Public Governance Committee Meeting at Ministerial Level, Venice, 15 November 2010
Towards recovery and partnership with citizens: The call for innovative and open government

 

Remarks by Aart De Geus, OECD Deputy Secretary-General

 

Ladies and Gentlemen,

 

It is a pleasure to be with you on the occasion of this meeting of the Public Governance Committee at Ministerial Level, and I would like to thank Minister Brunetta and our Italian hosts for their initiative. I represent here our Secretary General who was with us yesterday night but had to   go back to Paris early this morning.

 

In contrast to the beauty of Venice, the economic, financial and social background to our meeting today in many countries is rather grim. But there are also some bright spots in some countries, and there is hope for the future. We also have to continue working further with the the G 20, following the meeting in Seoul last Thursday and Friday, which called upon the OECD to help in many areas. 

 

It is when we were putting together my thoughts for this important meeting, that I came to think of the famous movie "the Good, the Bad and the Ugly", which was filmed here in this country in 1966. In reverse order, I believe, the title of the movie pretty well characterises the situation.

 

The global financial crisis of 2008 was ugly. Banks lost immense amounts of capital, caused by severe failures in behaviour, corporate governance, supervision and regulation. Overnight, markets around the globe lost their function as coordination mechanism, and the consequences were significant, in economic growth, trade, and in employment. In OECD countries we now face on average 10% unemployement.The crisis has evolved in several stages, and these days we are facing a patchy recovery with high unemployment in many countries and high imbalances in public finances. Our public deficits go towards 10% and our public debts go towards 100% GDP on average.

 

Governments are under pressure  to streamline public expenditures, sometimes dramatically, What is bad about it, are the conditions under which these measures frequently have to be decided and implemented: not much time for debate, not many consultations with those who are affected, insufficient data to support evidence based decisions, limited opportunities for international coordination of policies.

 

But there is also a good side to all of it. Following the invite of our Secretary General yesterday, the crisis also presents an opportunity to reshape the role of government,  raise productivity in the public sector, mobilise our citizens,  and create better conditions for growth in the private sector. 

 

Governments Matter

 

Governments matter, that has been more or less always true. Public expenditure represents anywhere between one-fifth and three-fifths of overall GDP. In the future, however, governments may be less and less directly involved in the production of goods and services. Instead, they will increase their capacities for policy setting and steering, ensuring that public services are delivered efficiently, effectively, and in a way that responds to citizens' demands and expectations. In this perspective, moving forward will require governments to significantly improve their capacities for Strategic Insight, Collective Commitment, and Resource flexibility. In fact, these are the three key lessons of our recent comprehensive governance review of Finland.

 

In this search for the new role, functions and machinery of governments and the public sector, we will have to face a number of challenges, highlighted in your agenda for today. As a way to open the discussions, let me offer a few comments. 

 

First, where are governments now?

 

Governments face a double constraint. In the aftermath of the crisis, in many countries, they provided massive economic life support. They implemented large rescue packages for the financial sector, and provided safety nets for workers and citizens who lost their jobs. The other side of the coin was that public finances deteriorated, with much red ink on our balance sheets. Today, fiscal pressures are there, as governments feel strong market signals to return to sound fiscal balances. There is no way out: improving efficiency is a priority. Given the economic scale of the public sector in the economy, this can yield significant dividends.

 

But there is more to it. Governments also have to restore trust. Many of the necessary actions in this area do not cost much, yet offer significant returns by giving citizens and businesses appropriate signals and incentives, and to get in place the right institutions. Improving interactions between the public and private sectors, addressing issues of integrity, all this can and will help.

 

Second, How to square the circle?

 

Fortunately, governments are better armed today to rise to the challenges ahead.
We can make things better and simpler, better assessing priorities, doing more with less and rethinking the machinery of government.

 

We know that many countries have experience with spending reviews and similar tools. The United Kingdom just released its spending review, and it revealed a full menu of opportunities for reform. In today's world, public services can be delivered in many different and innovative ways. Governments have to reap the dividends of IT, which can help rethink government, from top to bottom. The private sector can help too, with innovative and creative solutions. We need to better understand and manage performance, with indicators on service delivery, and priority setting.

 

We also need social engagement, as citizens need to perceive reforms as fair, at a time when they are being called to take greater responsibility. Reforms cannot succeed without citizens' understanding and assent. The recognition that the state by itself cannot do it all needs to be accompanied by a call upon citizens and civil society. They need to be more engaged in the production of services, with the help of the voluntary and not for profit sector, as well as the monitoring of quality to make sure that they can be drivers for success and that they own part of the solution.

 

Governments will not be able to succeed if the public sector just reflects the past. The challenge is to ensure fluidity and capacity for change in organisations that are often larger than the largest private companies. Technology can help, as illustrated by the outcome of our recent E-Leaders Meeting in Brussels. Human capital needs to be mobilised and civil servants committed to deliver the best. Ageing in the public sector is both a challenge and an opportunity for the civil service, since it offers the possibility to reorganise and streamline resources.

 

Minister Van Quickenborne from Belgium mentioned at our recent Regulatory Policy Conference in Paris, that we need Human Rules, to make things simpler, looking for ways to simplify the life of others, including civil servants themselves, to cut waste and streamline the bureaucracy. The review of Governance in Mexico, and our recent study of Italy have highlighted the benefits of cutting red tape and reducing bureaucracy.

 

In a web-based and information driven society, governments can leverage on the use of ICTs to increase openness and transparency and improve user-centered service delivery. Technology offers opportunities to better engage with the public.  

 

In fact, openness and transparency could imply a new relation, or a better balance between governments and citizens. They can redefine the boundaries between the public and the private spheres and be formidable tools to strengthen integrity. This will help meeting new social demands and consolidating trust.
These efforts are an economic imperative. Corruption, as we have to use the word in plain terms, means waste and inefficiency, with taxpayer's money that could have been used for other policy purposes than for paying bribes. This is for example one of the reasons why we have developed the Recommendation for Enhancing Transparency in Public Procurement.

 

Beyond the immediate measures, how can governments strengthen their strategic capacity for foresight, innovation and leadership?

 

Governments need to invest in their capacity to anticipate, to be ready for the future and for the unforeseeable.  Financial crises, earthquakes, new infectious diseases, environmental events, all these events call for more than just sectoral policy responses, they require  the capacity to coordinate and mobilise the public sector as a whole.

 

This includes two things: A first is a greater capacity to manage and assess risks, understanding the balance of responsibility between the public and the private, relying on regulators to provide early warning of problems. The second is data, not just statistics, but lively data for action. This is what the OECD is committed to deliver with Government at a Glance. Our team is busy preparing the second edition.

 

Ladies and gentlemen,

 

Building better government will require a common and collective effort. And the OECD will be here to help in this effort, acting as a "club of best practice", a hub for global policy dialogue and exchange of experience, so that we can all learn from each other to design "Better Policies for Better Lives". As mentioned by Secretary General Angel Gurria yesterday, we have been in this line of business for quite some while as we are celebrating this year the 50 years of the Organisation.  I just wanted to thank again our Italian Host, Minister Brunetta, and our Vice chairs from Australia, Mr. Terry Moran, Canada, Mr. Stockwell Day, for taking responsibility today to help guide your discussions. We also wish all the best or Ms. Irma Krebs, from Slovenia who was unfortunately not in a position to attend.

 

I wish you very fruitful discussions today.