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Title: GOVERNMENT REFORM IN ITALY: STATE OF THE ART


1
GOVERNMENT REFORM IN ITALYSTATE OF THE ART
  • Franco BASSANINI
  • Cabinet Minister for Public Administration
  • Italy Today Public Administration Issues
  • AD HOC COUNCIL - Rome November 13, 2000
  • www.funzionepubblica.it

2
The need for Reformin the early nineties
  • An obsolete administration no government-wide
    reforms since 1865
  • 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

3
The need for Reformpublic debt up to 1994 ( of
GDP)
Source Italy - Ministry of the Treasury
4
Calls for Reform
  • The need for change drives large calls for
    Reform and consequently a large consensus among
  • Public
  • Business
  • Labor
  • Parliament (a bipartisan reform)

5
The Tools of Reform
  • 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
  • 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
The Main Areas of Reform
  • Devolution, outsourcing and administrative
    federalism
  • Reorganization of Central Government
  • Civil Service Reform
  • A performance-oriented public sector management
  • Simplifying regulatory and administrative burdens
  • The new Public Budgeting
  • A more transparent and comprehensible Government
  • e-Government

7
Devolutiona leaner but more efficient State
  • Horizontal subsidiarity - focusing Government 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-profit organizations)
  • liberalization of public utilities

8
Devolution liberalization and privatization
  • Liberalization. Three examples
  • 110 fixed telecommunication licenses and 86
    operators instead of Telecom Italia monopoly
  • unbundling of local loop from end 2000
  • ENEL control of electricity market from 90 in
    1990 to less than 40 in 2003
  • Privatization of public utilities ENI, BNL, INA,
    ENEL, Telecom, Alitalia, Autostrade
  • world largest privatization program (total
    revenue up to end 1999 approx. 87 billions US
    Dollars)

9
Devolutionrevenues from privatization in OECD
countries (1993 - 1998)
Millions US Dollars France (F)
48.530 Germany (G) 15.392 Italy (I)
63.473 Spain (S) 34.441 Un. King.
(UK) 28.709 Japan (J) 46.721 USA (US)
3.100 Canada (C)
7.024 Australia (AUS) 45.000
Source OECD
10
Devolutiontotal stock mkt cap/GDP
The privatization program has contributed
fostering the growth of the Italian equity market
11
Devolutionstrengthening 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
  • 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
  • transferring general legislative powers to
    Regions (constitutional bill presented by the
    Government)
  • Strengthening efficiency of Local Administrations
  • reform of control mechanisms, city managers,
    local public managers chosen also from private
    sector, salaries linked to performance

12
Devolutionthe 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
  • 1997-1998 five legislative decrees identify in
    detail the tasks to be transferred from central
    to local Government
  • 1999-2000 Prime Minister decrees transfer groups
    of tasks together with related human and
    financial resources
  • January 1st, 2001 end of devolution process

13
Devolutionopinions of the public
Has the Bassanini reform improved the
efficiency of local Governments?
14
Reorganization of Central Governmentthe general
strategy
  • 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
  • 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)
  • Introducing Agencies non-ministerial bodies
    with technical and executive tasks
  • Central Government Local Offices merging
    several State local offices into a single
    interministerial body

15
Reorganization of Central Governmentreform of
the Prime Ministers Office
  • Making the role of stimulating, guiding and
    coordinating more effective
  • A leaner but stronger, more flexible structure
  • 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

16
Reorganization of Central Governmentfrom 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
  • - Ministry of Industry, Trade and Crafts
  • - Ministry of Foreign Trade
  • Ministry of Communications
  • P.M.O. Tourism Dept.

6 Ministry for Production Activities
7 Ministry of Agriculture
17
Reorganization of Central Governmentfrom 18 to
12 Ministries
  • - Ministry of Environment
  • Ministry of Public Works (part)
  • P.M.O. Servizi Tecnici Dept.
  • 8 Ministry of the Environment and Protection of
    the Territory
  • Ministry of Public Works (part)
  • Ministry of Transport
  • P.M.O. Dept. for Urban Areas

9 Ministry of Infrastructure and Transport
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

12 - Ministry of Heritage and Culture
- Ministry of Heritage and Culture - P.M.O. Dept.
of Sport - P.M.O. Dept. of Entertainment
18
Civil Service Reformdistinguishing Politics from
Administration
  • Politicians are responsible for Policies
  • Ministers define policies and strategies, assess
    results, appoint general directors but have no
    further direct involvement in administration
  • Public managers are responsible for
    Administration
  • public managers are given broader powers but
    also greater responsibilities, and higher
    salaries linked to results and performance

19
Civil Service Reformthe privatization of
Civil Service
  • Civil law for civil servants
  • public administration has the same powers as
    private sector employers
  • Jurisdiction for civil service disputes
  • since 1998 transferred from the Administrative
    to the Civil Courts

20
Civil Service Reformthe contractualization of
Civil Service
  • 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.
  • an Agency created to represent the State in
    labor negotiations in place of the Minister (but
    following Government guidelines)
  • 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
Civil Service Reformthe Resistances
  • Strong contradictions and incoherencies remain
    in
  • The behaviour of Trade Unions
  • the choice, in principle, in favour of
    professionalism and merit, responsibility and
    decentralisation is sometimes contradicted
  • The behaviour of Politicians, administrators and
    public managers
  • no global vision in salary increases
  • strong defence of privileges and of the maze of
    charges
  • Parliament choices
  • The choice, in principle, in favour of collective
    bargaining, meritocracy and quality is
    contradicted by the constant enactment of rules
    creating favouritism ope legis promotions,
    permanent hiring without concours of pro-tempore
    workers etc.

22
A performance-orientedpublic administrationthe
new approach
  • Before a formal/juridical approach to
    government
  • compliance with laws and procedures without
    regard to quality and results
  • 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
    businesses
  • favors the allocation of investment capital
  • acquires relevance beyond the national borders
  • partially sheds its authoritative nature

23
A performance-orientedpublic administrationthe
new public management
  • An interministerial body of public managers, with
    few exceptions
  • Access by concours, a formal competitive
    examination
  • (no more than 5 of managers may be chosen from
    outside the Civil Service for a fixed term)
  • No more jobs for life individual contracts
    (fixed term 2-7 years) determine assignment,
    duties and salaries
  • Managers salaries vary depending on
    responsibilities and performances

24
A performance-orientedpublic administrationthe
Resistances
  • Administrations and judges still show a
    legalistic and statist culture
  • The defence of irremovability and
    irresponsibility of top civil servants in the
    name of administrative neutrality
  • The fear of the spoils system (it exists in the
    USA, but not in Italy)
  • The refusal of the culture of evaluation and merit

25
Simplificationthe problems
  • Regulatory inflation
  • over 35,000 primary laws (of State and Regions)
  • Regulatory costs
  • unnecessary burdens on the public, on businesses
    and even on public administrations
  • Regulatory pollution
  • ambiguity, contradictions, overlapping, layers
    of rules generate uncertainty on the existing law

26
Simplificationa specific policy on regulatory
reform
  • Regulatory impact analysis
  • to measure the cost of new regulations on the
    public and business
  • A central Regulatory Simplification Unit
  • a task force of 65 experts and staff in P.M.O.,
    exclusively monitoring regulatory quality,
    drafting simplification decrees and consolidated
    texts
  • Consultation
  • the Osservatorio per la semplificazione a
    consultative body with representatives from
    Ministries, Regions, Local Authorities and social
    parties

27
Simplificationthe tools
  • Self-declarations replace more than 95 of the
    certificates
  • Notification of the beginning of an activity
    and silent consent (in 194 cases) replace
    authorizations and licenses
  • One conferenza di servizi (combined services
    conference) replaces many administrative acts
  • One-stop-shop (on line) a single procedure to
    start up a new productive plant, replacing 43
    previously needed authorizations (see specific
    slide)
  • Few consolidated texts replace thousands of laws
    and decrees
  • Annual simplification laws enabling government to
    abolish or simplify existing procedures,
    authorizations and licenses.

28
Simplificationsome initial results
  • 180 procedures ruled by primary law have already
    been delegislated (ready to be abolished or
    simplified by Government decree)
  • 71 procedures already simplified by Government
    (50 in the year 2000, with the support of the
    new central unit). They include the
    one-stop-shops for new productive plants, car
    drivers, import-export trade
  • 8 consolidated texts drafted (on local
    Governments, cultural heritage, administrative
    documentation, building activities,
    expropriations, university, civil service,
    justice expenses) 3 of them already in force
  • relevant progress in regulatory capacity shown
    by the draft report of the OECD regulatory review

29
Progress in regulatory capacity indicators,
1998-2000
Source OECD, Public Management Directorate, 2000.
30
Simplification of certificates issued per year
Data 2000 8-month projection of the year 2000
Source Italy Department of Public
Administration
31
Simplification of certified signatures issued
per year
Data 2000 8-month projection of the year 2000
Source Italy Department of Public
Administration
32
Simplificationthe opinion of the public
  • Do you know that in most cases all you need is a
    self-declaration?

Do you think it is useful?
Source ISPO
33
Simplification the one-stop-shop examplenot
only a single access, but also a single answer
  • Since 1999 a single procedure to start up a new
    business, replacing 43 authorizations previously
    needed
  • Before 2-5 years to get a final answer
  • Now normally no more than 3 months in most
    cases, max 11 months
  • (average time 57 days in a sample of 100
    operational one stop shops)
  • One single office to deal with businesses and a
    new role for Municipalities in the development of
    their territory
  • An e-structure, accessible through the net

34
The new public budgetingfrom financial to
economic budget
  • Before a segmented spending model with more than
    6.000 expenditure units
  • Now about 1.000 basic budget units, matching
    each Ministrys target and responsibility
  • Only one administrative office responsible for
    each basic unit
  • New economic budget showing the link between the
    use of resources and achievements

35
The new public budgeting new spending procedures
  • Drafting the budget no longer the traditional
    criteria of incremental spending
  • An effective cost analysis to back the annual
    financing law and the spending legislation
  • More effective constraints on Government
    expenditure bills and parliamentary amendments
  • An electronic mandate
  • Towards a permanent electronic market for public
    purchases
  • Planning hiring of civil servants

36
The new public budgetingpublic sector personnel
cost ( of GDP)
Source OECD and Italy DPEF 2000-2003
37
The new public budgeting public deficit ( of
GDP)
Source ISTAT and Italy DPEF 2000-2003
38
The new public budgeting public debt ( of GDP)
Source ISTAT and Italy DPEF 2000-2003
39
The new public budgeting primary expenditure in
Italy and EU ( of GDP)
Source ISTAT and European Commission
40
e-Government
  • IT the best resource for a leap forward in
    quality change
  • Electronic management of administrative
    documents, procedures and archives
  • 12,000 billion liras (5,2 bill. USD) for
    investments in 2000-2002 (11,000 already
    allocated, 1,300 coming from the UMTS licenses)
  • Electronic ID card (under experiment)
  • The Government Portal a single gateway for
    public administrations
  • Towards electronic public procurements

41
e-Governmentsome first results
  • Electronic Revenue Service 100 income tax
    returns (40 millions per year) are filed and
    reviewed electronically
  • Land Register (80 of documents are filed and
    reviewed electronically)
  • Electronic signature (having legal value from
    1998) more than 1 million signatures already
    certified by 8 companies
  • A Single Administrative Network

42
The Italian Action Plan fore-Government
  • Citizens will obtain any public service by simply
    applying to any front-office administration in
    charge
  • Citizens will communicate variations in their
    personal information to the administration only
    once
  • Each administration will be able to gather the
    information needed, wherever stored (all public
    services on line)
  • All the public services for which it is
    technically possible will be delivered on line

43
Action Plan points
  • Exchange of information system for local
    land-registries
  • Electronic identity cards
  • Promotion of digital signatures
  • Informatic Protocols
  • e-procurement
  • Foundation courses
  • Specialist courses
  • Information portals
  • Portals for supply of services
  • National networks
  • Local administrations on line
  • Integration of personal data
  • National index of personal data

44
The Future of Reform
  • The crucial phase of implementation
  • the Reform has almost been achieved in its laws
    and decrees, but laws alone cannot change
    citizens lives
  • What are now the main challenges?

45
The Future of Reform
  • Changing the culture
  • Acquiring and disseminating new approaches
  • to technological and organizational innovation
  • to simplification (releasing unnecessary
    administrative burdens)
  • to quality of service and performance
  • to citizen-user satisfaction
  • to rewarding professionalism and merit
  • to promoting, encouraging and energizing citizens
    and businesses

46
The Future of Reform
  • Communication
  • disseminating and
  • sharing information to
  • explain to citizens their new rights

47
The Future of Reform
  • Investing on Public Administration
  • 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 financial incentives, to promote quality of
    services and professional growth

48
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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