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ISSN 1648-2603 (print)
ISSN 2029-2872 (online)
MYKOLAS ROMERIS UNIVERSITY
KAUNAS UNIVERSITY OF TECHNOLOGY
PUBLIC POLICY AND ADMINISTRATION
No. 30
Vilnius * Publishing Center, Mykolas Romeris University * 2009
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Editors: Prof. Dr. Habil. Vladislavas Domarkas, Kaunas University of Technology Assoc. Prof. Dr. Tadas Sudnickas, Mykolas Romeris University
Editorial Board Prof. PhD Erik Aalbek, Aalborg University, Denmark Prof. PhD Maria Aristiqueta, University of South Florida, USA Prof. PhD Larry Bakken, Hamline University, USA Prof. PhD Howard Balanoff, Southwest Texas State University, USA Prof. Dr. Viktorija Barauskien, Kaunas University of Technology Prof. Dr. Eugenijus Chlivickas, Lithuanian Association of Public Administration
Trainers Prof. Dr. Habil. Eduardas Janauskas, The General Jonas emaitis Military Academy
of Lithuania Prof. Dr. Algis Krupaviius, Kaunas University of Technology Prof. Dr. Alan Lawton, University of Hull, United Kingdom Prof. Dr. Habil. Borisas Melnikas, Vilnius Gediminas Technical University Prof. Dr. Habil. Vladimiras Obrazcovas, Mykolas Romeris University Prof. Dr. Jolanta Palidauskait, Kaunas University of Technology Prof. Dr. Rimantas Petrauskas, Mykolas Romeris University Prof. Dr. Alvydas Pumputis, Mykolas Romeris University Prof. Dr. Habil. Stasys Pukorius, Mykolas Romeris University Prof. Dr. Alvydas Raipa, Kaunas University of Technology Assoc. Prof. Dr. Vainius Smalskys, Mykolas Romeris University Dr. Jurgita iugdinien, Kaunas University of Technology Assoc. Prof. Dr. Rasa naptien, Kaunas University of Technology Prof. Dr. Norbert Thom, Bern University, Switzerland Prof. Dr. Theo Toonen, Leiden University, Netherlands Prof. Dr. Habil. Edvins Vanags, University of Latvia, Latvia Prof. Dr. Michiel S. de Vries, University of Nijmegen, The Netherlands
Editor of this issue Prof. Dr. Habil. Vladislavas Domarkas
Executive secretary Assoc. Prof. Dr. Aleksandras Patapas
Internet addresses: http://www.ktu.lt/vpa http://www.mruni.eu/leidyba.html
Editorial offices: Department of Public Administration Department of Public Administration Faculty of Public Administration Faculty of Social Sciences Mykolas Romeris University Kaunas University of Technology Ateities str. 20K. Donelaiio str. 20 08303 Vilnius 44239 Kaunas, E-mail: [email protected] E-mail: [email protected]
Published since 2002
Mykolas Romeris University, 2009 Kaunas University of Technology, 2009
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ISSN 16482603 (print) VIEOJI POLITIKA IR ADMINISTRAVIMAS ISSN 2029-2872 (online) PUBLIC POLICY AND ADMINISTRATION 2009, Nr. 30
CONTENTS
Leading Article Still the Century of Bureaucracy?: The Roles of Public
Servants.
B. Guy PETERS
7
Comparative
Analysis of
Public Policy
and
Administrative
Practice
The Directions and Tendencies of Changes in Modern
Public Governance
Alvydas RAIPA
Characteristics of the Modern Swedish Model of
Economic and Social Development...
Yuri KRIVOROTKO
The Roles of a Research Administrator at a University
Loreta TAUGINIEN
22
33
45
Civil Service Is there Space for Hybrid Management Models of Senior
Civil Service across Political-Administrative Systems?...
David FERRAZ
The Managerial Competencies of Civil Servants in
Lithuania
Egl BUTKEVIIENEgl VAIDELYT
57
68
Knowledge
Society
Two Dysfunctions in High-Tech Research and
Development..
Kazunobu OYAMA
Measuring Knowledge Economy: Towards an
Institutional Approach... ilvinas IDONIS
Aspects of Decentralization in Management Reforms of
the Education System in Lithuania
Jolanta URBANOVI
82
92
102
Non-
Governmental
Sector
The Non-Governmental Sector and Democracy
Empirical Reflections and Findings in the Baltic States:
Results of Meta-Analysis (Part I)..
Saul MAIUKAIT-VINIEN
114
Conference
Review
The Implementation of Managerial (Administrative)
Concepts in Practice..
Saulius NEFAS
129
Information Notes for Contributors..
Subscription form..
133
137
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ISSN 16482603 (print) VIEOJI POLITIKA IR ADMINISTRAVIMAS ISSN 2029-2872 (online) PUBLIC POLICY AND ADMINISTRATION 2009, Nr. 30, p. 721
B. Guy Peters Pitsburgo universiteto Politologijos katedros profesorius. University of Pittsburgh, De-
partment of Political Science, Professor.
el. patas / e-mail: [email protected]
Straipsnis teiktas redakcijai 2009 m. rugsjo mn.; recenzuotas; parengtas spausdinti 2009 m. gruodio
mn.
STILL THE CENTURY OF BUREAUCRACY?:
THE ROLES OF PUBLIC SERVANTS
B. Guy Peters
University of Pittsburgh
The civil service, and public employment more generally, is often seen as stable, predictable, and frankly rather boring. The public bureaucrat has been, and contin-ues to be, an object of scorn as well as an easy target for humorists, and the task of implementing public policy continues to be seen as largely the same as it has been for decades or even centuries. Despite that apparent predictability, the job of the civil servant, as well as much of the environment within which he or she functions, has been transforming rapidly and the public sector is nothing like it was several decades ago. Intellectually, the consideration of public administration has also re-mained rather stable. Despite numerous changes in the public sector Max Webers conceptions of bureaucracy still constitute the starting point for most discussions (Derlien, 1999).
Keywords: public servant, bureaucrat, manager, governance Raktaodiai: valstybs tarnautojas, biurokratas, vadybininkas, vieasis valdy-
mas.
The above having been said, the changes within the public sector have not been
consistent or uniform, and indeed some approaches to change often have been inter-
nally contradictory. Just as many aspects of the public sector have been largely im-
mutable, then paradoxically change has been ubiquitous in government. Change and
continuity have existed side by side for most of the history of governing. Therefore,
we need to better understand what has happened with the world of the civil servant
and with the job that these individuals now perform.
One premise of this article is that the post-modernizing of the public sector has
been associated with decline in the certainties that we associate with the modern, bu-
reaucratic system. If bureaucracy has declined as a paradigm for the public sector,
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
8
however, it has not been replaced with any single model that can provide descriptive
and prescriptive certainty (see Peters, 2001; Frederickson, 2007). Neither scholars at-
tempting to capture the reality of contemporary public administration, nor politicians
and managers attempting to make the system work on a day to day basis have any
simple model of what the contemporary reality is. Many analysts are consequently
forced to examine some aspects of governing and ignore others or to develop ad hoc conceptions and prescriptions.
This loss of certainty about managing in the public sector is very unsatisfying for
many academics and perhaps for more practitioners, but as well as reflecting con-
temporary agnosticismor the presence perhaps of numerous heresies when seen
from the old orthodoxydoes capture the struggle to find better ways of governing.
To some extent, however, even the definition of better is contested about govern-
ing, and the multiple goals that have always been present in public administration
have become all the more evident (Rothstein and Toerell, 2008). Thus, the contem-
porary period continues to juggle values of efficiency, democracy, equity probity and
accountability (to name but a limited though important set) and to understand that
choosing any one to maximize will tend to create problems for at least some of the
others.
In this essay I will attempt to lay out at least five contending roles of the current
public administrator and discuss how they describe the contemporary reality of pub-
lic administration, as well as the extent to which they coexist. Any individual admin-
istrator may therefore be required to make some choices for him- or herself, and may
have to select different values at different times. Likewise, politicians may be forced
to choose one or more value to emphasize as they attempt to govern. Having these
multiple conceptions does not have to produce chaos and indeed one of the important
activities in contemporary governance may be clarifying the approaches being taken
more explicitly and with that clarifying the values that any particular system of gov-
ernance is attempting to maximize. The history of governance often involved mask-
ing those preferences but now they can be addressed more directly and the political
choices involved can also be clarified.
The roles of public servants As already noted, the role played by public employees in contemporary govern-
ance is not as clear as it once was. While the clarity and simplicity of old-fashioned
government could clearly be over-stated, there was some sense of how the system
would be managed and what the role of the civil servant in that system was (Walsh
and Stewart, 1994). That perceived (and real) role for the civil service differed to
some extent across countries (Peters, 2009) but at the core, there was some common
role for public servants as well as substantial predictability. That predictability was
especially evident for the lower levels of public organizations and their tasks of rou-
tine implementation seemed quite stable and often numbingly predictable.
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
9
As already noted, in Europe much of that traditional model of the public bu-
reaucracy was based on the work of Max Weber. The Weberian model is now com-
monly reviled in theory and practice, but we must remember that much of the legal-
ism and formality within the model was designed to ensure equality of services, and
political neutrality among public servants. Further, the emphasis on files and rules
also ensured predictability for both employees and for clients, something far different
from the extreme versions of discretion that characterized pre-bureaucratic adminis-
trative systems.
The Weberian model continues to serve as the intellectual foundation for think-
ing about governing, and as the model against which most attempts to reform are di-
rected. Indeed, the neo-Weberian model of the State has become important as a
means of understanding what is happening with government after the reforms of the
New Public Management have run their course (Bouckaert and Pollitt, 2004;
Raanma-Liiv, 2009). The basic logic of the Neo-Weberian State is to retain many of
the efficiency values associated with the New Public Management while recapturing
some of the emphasis on probity and accountability that were more central to tradi-
tional models of the public sector.
In the United States, on the other hand, the Wilsonian model, the separation of
roles between the political and the bureaucratic sectors, was applied. Wilsons model
was less concerned with the internal management of public organizations than it was
with the role of bureaucracy in a democratic political system. Wilson did, however,
also reflect the scientific management values of his era. Although he accepted the le-
gitimate dominance of political actors over public policy, he also stressed the superi-
ority of administration as a science, while politics was merely an art. Thus, even then
public administrators were in the somewhat ambiguous position of having to follow
orders, even if they considered themselves more capable than their nominal superiors
in the organizations.
The most remarkable change in the role of the public service and for governing
in general is that there is much less predictability and there are often competing de-
mands placed upon people at all stages of governingfrom ministers through to the
lowest level clerks. This reduced predictability represents the spread of a number of
cultural and intellectual challenges to the role of the public sector, as well changes in
the real policy challenges being confronted by the public sector. These changes mean
that individual public servants may be in a position to define their own role, or have
such a definition thrust upon them.
Choice is never easy, but is confounded in this instance because there are several
roles that are available to the civil servant, and these all, to some extent, need to be
played at different times by the same individuals.1 Thus, one of the defining features
of the public servant in an era of post-modernity is that he or she must constantly be
moving among these different roles. Certainly their position within an organizational
1 The roles identified by Aberbach, Putnam and Rockman (1980) in their seminal study tended to be more fixed for an individual at any one time, although that question did not appear to be addressed
specifically.
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
10
structure or their specific policy area may affect the extent of change, but almost all
public servants will wear several hats in the course of a week or a day, or even an
hour. The need to make these choices appropriately also increases the chance of error
and of some loss of job satisfaction for the individual.2
It is also important to remember that most of the roles mentioned below are not
new.3 These roles have been, to some extent, expected of the public servant for some
time. What is different, however, is that in the modern bureaucratic age the major-
ity of possible roles were subordinate to the dominant role of being a proper bureau-
crat. The public servant could always resort to the law and to enforcing formal stan-
dards within the organization, and doing so was rarely incorrect. In what we are de-
scribing as a post-modern administration, that role may still be available but it is less
reliable as a means of producing good results for the individual, the organization, or
government as a whole. In some cases the bureaucratic response may be effective,
while in many others the public will no longer accept the legalism. Even many mem-
bers of the public sector itself will not want to rely on it.
Back to the futurethe bureaucrat One choice available to contemporary bureaucrats that is discussed less often
than others is to return to bureaucratic styles of governing. While many observers in
and out of government would consider this a retrograde step, there has been an im-
portant resurgence in thinking about the role of more formalized styles of managing
within government. Reforms during the past several decades have produced a num-
ber of improvements in the efficiency and effectiveness of the public sector, and the
market-based logic of this approach has been widely accepted. Although successful
in some ways, this approach to managing the public sector has a number of important
dysfunctions for governing (see Christensen and Laegreid, 2001). Further, this ap-
proach challenges a number of understandings about what good administration in the
public sector should be, especially the importance of emphasizing the public in pub-
lic administration.4
The logic of returning to at least some aspects of bureaucracy in the public sec-
tor is that the probity and predictability of bureaucracy are no less important in the
contemporary public sector than they have been in the past (Olsen, 2006; Du Gay,
2005). The public often denigrates bureaucracy but at the same time demands to be
treated fairly and equally by the public sector. Most of the reforms that have dimin-
ished the formality of bureaucracy have also tended to produce greater variability in
2 On the one hand having a more diverse job may increase satisfaction, but on the other , the need to make complex choices may produce some frustration and indecision.
3 The most probable exception to that statement is the role as Democrat. That said, the egalitarian components, even within Webers model, can be conceptualized as to some extent democratic.
4 This is now commonly discussed in terms of public value and the reassertion of the public interest (Moore, 1995).
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
11
the services provided to citizens. Choice is good, provided that there is some cer-
tainty for adequate and equitable services.
The creation, or recreation, of bureaucratic forms of governing is especially im-
portant for transitional regimes, whether in third world countries, or in the still con-
solidating democracies of Central and Eastern Europe (Verheijen, 2009). As these
political systems attempt to institutionalize new styles of governing after decades of
authoritarian rule of various types, there is a need to create formal, legal styles of
governing prior to considering any other styles of reform. The New Public Manage-
ment and other contemporary formats for governing tend to assume the presence of
an accepted ethos that will guide the behavior of public servants. Without that ethos,
the emphasis on managerial freedom within contemporary public management would
significantly reduce accountability and control.
The Neo-Weberian model is therefore particularly apt for transitional govern-
ments. It is also important for administrative systems that have been undergoing the
rapid changes already mentioned. In many ways, this model of administration re-
flects some of the ambiguity that we are discussing with reference to individual pub-
lic administrators. The Neo-Weberian State is, in essence, a hybrid between the
managerial and hollowed out state that had been created during the reform era, and
therefore may have the capacity to provide some improvements in efficiency as well
as probity. Likewise, the individual public servant will have to manifest that set of
skills.
The manager
A second role for the contemporary public administrator is that of a manager. As
noted above concerning the New Public Management (NPM), the most important
change in the public sector has been to emphasize the need for decisive and autono-
mous public management. NPM may not really be new, it is often not public, but it is
management. In this view of the public sector, the principal means of enhancing the
quality of services to the consumer (rather than citizen) is to improve the efficiency
of service delivery. By providing better services the managerial approach will also
reduce the total costs of government and thereby further enhance the legitimacy of
government.
Most of the discussion of NPM has been directed at the roles of senior public
managers, but some of the ideas associated with this movement have also affected
the lower levels of the public sector. For example, the idea of empowerment (Kerna-
ghan, 2008) has been central to some versions of NPM, and in this view it appears
that the lower level officials in government are also provided with greater power over
the policies they are delivering. Not only does the enhanced role for the lower eche-
lon employee make his or her job more interesting and more motivating, but the abil-
ity of these individuals to make more decisions should also improve the quality of the
services provided.
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
12
Although these ideas of empowering public employees have been to some extent
successful, they also generate important management problems. In particular, if all
the actors involved in the policy process believe that they are empowered, then no
one really is (Peters and Pierre, 2000). The managerial role, perhaps more than even
the bureaucratic role, involves the ability to provide direction to other actors. There-
fore, if the role is not clearly defined then the role becomes extremely difficult to im-
plement effectively and without conflict. The conflict from other empowered actors
must also be considered in light of continued assertions of the power to rule from po-
litical actors.
The role of manager is one that is likely to be most comfortable for public ser-
vants, especially for higher level public servants. These officials have often ex-
pressed frustration when their roles are limited either politically or through formal
rules, e.g., about personnel management. Acceptance of the role of manager, how-
ever, may make accepting other roles, e.g., that of democrat (see below) more diffi-
cult.
The policy-maker
Public servants have always had some role in making policy, but that role does
appear to be changing. The traditional policy role for the public service was to serve
as advisors for political leaders. Although this role clearly appeared subordinate to
the position of the political leader, it was often crucial in the policy-making process.
Politicians are rarely selected for their knowledge of policy issues so they may well
be dependent upon their civil servants for making good policy. This policy focus
from public servants is especially apparent when organizations in the public sector
have a clear commitment to a particular policy perspective.
Although the emphasis on policy-roles played by public servants is usually at the
upper levels of the system, the lower echelons also play these roles. For example,
Page and Jenkins (2005) have pointed out that middle-level bureaucrats have a very
significant role in shaping policy, and that they can do so to a great extent independ-
ent of the influence of their nominal political masters. Further, the lowest level of the
public bureaucracy can also have a very direct impact on policy; they must make
numerous decisions about individual clients and the summation of those decisions
help to define the real nature of public policies. The logic of the bureaucratic role,
and of Weberian bureaucracy, is largely to deny the exercise of discretion, although
it is abundantly clear that street-level bureaucrats do have substantial discretion and
do exercise it.
The policy-making role was generally seen as the major alternative to the clas-
sic bureaucratic role of implementer and manager of a staff. In that conception, the
policy tasks were primarily giving advice to the political masters. This version of the
policy making public servant remained (at least in principle) subservient to the politi-
cal powers. As reforms of public administration have proceeded, however, the policy
roles appear to have expanded to necessitate more direct involvement in policy mak-
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
13
ing. In particular, part of the logic of the New Public Management has been to em-
power managers to have more of a say in policy and thereby to reduce the policy role
of the inexpert and often fractious political leaders.
The development of a more powerful policy role for public servants to some ex-
tent alters fundamentally the bargains made between public servants and their nomi-
nal political masters (Hood and Lodge, 2007). The anonymous, yet influential, public
servants have been replaced by public servants with greater powers but without the
job protections and security they once would have enjoyed. In many ways they have
become the unelected policy-makers that critics of the bureaucracy have frequently
accused them of being. This power, in turn, has produced more attempts on the part
of political leaders to control those officials, and to influence the selection process of
senior public officials.
The negotiator
The fourth possible role for the contemporary public servant follows rather natu-
rally on the role of being a policy-maker. The policy role has been a central feature
of the activities of the senior public service for some time, and represented the major
option for the classical public servants described by Aberbach, Putnam and Rockman
(1981). This role of negotiator may have been available for some time, but has be-
come one of the major activities of public servants more recently. This role reflects
the tendency of the public sector to provide fewer public services itself and to rely
more on the private sectormeaning both the market and social actorsto provide
those services.
Contemporary public policy delivery relies heavily on market actors, linked to
the public sector through contracts and partnerships. Even before the New Public
Management gained iconic status in some countries, a number of efforts were being
made to out-source various rather routine functions in the public sector. The interest
in using the market has only grown and now extends to much more than (relatively)
simple functions such as cleaning and rubbish collection. Partnerships and contracts
now involve almost the full range of public sector activities, and often include very
complex issues such as financing public works (Lonsdale, 2005) or providing social
services. These services are difficult enough to manage when in government, but are
all the more difficult when there must be a contract that specifies both the nature of
the product and the means of producing it.
The general ideological movement in the direction of contracts and partnerships
has been driven by political leaders, but most of the actual work of negotiating and
managing these relationships must be done by members of the public service. Not
only are they more likely to have the expertise to do this well, but they are also the
more enduring members of the public sector. Politicians may come and go, but the
public servants tend to remain. This is especially important for the negotiator role be-
cause most of the contracting in the public sector is in essence relational contracting
(Peters, 2002). Given that it is difficult to specify all the details for social services or
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
14
many other public programs, it is important to build strong relationships between the
providers of services and the public servants who supervise the contracts.
The negotiations of public servants are not confined to managing contracts with
market actors, but also extend to working with members of social networks who are
actively involved in policy and administration. These relationships with actors in the
private sector must be built on trust, more so than on relationships involving formal
contracts. A contract has more specific constraints on the behaviour of the parties in-
volved than does the membership of a social network, so the informality of the net-
works imposes greater demands on public servants for the ability to negotiate. The
role of the public servant in these relationships is more continuous and more innova-
tive than with contracts, so it permits a more active involvement in shaping policy
and forms of democratic involvement.
Again, it is crucial to note that members of the public service will be more im-
portant than politicians in defining these relationships with social actors. In the first
place, the networks often interact directly with relatively low levels of the public sec-
tor and therefore are more likely to encounter public servants than political leaders,
even at the local level. In addition, if these relationships for making and implement-
ing services are to be successful, they must endure. Therefore, public servants are on
average involved in the process much longer than politicians. Finally, the role defini-
tions of public servants are less likely to be threatened by the involvement of other
political actors in the process than are those of politicians, so they can provide
greater stability and a collective memory for governments.
The negotiator role for the public servant may be a means of encompassing sev-
eral of the other roles, especially those of manager and democrat. As the public ser-
vant negotiates with private sector actors, he or she has the opportunity to stress pub-
lic values and democratic control in contrast to the market values that have become
prevalent in many policy areas. Further, he or she is also capable of achieving man-
agement goals through negotiation with market and social actors.
The democrat
Finally, although this role might usually be seen as the antithesis of being a pub-
lic servant, the contemporary public servant is often called upon to play a significant
democratic role in his or her government. This emerging role for the public servant
reflects in part the declining efficacy of more traditional forms of democracy. In most
established democracies, fewer people are voting, and many fewer people are now
members of established political parties (Dalton and Wattenberg, 2000; Mair and van
Biezen, 2001). A great deal of political participation is now being channelled into
flash political parties, as well as into other less conventional forms of involvement
with the public sector.
While many of the principal instruments of political democracy have apparently
become weaker over the past several decades, there has been a shift toward using the
permanent public bureaucracy (here used in the generic sense) as a locus for public
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
15
participation. The use of networks of social actors mentioned above has been one
manifestation of that shift toward participation in the public bureaucracy, given that
these actors now influence the choices of policy and the manner of implementation.
In addition, the public appears to be more concerned with the provision of particular,
often local, public services rather than with broad issues of public policy.
This change in the nature of public participation to some extent reflects a con-
tinuing shift toward the output legitimation of public action, rather than producing
that legitimation through inputs into the political system (Peters, 2010; see also
Keane, 2009). The traditional model of democratic legitimation has been twofold: the
possibility for the public to vote reflected their choice of policy, and the retrospective
judgements of the public on the programs of sitting governments further provided
some legitimacy for public action.5 As political democracy has become less central to
processes of governing, this source of legitimation has also become less viable.
The alternative to conventional forms of legitimation is for the public sector to
legitimate itself through its policies and its performance. This shift, and the associ-
ated role for the public service, is manifested in a number of ways. In general, gov-
ernments have begun to emphasize their role as service providers rather than as po-
litical institutions that emphasize processes and deliberation. For example, one of the
central components of the New Public Management has been that government should
serve the customer rather than be concerned with the political process per se. This approach to governing, therefore, has explicitly transformed the public from citizens
to consumers of public services, and although this may enhance services, it tends to
denigrate the political role of citizens.
In a model of the State dependent upon output legitimation, the public service,
and perhaps especially the lower levels of the public service, becomes even more
crucial than in more conventional models of governing. The public service is in con-
tact with the public and is responsible for the actual delivery of the public services. It
is not only the quality of the services being provided that is important in these con-
tacts. The manner in which they treat their clients influence the way the public views
their government. For the average citizens, the policeman on the beat, the social
worker, or the postal clerk is the State, and how they are treated does matter. The
good news is that most studies find that citizens are treated well, but the bad news is
that this often does not transfer into a more positive opinion of the bureaucracy, or
the public sector in general.
The role of the democrat may not come naturally to many public servants, even
those not steeped in traditional bureaucratic ethics. The assumption in most political
systems is that politics and bureaucracy, and perhaps especially democratic politics,
are to some extent opposite approaches to governing. Bureaucracies are often por-
trayed as placing a barrier to the exercise of democracy, but given the problems of
contemporary representative institutions, bureaucracy may be an effective alterna-
tive. The underlying problem for playing this role is that citizens in many societies
5 For a classic statement of the difficulties of using elections for steering governance, see Rose (1974).
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
16
may not yet recognize the possibilities of influencing policy through the bureaucracy,
and may not send the role.6
Criteria for choice
While it is important to understand the different roles that may be available to
public administrators in the contemporary public sector, that is only the beginning for
gaining an understanding of the manner in which those public servants will behave
while carrying out their duties. The more difficult question is how they choose to
play one role or another, and when they make those choices. Although some indi-
viduals may opt for one of the roles for all or most of their working life, one impor-
tant aspect of the post-modern public servant is that they may be changing their
roles from time to time and attempting to adjust their behaviour to the multiple ex-
pectations about their performance.7
Some choices for the individual appear rather easy to make. When the public
servant must manage a network structure, or a contract, in order to deliver a service,
it is rather obvious that he or she must become a negotiator. Likewise, when called
upon to advise a minister on policy, he or she must put on a policy-making hat to do
the job well. A skilful public servant, as indeed would a skilful employee in a private
firm, will usually be able to find the right combination of skills and approaches to the
job in order to carry out the tasks appropriately and make their programs perform as
expected.
Not all choices are so clear for the contemporary public servant, and even those
that appear simple may not be. For example, while the public servant may think that
the negotiator role is most suitable when building and managing networks, the public
servant must remember that he or she also represents the public sector in these nego-
tiations. In the end, he or she may have to revert to playing a more legalistic, bureau-
cratic role in order to protect the public interest. As managerial market values have
permeated the public sector, maintaining the distinction between the public interest
and the interest of the participants may be more difficult, but it is important to re-
member that distinction. This point only emphasizes the extent to which the tradi-
tional bureaucratic model of governing remains viable, and at times necessary.
These difficulties reflect the extent to which conventional models of the public
sector have been eroded and no clear alternative has been institutionalized to replace
them. Although we have noted that in a number of ways restoring the Weberian bu-
reaucracy model may not have many benefits for society, this notion remains a con-
venient solution for the public employee, even if it is not always suited to the particu-
6 In role theory, the society, or the individuals with whom an individual interacts, transmits a role that the individual must perceive correctly. Of course, if the individual misperceives the role then his or
her behavior will be inappropriate. 7 One aspect of role theory is that there are a set of expectations about the behavior of an incumbent of
a position. Further, any individual may have to play a number of different roles and therefore must be
sufficiently flexible, and sufficiently astute, to adapt to the different expectations.
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
17
lar circumstances. Reliance on the rules of the organization and established practices
is, as it has always been, an important protection for public employees and may be-
come even more important once the circumstances of governing become more am-
biguous. What may yet be missing, however, is the service orientation that has be-
come more central to governing in the reformed public sector.
The external linkage functions that have become important for contemporary
public servants provide them a source of power within the organization. Therefore,
rather than adopting more defensive stances by relying on the rules of bureaucracy,
public servants can take more positive stances, using their roles as negotiators with
private sector actors. This gain in relative organizational power reflects the extent to
which contemporary public organizations depend upon their partnerships with exter-
nal actors to provide services, and as the liaison with those external actors, the rela-
tive position of the public servant is enhanced. Therefore, the ambitious public ser-
vant has an incentive to adopt that role to the furthest extent possible.
To some extent, playing the role of democrat provides public servants with some
of the same internal political advantages as are available to them outside the organi-
zation. This role involves the public servant looking outside his or her own organiza-
tion to serve broader political constituencies, and to promote what may be alternative
values and policies within the organization. Public servants have always been in po-
sitions that span the boundaries between the public and the private sectors, but em-
phasizing that role and its potential for democracy does serve as a means of comple-
menting existing democratic institutions. This is especially true when, as noted, some
of the traditional political institutions are now less effective in mobilizing public
support. It also functions as a means of promoting policies and values that are de-
rived from the connections with society.
The uses of ambiguity
Describing the position and the role of contemporary public servants as ambigu-
ous might be thought to describe a significant problem for these actors. To some ex-
tent that may be true, given that learning to be an effective public servant is now a
less clearly defined task than in the past, and that the public servant will have to
make more individual choices when carrying out their tasks in the public sector. This
more ambiguous world may not be the most preferred by more conventional bu-
reaucrats, who prefer an orderly and rule-defined existence that does not involve po-
tentially difficult interactions with clients.
Despite the inherent problems in ambiguity, there are also a number of advan-
tages (see Christensen and Rvik, 1999) for the contemporary public servant. The
most important of those advantages is that the latitude for action for the individual is
enhanced. One of the common complaints by public employees is that the formal
definitions of their tasks do not allow for innovation and for individual initiative.
While the reforms of the last twenty years have to some extent softened the stereo-
type of the position of the public servant, they have by no means done so entirely and
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B. Guy Peterts. Still the Century of Bureaucracy?: The Roles of Public Servants
18
public servants can only welcome more room for defining and redefining their own
positions within the processes of governing.
In addition, the more entrepreneurial among the public service can utilize the
ambiguity of roles to increase their powers relative to their nominal political masters.
The conventional definition of the role of the public servant has been rather con-
straining and has defined that role in non-political terms. The ambiguity of contem-
porary role definitions allows the individual public servant to do more to define their
own roles and to mobilize political support from outside the organization. This does
not mean that public servants necessarily are the power-seeking, utility-maximizing
actors they are sometimes assumed to be (see Niskanen, 1971), but it does mean that
they are not the political ciphers that others might have them be. Public servants have
ideas and they do have clients, and a more ambiguous definition of their place in the
public sector will enable them to exert more of an independent influence.
Finally, ambiguous roles enable the public servant to mix and match responses
to the needs of particular policy circumstances, and to provide more nuanced re-
sponses to those competing demands than would be possible with more strictly de-
fined roles. The more conventional, uniform conceptions of managing the public sec-
tor require rather predictable responses from public employees, but the post-modern
style of governing provides more options. The key point is indeed that governance is
no longer a simple, hierarchical activity but rather involves more complex interac-
tions between the public and private sectors (see Kooiman, 2003; Peters and Pierre,
2006), and among a number of organizations within the public sector itself. That
complexity, in turn, creates a need for individuals who have themselves greater flexi-
bility. With that flexibility must go a significant commitment to the integrity of the
policy process in order to manage the inherent complexity of governing.
Conclusion
The task of being a public administrator has never been an easy one. Even when
the role was more clearly defined, the necessity of coping with the complexity sur-
rounding most public programs presented a number of challenges to those public ser-
vants. The shift toward a less clearly defined understanding of the role of the public
administrator in contemporary society has to some extent made the life of the public
administrator more difficult. There is a much wider range of possible demands on the
public servant, and it is now impossible to rely on the familiar role of bureaucrat as
implementer of the law. The individual public servant to some extent has always
been responsible for making choices about their choices, but those choices now are
even more basic.
On the other hand, after the public sector has been transformed and de-
institutionalized, the working life of the public servant may be both more interesting
and more effective. Having the opportunity, or even the expectation, of playing mul-
tiple roles within the governing process allows public servants not only creativity but
also more capacity for solving problems. These opportunities may also enhance the
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 721
19
job satisfaction of public employees, given that they can define their own role, shape
their own careers and also have a more active role in shaping policy than traditional
models would allow them. They have lost numerous protections they may have en-
joyed in the past, but have been able to replace those with a greater degree of free-
dom.
This changing role for the public servant must also be understood in the context
of broader changes within the public sector. In particular, the decentering reforms of
the past several decades have created the need to restore some control over policy
arising in the centre of government. With that shift toward more power in the centre
of government has come the need to empower senior public servants to play a more
significant role in the process of linking the decentered processes to central political
control. The linkage function will employ a range of the role options mentioned
above, but perhaps most notablythe role of negotiator. The negotiations in this
context require the public servants to tread a very thin line between politics and ad-
ministration, and may also require them to be policy entrepreneurs in their own right.
The public servant has often been the object of scorn, but the role is being rein-
vigorated (albeit in a somewhat different guise) by contemporary political and ad-
ministrative change. Public servants may still not be the most popular figures for the
average member of the public, but they do have crucial roles to play in making the
contemporary state function. And it is indeed in part because they have those multi-
ple roles that they are becoming more important to the policy-making process. The
ability to provide a range of solutions for policy and administrative problems enables
these bureaucrats to be central actors in governing. We must be cognizant that the
governing process itself also changes as a result of these changing roles for the bu-
reaucrat, and even the notions of democracy will have to be considered in a different
light.
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Alvydas Raipa. iuolaikinio vieojo valdymo pokyi kryptys ir tendencijos
32
THE DIRECTIONS AND TENDENCIES OF CHANGES IN MODERN
PUBLIC GOVERNANCE
Alvydas Raipa
Summary
Public sector organizations carry out their activities in a constantly, incremen-
tally changing environment of global society.
In modern society, public sector organizations have been encouraged to change
their role from the provider of services to the monitoring of other organizations that
actually deliver those services. This is particularly true of local authorities who are
encouraged by central government to deliver services through the voluntary or pri-
vate sector. The evolution of New Public Management into new public governance
means that public sector managers are acquiring the role of monitoring and control
over other kinds of organizations and developing skills in managing contracts. Such
an arrangement is blurring the boundary between the public and other sectors, be-
tween policy and administration. A major feature of the reforms and changes in the
public sector is that we can see an evolution from new public management to new
public governance in the start of the twenty-first century.
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ISSN 16482603 (print) VIEOJI POLITIKA IR ADMINISTRAVIMAS ISSN 2029-2872 (online) PUBLIC POLICY AND ADMINISTRATION 2009, Nr. 30, p. 3344
Yuri Krivorotko Baltarusijos jurisprudencijos universitetas, Apskaitos analizs ir audito katedra,
docentas. The Belarus Institute of Jurisprudence, Department of Accounting, Analyses and Audit Assoc.
Prof.
el. patas / e-mail: [email protected]
Straipsnis teiktas redakcijai 2009 m. kovo mn.; recenzuotas; parengtas spausdinti 2009 m. gruodio
mn.
CHARACTERISTICS OF THE MODERN SWEDISH MODEL
OF ECONOMIC AND SOCIAL DEVELOPMENT1
Yuri Krivorotko
The Belarus Institute of Jurisprudence
3 Korolja str., 220004, Minsk, Belarus
This paper deals with features of the Swedish model of economic and social development from the perspective of Belarus. The paper deals with issues concerning the evolution of the Swedish social-economic model, with emphasis on the latest changes and corrections to the Swedish model. The paper also examines tendencies in the public sector and challenges in local government, as well as issues of foreign trade, migration of the national and foreign capital, Swedish course of European integration and cooperation in relation to post-Soviet countries.
Keywords: Swedish social-economic model, economic development, export,
import, local government, central government, municipalities, counties, European integration, single currency, post-Soviet countries, investments, Swedish-Belarusian cooperation.
Raktaodiai: vedijos socialinis-ekonominis modelis, ekonominis vystymasis,
eksportas, importas, savivalda, vyriausyb, savivaldybs, grafysts, Europos integracija, vienoda valiuta, posovietins alys, investicijos, vedijos ir Baltarusijos bendradarbiavimas.
Introduction The words economic miracle are frequent in the XX century history of
Sweden. Within only several decades, the poor agrarian country has turned into one
1 The author would especially like to thank the Swedish Institute, Bors University, and the Embassy of
the Kingdom of Sweden in Belarus for the opportunity to visit and study the Swedish model of social
development.
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Yuri Krivorotko. Swedish Model of Economicand Social Development
34
of the richest and most advanced industrial powers. Rapid industrialization,
absence of conflicts in the labour market, traditional means of solving social
conflicts, abstention from wars and destruction were the basic preconditions for the
emergence of a society of general prosperity. Many years after the Second World
War, Sweden stands as an example of a successfully developed state and well
organized society with its own third way between capitalism and socialism.
Experts abroad have devoted much attention to the general welfare of the
Swedish state. Its experience has to some extent appeared comprehensible for other
countries. It should be noted that the last decades of the XX century have brought
truly revolutionary changes to the world in areas of technology, economic and social
development. Scientific and technological revolution, European integration,
globalization, the wave of neo-conservatism, the collapse of Communism have also
had an impact on the economy and policy of the small country. External factors have
considerably strengthened the effect of internal changes that have proved essential in
renewing of terms and principles of common good. Facing the challenges of post-
industrialism, globalization and individualization, the institutions, politicians and
ideology of the Swedish model have recognized their historically passing character.
The factors mentioned above have seriously undermined the mechanism of national-
state regulation of the Keynesian type and have posed a problem for the country to
introduce corrective measures to the existing model. In economic policy, a period of
social and economic development characterized by neo-conservatism and neo-
liberalism has grown as a new paradigm, replacing the previous one.
Swedish economic success and high rates of economic growth during the last ten
years confirm that the paths of reform in Sweden have been chosen correctly.
Therefore, a study of Swedish experience is important for both, economic science
and post-Soviet practice.
Development stages of the Swedish model
It is possible to identify three stages in the economic development of Sweden. In
the first stage (between 1870 and 1914), Sweden transformed from an agrarian
country into an industrial-agrarian country. During the second stage (between 1920
and 1970) Sweden became an industrially developed country. During the third stage
(between 1970 and the present) Sweden has been a post-industrial country with a
high standard of living as compared to other states with high rates of economic
growth. An analysis of the economic2 structure and industrial branch structure of the
economy allows us to conclude that the structure of the Swedish economy has
considerably changed under the influence of such factors as scientific and
technological progress, growth of foreign relations and EU accession. The structure
of the Swedish economy completely corresponds to the economic structure of other
developed countries: shares of agriculture, and industry and services (respectively
2 Structure which includes divisions in national economy: industry, agriculture, services etc.
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 3344
35
1.95% and 70.3% of GDP in 2008)3. Despite of low share of agricultural production
in GDP and the number of employees occupied in this sphere, Sweden provides more
than 90 % of its own production and is also an exporter of grain, meat and oil. The
country entered a post-industrial stage in the seventies and a considerable share of
services is provided by the state sector of the economy (nearby one third), in contrast
to other developed countries.
Evolution of the Swedish model
A modernization mechanism of the economic model emerged in the late 1960s.
For a long time, its basic aims were full employment and income equalization for the
population. In view of considerable differentiation in conditions between the South
and the North of Sweden, problems of equalization were very relevant. In the
implementation of these aims, a leading part was played by the state sector. Sweden
ranks first in the world among developed countries in terms of state interventionism
in the national economy. This is expressed by such indicators as the share of state
expenditures in areas of consumption, investments and transfers, which made up
49.2% of the GDP in 2008. Furthermore, the state sector in Sweden accounts for
about one third of all employment in the country. However, the share of state
businesses is rather low: only 5% of population are occupied in state enterprises and
they comprise 6% of the GDP. The nationalized entities mainly function in the raw
materials sector (mining, ferrous metallurgy), transport, communications, energy
sector and the public services sector.
By means of active state regulation, especially the highest tax burden in the
world, Sweden has achieved a state of general welfare in the XX century. It provides
for free education, children care, elderly care, health and medical care, high pensions
and other elements of the social protection mechanism. However, in the second half
of the 1970s, the Swedish model has started exhibiting glitches in the functioning of
its mechanism. Rates of GDP increase in the period of 1976-1989 were twice below
the rates of the first part of the 1970s. As labour costs were about 20% above other
competitor countries, the competitiveness of the Swedish industry has sharply
decreased. Decrease in duration of the working day, decrease of pension age and
increase of the holiday period have led to a decrease in the rates of labour
productivity. The overestimated exchange of a fixed rate of the krona to the dollar
has led to stagnation of export, outflow of capital abroad, and interest rate growth.
Under a high tax burden, the labour motivation of the population decreased and
existing restrictions of the Swedish government on inflow of foreign investments did
not promote economic development and increase of competitiveness of domestic
production.
3 Hereafter, the absence of references to sources means that the data was received and calculated by the
author on the basis of statistics from the the Statistical Central Bureau of Sweden (www.scb.se), the
Swedish Riksbank (www.riksbank.se), the Government Office of Sweden (www.regeringen.se), and
the WTO (//start.wto.org).
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Yuri Krivorotko. Swedish Model of Economicand Social Development
36
As a result, Sweden initiated a process of governmental modernization of
economic management in the 1990s. It entailed a transition from demand regulation
to supply stimulation, a decrease of state expenditures (they decreased from 73% of
GDP in 1983 to 53% in 2006), decrease of taxation level, dismantlement of
regulation in some branches, privatization of some enterprises, labour market
liberalization, transition of the Swedish krona from fixed to floating rate, and
liberalization of the foreign investments regime.
The banking sector of the Swedish economy is represented by 126 commercial
banks, of which 31 are universal deposit banks, 68savings banks, 25branches of
foreign banks, and 2co-operative banks. Total assets of the Swedish banking sector
amount to 5,129 billion Swedish krona. In Sweden, however, five banks are system-
based banks: Handelsbanken, SEB, Nordea Bank, Swedbank, and Danske Bank. The
share of their assets is around 90% of the whole Swedish banking system. All banks
listed above are diversified financial institutions, with affiliated structures as
mortgage financial institutions, funds of operating companies, investment banks,
insurance and financial companies. The system-based banks provide loans not only
in Sweden but also in other countries: Norway, Finland, Poland, Germany, and the
Baltic states [6].
Challenges in the local government model
As the Fredrik Reinfeldt government took office in October of 2006, a transition
took place from a traditionally strict state approach to local government
administration to an approach based on alliance between the structures of power and
business.
It was argued that the state, with its financial resources, can no longer maintain
the developed social model of general prosperity that evolved in the 1970s. The
municipal sector in Sweden occupies an important place in the national economy. It
is enough to note that in 2008, the share of public services consumption in GDP was
20%, while the local governments consumption compared to the central government
consumption was 72.8% [5]. The development of the Swedish local government
model, in which the top level is represented by 21 counties4 and the bottomby 290
municipalities, compels the local governments to engage in commercial activity,
actively enter the capital markets, and thus ensure their own security. The tendency
of expanding commercialization in the public sector and in public utilities provides
possibilities for the replenishing of local treasuries and reduction of public services
costs. At present, the central and local governments are interested in attracting small
and medium businesses to the public sector. This strategy was first implemented by
means of municipalprivate partnerships in communities and counties. First of all,
such partnerships are connected with the industrial-financial activity of enterprises in
the territory irrespective of ownership types. Many local governments have started
4 Two regions Skne "and" Vstra Gtaland are included in number of counties indicated, as well.
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 3344
37
creating centres for business support. The local government plays a vital role in
sustaining this interaction. In the presence of local government, municipal and
private sectors are not antagonists; they are interconnected and require each other.
The private sector becomes an element of the municipal economy.
The main modes in mutual relations between local authorities and business
entities include complex territorial planning, placing of municipal orders, supply of
capital, granting of assurances, granting of contracts for provision of public utilities
and investment agreements. This field of activity encompassed both, large and small-
scale businessindividual and co-operative. Examples of forms of coordination
between local authorities and business include: alliances and partnerships of
municipal and corporate sectors, non-commercial and economic associations, joint-
stock companies where local authorities and municipal enterprises may act as
shareholders. There are known examples of effective activity in this area, e.g. the
municipalities in the cities of Gothenburg, Eskilstuna, Malm, etc.
The advantages of municipalprivate partnership widen the scope of the
municipal establishment and expand the local potential of municipalities and
counties. Clearly, the local government is more proximate to all types of entities than
the central and regional authorities, since the operations of any active organization
are based on local resources. The local governments can use their standing in the
interests of local community, including the solving of financial problems. Municipal
private partnerships can be very useful, especially in building of schools, hospitals,
highways, other municipal projects. The task of designing, building, and servicing
municipal objects goes to private sector. In initiating these ventures, municipalities
receive revenue and, if the project is effectively implemented, private entities may
derive income from services provided, e.g., road toll collection.
In the marriage of power and business the local authorities do not play a
subordinated role, since many financial problems can only be solved by binding the
income of the real sector to the territory. Therefore, the development of municipal
private partnerships in this sphere supports medium and small, individual and co-
operative businesses.
We should examine one more feature of local government in Swedenthe
integration of municipalities. Integration processes, however, are carried out not from
the top but from the bottomon the initiative of inhabitants. Thus, enthusiasm
for unifying municipalities arises not only in one county. Here again the central
government meets popular desires for changing borders by administratively-
territorially redistributing the regions. Characteristic features of local community
development are constant experiments and searches for optimal fund distribution in
municipalities and counties. Now such experiments are implemented in two regions -
Skne and Vstra Gtaland.
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Yuri Krivorotko. Swedish Model of Economicand Social Development
38
The tendencies of foreign trade development and migration of Swedish and foreign capital
The specificity of the Swedish model of social and economic development
cannot be understood without an analysis of Swedens foreign economic relations.
They have always played a significant and vital role in the national economy.
Sweden has traditionally exercised a liberal foreign trade policy, adhering to the
concept of open economy connected to those of other countries, on the basis of a
smaller market which cannot facilitate modern specialized manufacture of optimum
capacity and competitive level of costs. By our calculations, the countrys foreign
trade quota has increased from 42.0% in 1950 to 94.4% on the average during the
period of 2005-2007. The export and import structure is presented by types of
production illustrated in Table 1 below.
Table 1. Export and import structure in Sweden by the item of products in 2006
(per cent)
Export Share (in
per cent).Import
Share (in
per cent).
Mechanical engineering products 50% Mechanical engineering products 44%
Cellulose and paper industry
production
12% Chemical goods and products 12%
Wood-processing industry products 12% Energy raw materials
11.8%
Mineral raw materials 12%
Other types of products 14%
Other types of products
32.2%
Source: Calculations by the author, based on data from the Statistical Central Bureau of
Sweden (www.scb.se).
As the table shows, the production of mechanical engineering, pulp-and-paper,
wood-processing goods, chemical industry products, and mineral raw materials
prevails in Swedish export. Among leading articles of Swedish import are
mechanical engineering products, chemical goods, energy raw materials. Swedens
main trading partners in 2007 were the EU countries (60.9 %), Norway (9.4 %), the
USA (7.6 %), Russia (2.0 %), and China (1.9 %). Partnership parity has developed
by import as follows: the EU countries (71.6 %), Norway (8.6 %), China (3.5 %), the
USA (3.1 %), and Russia (2.9 %) [5].
Over the last 1015 years, Swedens place in the system of international
specialization and competition has essentially changed because of shifts in
international labour division. The intensification of these processes has brought about
new areas of specialization in Sweden. In particular, Sweden belongs to the so-called
niche specialization, i.e. it concentrates its efforts on a considerably narrow
assortment of goods with the purpose of satisfying world-wide demand for such
goods. This assortment consists of both, simple Swedish products, such as matches,
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Vieoji politika ir administravimas. 2009, Nr. 30, p. 3344
39
bearings, and the most technically sophisticated types of production in the fields of
electronics, biotechnology, pharmaceuticals, nuclear engineering.
Swedish companies have a long history of exporting capital. The first industrial
branches abroad appeared in 1875, and currently, leading Swedish industrial
companies have a strongly pronounced international orientation. The degree of
internationalization among Swedish firms5 is defined as a parity of shares held in
foreign branches to an aggregate number of shares held in trans-national corporations
(multinational corporations), including the employment of parental companies.
According to this measure, Sweden has one of the highest indicators in the world. An
increasing portion of industrial potential is also being transferred abroad. Most of
Swedish capital is vested in large multinational corporations, where national capital
by origin is international capital by sphere of application. The leading role in
transferring industrial production abroad belongs to the machine-building companies.
Among them, we may single out Electrolux with degree of internationalization at
92%, Eriksson59%, Volvo 66%.
About one million employees or a total of 2/3 those employed at Swedish
multinational corporations work at enterprises run by Swedish state capital. It should
be noted that essential changes in the geography of Swedish foreign investments
have not taken place over the last two decades. A traditional area of investment is the
countries of OESR (90% of industrial investments). However, some concentration of
Swedish capital is found in individual countries, such as the USA, Finland, UK, the
Netherlands and Norway, in which 60% of the shares belong to Swedish investments.
Swedish participation in European integration
Integration processes have made a serious impact on the development of
Swedens national economy. For several decades, Sweden did not show much
interest in Western European integration, adhering to its policy of neutrality. This
was a unique disposition in Swedens foreign policy.
The idea to participate in European economic space was first stated in 1989.
Subsequently, Sweden chose its course and the country worked on closer market
integration and fulfilment of political obligations towards a full membership in the
EU. After the fall of the Berlin Wall, it became obvious that Sweden would not be
satisfied with its role as a younger partner and will demand full rights, including the
right to decision-making. In 1991, Sweden declared its desire to join the EU.
As a whole, joining the EU was less for a problem for Sweden, since the country
was at the same level of economic, social and political development as the states at
the core of the EU. For example, in 1995 Swedish GDP per capita was at 102.6%
compared to the level in EU-126. In 19911995, Sweden implemented many changes
5 This indicator is calculated according to the technique of internationalisation accepted in Sweden 6 The EU-12 list includes: Germany, France, Belgium, the Netherlands, Luxemburg, Denmark, UK,
Ireland, Portugal, Spain, Greece, and Italy.
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Yuri Krivorotko. Swedish Model of Economicand Social Development
40
to its national legislation for the purpose of adaptation to standard documents of the
EU.
The motivation of the government and business circles in Sweden for joining the
EU was based on the necessity of finding more economic dynamics. It was
contended that it would have a positive effect on economic growth, employment and
innovative processes.
Relatively little time has passed since Swedish accession into the EU for us to
speak about its long-term consequences. However, it is possible to speak about the
short-term consequences. The accession has certainly facilitated more successful
solutions to Swedens major macroeconomic problems, such as the stability of
economic growth, decrease in the rate of inflation, unemployment and deficits in the
state budget. An analysis of the recent ten years reveals that the national economy
developed rapidly over the first five years (from 1995 to 2000). However, during the
period from 2001 to 2003 a decrease in the level of GDP growth was observed.
During the period from 2004 to 2008, it began growing rapidly once again. As a
whole, the growth of Swedish GDP after joining the EU exceeds the average levels
of other European Union countries.
On two other important macroeconomic indicators, the rates of inflation and
unemployment, Sweden continues to take preferable positions. In 2006,
unemployment comprised 4%. In the conditions of the 2008-2009 financial crisis,
however, it has reached 8.3%. There is still synchronism in development of
inflationary processes and the decreasing indicators of the country are incomparably
better than the EU average. Under the conditions of the raging financial crisis, the
inflation rate in Sweden is currently 0.9%, considerably below the control indicator
target inflation rate of 2%.
The problem of public debt reduction within the limits of EU is quite
successfully resolved. It was decreasing during the period between 1995 and 2008,
from 73.7% to 34.5% of GDP (for comparison, the average in EU-25 countries was
65% in 2005). At the same time, the state budget was reduced with a surplus since
1998. In other EU countries, the balancing of state budgets is more difficult. In 2006,
the average deficit of EU-25 was 2.3%. Similar observations may be applied to the
balance of payments in Sweden. During the period between 1970 and 1995, Sweden
had a negative trade balance, while during the period from 1995 to 2006, there was a
surplus. It comprised 3.9% of the GDP on the average, including the period between
2000 and 2006 when it comprised about 7% of the GDP [6, 7].
Despite obvious improvement to Swedish macroeconomic indicators in the EU
statistical base, competition in the Swedish domestic market appears slightly worse
in comparison to other EU countries. The consumer price index in Sweden was at
20.6% above the average price index of EU-25 in 2006. Recently, the consumer price
index has continued growing and has increased from January, 2007 to December,
2008, arriving at 6.9%. It speaks to the high costs on wages and taxes in the country.
Swedish membership in the EU monetary union is more problematic. In recent
years, two referenda have been carried out on this issue. In both cases, the population
of Sweden expressed a desire to keep its own currency. Only the current financial
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41
crisis has provoked the populace to reconsider the pros and cons. However, one
important argument remains. Under current conditions of financial crisis, and under
an active export position and positive balance of payments, a decrease in the national
currencys exchange rate with regard to the USD and EURO brings in more currency
reserves and promotes stronger monetary circulation. Upon entering the Eurozone,
however, all such export advantages would utterly dissolve due to the single
European currency. Therefore, this argument acts as a deterrent to the countrys entry
into the Eurozone.
It is possible to ascertain that Swedish membership in the EU has brought to it
desirable results such as high economic growth, inflow of foreign investments,
strengthening of competitiveness and decrease in price levels.
Measure of economic cooperation with post-Soviet countries
Historically, active cooperation between Sweden and Russia began at the end of
XIX and beginning of the XX century. It was later interrupted by the October
Revolution and the ensuing Civil War. As a result of comprehensive nationalization
carried out in Russia, the creation of a monopoly for foreign trade and other anti-
market measures, the interest of Swedish businessmen were undermined in Soviet
Russia.
Only after the disintegration of the Soviet Union, and with the beginning of
radical economic reforms in the CIS did the situation change for the better.
The prospects for Swedish trade with post-Soviet countries, including Belarus,
are primarily connected with improvements to the export structure of the post-Soviet
countries, and improvements to the quality and diversification of export deliveries.
The export position of the CIS countries with regard to Sweden obviously includes
raw goods and fuel (more than 90%). It is bound to increase in volume and share in
the foreseeable future. However, the semi-finished products and the processed goods
have both technological and consumer potential in the future. Growth of processed-
good exports, including cars, manufacturing equipment and the volume and diversity
of finished imports in the CIS countries are constantly expanding.
A major problem of exports from CIS countries to Sweden includes the
industrialization of its structure and increase of scientific-capacity products. This will
require active expansion of economic cooperation, moving away from the practices
of simple barter, an establishment of strong industrial contacts, R&D cooperation,
and introduction of joint business into the practice of mutual business ties.
As to investment cooperation with CIS countries, Sweden is included among the
ten major foreign investors into the economy of these countries and occupies the fifth
place since the middle of the 1990s. By estimations of the Swedish Riksbank, the
total sum of Swedish direct investments into CIS countries has reached more than 3
billion USD by the end of 2006 [6]. However, these investments are not yet
considerable and make up only 1.5% from all direct investments which are taken out
of the country. Swedish investments into Belarus are quite small as well. In 2007,
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Yuri Krivorotko. Swedish Model of Economicand Social Development
42
45.9 million USD in Swedish investments (17.2 million USD for the similar period
of 2006), including 18.5 million USD as direct investments have come into Belarus.
For the first quarter of 2008, 12.4 million USD in investments from Sweden,
including 3.1 million USD in direct investments have come into Belarus. Currently,
12 enterprises with Swedish capital are functioning in Belarus, of which 6 are joint
enterprises and 6foreign ones. In the authorized capitals of these enterprises,
Swedish investors have listed 2.7 million USD. Besides, 14 representatives of
Swedish companies, including Ericsson, Volvo, IKEA, and ABB Group
have opened in Belarus.
In trade relations between Sweden and Belarus, the following positions have
emerged in the period between 2000 and 2007, as characterized in Table 2 below.
Table 2. Dynamics of the foreign trade relations between Sweden and Belarus
(mln. USD)
Years Trade turnover Export Import Deficit(+),
Surplus (-)
2000 48.2 13.0 35.1 +21.5
2001 80.6 20.3 60.3 +40.0
2002 126.5 27.2 99.3 +72.1
2003 163.7 65.4 98.3 +32.9
2004 235.7 136.9 98.4 -38.5
2005 351.6 262.6 89.0 +173.6
2006 480.5 365.7 114.8 +250.9
2007 212 77.1 134.9 -57.8
8 month 2008 162.1 65.5 96.75 -31.45
Source: Belarusian Agency of Financial News (AFN)
In 2008, the growth of Swedish imports into Belarus has continued and between
January and August of 2008, increased from 72 million USD to 96.75 million
USDby 148.9%. Positive dynamics of Belarusian exports to Sweden may also be
noted. Between January and August of 2008, the volume of Belarusian exports to
Sweden has comprised 65.5 million dollars or 147.1% in comparison to levels in the
previous year (excluding mineral oil) [4]. We should also mention the delivery of
Belarusian washing machines in 2008. Despite the presence of the largest world
manufacturer of home appliances Electrolux in Sweden, the advancement of the
production of the Joint-Stock Company Atlant in the Swedish marketthe official
dealer of company in Sweden being Atlas Vitvaror ABis dynamically
expanding.
Among other important processes, we should mention measures for increasing
energy efficiency in centralized heating systems as well as recycling and processing
of waste. The interests of Sweden in Belarus are revealed in the activities of the well-
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43
known IKEA Company, whose diversified activity includes large forest areas for the
manufacture of quality furniture with prices accessible for majority of the population.
The IKEA Company has been invited to the Belarusian market by the Belarusian
government to participate in capital formation in order to develop corresponding
branches. Negotiations between the IKEA Company and the Belarusian government
have continued throughout 2009 [4].
Great interest in Belarus has been shown by the Swedish company Rindi
Energy. The company is going to invest into Belarus for the development of biofuel
and export of wood waste.
Conclusions Swedish experience is valuable in both, the purely scientific and the practical
sense. Conditions for economic reform in Belarus are conducive to a variety of the
important components and characteristic features of the Swedish model. In
Swedish political culture, there is mutual understanding between central and local
governments, businesses and government of different tiers, businessmen and
employees, municipalprivate partnerships, the search of optimum decisions on the
basis of broad compromise and consensus between the parties, attraction of public
associations and organizations to the solution of governmental problems on both, the
local and the central level. Finally, the principle of fair equalization of living
conditions between the centre and remote places would be useful to implement in
Belarusian social policy. Certainly, it would make little sense to copy the experience
of Sweden and mechanically transfer it to Belarusian soil. Therefore it is necessary to
borrow everything that would promote softening of political and social confrontation
between power and opposition in Belarus.
Literature
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Reports on Bors, No.3 Spring 2007. Hgskolan i Bors.
2. . . ed. . . 2000. [Local Government.
Experience of Sweden].
3. . . . 2005. [Local
Government in Belarus and other countries]. Minsk: Tonpik, 2005.
4. Reports and dates of Byelorussian informational Agency (AFN) www.afn.by
5. Statistical database of the Statistical Central Bureau of Sweden www.scb.se
6. Statistical data and reports of the Central Bank of Sweden (Riksbank) www.riksbank.se
7. Statistical date and reports of the Government Office of Sweden (www.regeringen.se)
8. Hggroth S., K. Kronvall., C. Riberdahl and K. Rudebeck. Swedish Local Government.
Transitions and Reforms, The Swedish Institute, 1999.
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Sweden. Ministry of Finance, 1995.
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ISSN 16482603 (print) VIEOJI POLITIKA IR ADMINISTRAVIMAS ISSN 2029-2872 (online) PUBLIC POLICY AND ADMINISTRATION 2009, Nr. 30, p. 4556
Loreta Tauginien Mykolo Romerio universiteto Strateginio valdymo ir politikos fakulteto Valdymo
teorijos katedros doktorant. Mykolas Romeris University, Faculty of Strategic Management and Policy,
Department of Management Theory, Post-Graduate Student.
e. patas