds of Problem

Management

Control

Informed Policy

Transparency/Accountability/External Confidence

Main Influences on Organisational Behaviour

Markets Low complexity

Contracts

Rules

Clans High Complexity

Public Service Models

Rules

Compliance

Professional Behaviourdominated by informal

influences

Int. and Ext.Resource Controls

Rule Bound Bureaucracy The Clan

Ramanathan’s Model

Costs

Inputs

Process

Outputs

Outcome Indicators

B/C

Managing Government Performance4 levers

Leadership & Vision

Strategic Adaptation

BoundaryRiding

DiagnosticInformation

Strengths and weaknesses of control regimes

Strengths WeaknessesGood for situations

with…

Input

Easy and affordable Strengthens

compliance

Does not supportefficiency

Can be inflexible Short term

…low confidenceand variablecompetence

Out-put

Facilitates efficiency Facilitates control of

aggregateexpenditure

Accountability

Can distort focus Measurement

problems Costs Information overload

…confidence, soundaccounting andprofessionalism

Out-come

Facilitates re-allocation

Support policyformulation and co-ordination

Long term

Measurementproblems

Accountabilityproblems

Costs Information overload

… the above anddedicated politicians

Approaches to taking Account of Outcomes

Outcome oriented culture Professionalism Internal Evaluation Systems Comprehensive Internal Auditing External VFM Performance-Oriented Budgeting and

Management Systems Legislated Disclosure

More information:

• www.oecd.org/puma• www.oecd.org/puma/budget/• www.oecd.org/puma/hrm/