GOVERNMENT REFORM IN ITALY

F. Bassanini Government Reform in Italy

1

GOVERNMENT REFORMGOVERNMENT REFORMIN ITALYIN ITALY

Franco BASSANINIMinistro della Funzione Pubblica

della Repubblica Italiana

F. Bassanini Government Reform in Italy2

The calls for ReformThe calls for Reformin the early ninetiesin the early nineties

No government-wide reforms since 1860

Islands of excellence in a sea of general inefficiency

Crucial need to balance the budget and reduce public debt


The calls for ReformThe calls for ReformPublic debt (% of GDP)Public debt (% of GDP)

57.7 59.964.9

70

86.390.5 92.6

124.9

101.598

108.7

119.1

82.3

75.2

95.6

55

65

75

85

95

105

115

125

135

Source: Italy - Ministry of the Treasury


Consensus on ReformConsensus on Reform

Public

Businesses

Labor

Parliament


The Tools of ReformThe Tools of Reform

The main “legge delega” n. 59 of 1997:Parliament gives Government the power to legislate in defined areas, pursuant to the principles set by the law

The “delegificazione” mechanism:substituting primary laws with Government decrees in two main sectors: administrative procedures and organization of public offices


The Areas of ReformThe Areas of Reform Regulatory Reform

Devolution to Local Authorities

Reorganization of Central Government

Civil Service Reform

Performance-oriented public sector management

The new Public Budgeting

A more transparent and comprehensible Government

e-Government

7 F. Bassanini Government Reform in Italy

Regulatory ReformRegulatory Reform1 - the problems1 - the problems

Regulatory inflation:over 35,000 primary laws

Regulatory costs:unnecessary burdens on the public, on businesses and even on the public administrations

Regulatory pollution:ambiguity, contradictions, overlap, layers of rules


Regulatory ReformRegulatory Reform2 - the Simplification strategy2 - the Simplification strategy

Reducing red tape: a broad strategy of “delegificazione”, deregulation and simplification- more than 180 procedures to be abolished or streamlined,

downgrading the level of regulation- annual “simplification laws”

Simplification tools (examples):- notification- self-declarations- reduction of the number of public Authorities involved in a

procedure- fixed terms to end a procedure- use of “silent consent” mechanism- “conferenza di servizi” (combined services conference)


Regulatory ReformRegulatory Reform3 - other Better Regulation tools3 - other Better Regulation tools

Codification

Regulatory Impact Analysis

Consultation:the new “Osservatorio per la semplificazione”

(Advisory Body on Simplification)


Regulatory ReformRegulatory Reform4 - the structures4 - the structures

The Legislative Department in the Prime Minister’s Office:a stronger coordination of each Ministry’s regulatory activity

The new “Regulatory Simplification Unit”:a Central Government specialized Office, exclusively monitoring “regulatory quality”


Regulatory ReformRegulatory Reform5 - the example of the “One Stop Shop 5 - the example of the “One Stop Shop

for Business”for Business” Since 1999 a single procedure to start up a new business,

replacing 43 authorizations previously needed

Before: 2-5 years to get a final answerNow: normally no more than 3 months, max 11 months

The “conferenza di servizi”: a system to bring together in a single forum all the public Authorities involved in a procedure

The leading role of the Municipality. A new relationship “Municipalities-SME”

An e-structure


Regulatory ReformRegulatory Reform6 - the international context6 - the international context

Need for coordination at EU level

OECD Regulatory Reform Reviews


DevolutionDevolution1 – Reconsidering Government’s tasks1 – Reconsidering Government’s tasks

Rethinking Government’s tasks: focus on core-business

The so-called “administrative federalism”


DevolutionDevolution2 - “horizontal subsidiarity”2 - “horizontal subsidiarity”

Closing unnecessary activities

Outsourcing and/or privatization of activities that can be more efficiently undertaken by the private sector (business and non-profits)

Liberalization of public utilities


DevolutionDevolution3 - “vertical subsidiarity”3 - “vertical subsidiarity”

Mandatory list of State tasks

Transferring all other tasks to Authorities nearest to citizens and businesses. Local Authorities play an active role in civil and economic growth

Years 1997-1998: identification of tasks to be transferred from central to local Government (Regions, Provinces, Municipalities)

Years 1999-2000: devolution of tasks together with related human and financial resources


Reorganization ofReorganization ofCentral GovernmentCentral Government1 - the general strategy1 - the general strategy

The first government-wide Reform since 1860: a system up to now grown by “adding layers”

Merging bodies with similar missions; eliminating duplication and segmentation

Reducing the Ministries from 22 (in 1995) to 18 (now) to 12 (in April 2001)

Functions assigned by law; internal organization established by secondary regulation


Reorganization ofReorganization ofCentral GovernmentCentral Government

2 - reform of the Office of the Prime Minister2 - reform of the Office of the Prime Minister Transferring executive tasks to “sector” administrations

Making the roles of stimulating, guiding and coordinating more effective

Additional specific responsibilities: reforms, regulation, P.A., dialogue with supra- and intra- national Authorities (EU, Regions, Municipalities)

A slimmer but stronger (and more flexible) structure


Reorganization ofReorganization ofCentral GovernmentCentral Government3 - from 18 to 12 Ministries3 - from 18 to 12 Ministries

I 4 “TRADITIONAL” MINISTRIES

PRESENT ORGANIZATION AFTER THE REFORM

1 - Ministry of Foreign Affairs 1 - Ministry of Foreign Affairs

2 - Ministry of the Interior

- PMO Emergency Management Dept.2 - Ministry of the Interior

3 - Ministry of Grace and Justice 3 - Ministry of Justice

4 - Ministry of Defense 4 - Ministry of Defense


Reorganization ofReorganization ofCentral GovernmentCentral Government 4 - from 18 to 12 Ministries4 - from 18 to 12 Ministries

II 3 “ECONOMIC” MINISTRIES


5 - Ministry of the Treasury and Budget

6 - Ministry of Finance

5 - Ministry of Economy and Finance

7 - Ministry of Industry, Trade and Crafts

8 - Ministry of Foreign Trade

9 - Ministry of Communications

- PMO Tourism Dept.

6 - Ministry for Production Activities

10 - Ministry of Agricolture 7 - Ministry of Agricolture



III 2 MINISTRIES “FOR THE TERRITORY”


11 - Ministry of the Environment

12 - Ministry of Public Works (part)

- PMO “Servizi Tecnici” Dept.

8 - Ministry of the Environment and Territory

12 - Ministry of Public Works (part)

13 - Ministry of Transport

- PMO Dept. for Urban Areas

9 - Ministry of Infrastructure and Transport



IV 3 “SOCIO-CULTURAL” MINISTRIES


14 - Ministry of Employment and Social Security

15 - Ministry of Health

- PMO Dept. of Social Affairs

10 - Ministry of Employment, Health and Social Policies

16 - Ministry of Education

17 - Ministry of Universities and Scientific Research

11 - Ministry of Education, Universities and Research

18 - Ministry of Heritage and Culture

- PMO Dept. of Sport

- PMO Dept. of Entertainment12 - Ministry of Heritage and Culture


Reorganization ofReorganization ofCentral GovernmentCentral Government77 - Other Reform parts - Other Reform parts

“Junior” Ministers (e.g.: Foreign Trade, Health)

“Agenzie”: non-ministerial bodies with technical and executive tasks

“Central Government Local Offices”: the “aircraft carrier” model

A more flexible, “delegislated”, internal organization: from the traditional “pyramid model” to Departments


Civil Service ReformCivil Service Reform1 - distinguishing Politics from 1 - distinguishing Politics from

AdministrationAdministration

“Politicians are responsible for Policies”:no more direct involvement in administration

Tasks of political Authority:defining policies and strategies; assessing results; appointing directors general

“Managers are responsible for Administration”:managers are given broader powers, higher salaries but also greater responsibilities (see next)


Civil Service ReformCivil Service Reform2 - the “privatization” of Civil Service2 - the “privatization” of Civil Service

Civil law for civil servants

Labor Contracts:since 1992-1993 collective bargaining (at national and local level) has progressively replaced law in determining employment conditions of civil servants. The “negoziazione integrativa”.

The ARAN:An Agency to represent the State in labor negotiations

Reform of labor representation

Jurisdiction for civil service disputes:since 1998 has moved from the Administrative to the Civil Courts


Performance-orientedPerformance-orientedpublic sector managementpublic sector management

1 - the new approach1 - the 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- service quality and customer satisfaction- new performance control to complement traditional legal control- managers salaries vary depending on position and performance



2 - no more “jobs for life”2 - no more “jobs for life” All managers will be appointed for a fixed term (2

to 7 years)

Managers may be removed for poor performance

5% of all State managers may be chosen from outside the Civil Service



3- the new performance evaluation system3- the new performance evaluation system An annual definition of objectives

An Internal Audit Unit in every Ministry or Agency Strategy and Performance Evaluation

A Central Unit for assessing policy and programme effectiveness

Database with Ministers’ directives and performance indicators

Public Service Charters

Towards quality standards and performance evaluation at European level


The new Public BudgetingThe new Public Budgeting1 – from financial to economic 1 – from financial to economic

budgetbudget

Before: a segmented spending model

Now: financial allocations matching each Ministry’s targets and responsibilities

Definition in terms of “economic function of expenditure”: clearer justification for spending


The new Public BudgetingThe new Public Budgeting2 - new expenditure units2 - new expenditure units

The “unità previsionali di base” - new basic budget units

Only one administrative office responsible for each basic unit

New economic budget showing the link between use of resources and achievements


The new Public BudgetingThe new Public Budgeting3 - spending procedures3 - spending procedures

Drawing up the budget: no more traditional criteria of incremental spending

An effective cost analysis to back the annual finance law and the spending legislation

More effective constraints on Government expenditure bills and parliamentary amendments

New spending procedures


A comprehensible A comprehensible GovernmentGovernment

The “Manuale di stile” (Style Manual):a practical tool for employees involved in written communication

Simplifying administrative jargon:proposals for the standardization and simplification of the most common official forms

The Bill on “Institutional Communication”


A transparentA transparentGovernmentGovernment

Since 1990

Administrative Procedure Law n. 241:

access to administrative acts is the rule,

secrecy is the exception


ee-Government-Government

IT: the best resource for a step change in quality

Electronic signature

Electronic management of administrative documents, procedures and archives

Electronic ID card

An Single Administrative Network

The “Portale Unico”: a single gateway for public administrations

Towards electronic public procurements


First AchievementsFirst Achievements

Reduction of deficit and public debt Downsizing of the Government Increased efficiency and effectiveness Launch of innovation and simplification strategies Reduction of certificates and bureaucratic

formalities Representation and transparency in labour

negotiations


First AchievementsFirst Achievements11- personnel cost (% of GDP)- personnel cost (% of GDP)

12

11,6 11,5 11,4

10,810,6 10,5 10,4

10,110,2

12,5

12,712,712,8

10

10,5

11

11,5

12

12,5

13

Source: OECD and Italy DPEF 2000-2003


First AchievementsFirst Achievements2 - Public Administration deficit (% of GDP)2 - Public Administration deficit (% of GDP)

11,110,1

9,68,5

9,2

7,76,6

2,7 2,71,9 11,5

0,6 0,10

2

4

6

8

10

12

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Source: Italy - DPEF 2000-2003


First AchievementsFirst Achievements3 - Public debt (% of GDP)3 - Public debt (% of GDP)

Source: Italy - DPEF 2000-2003

98

101,5

108,7

119,1

124,6122,4

118,7114,9

124,9

125,3

100

104,6

112,9109,4

95

100

105

110

115

120

125

130


First AchievementsFirst Achievements4 - Public Administration revenues4 - Public Administration revenues

and primary expenditures ( and primary expenditures (% of GDP)% of GDP)

35

37

39

41

43

45

47

1990 1998

35

37

39

41

43

45

47

1990 1998

ItalyEU

CURRENT REVENUES TOTAL PRIMARY EXPEND.

Source: ISTAT and EU Commission


First First AchievementsAchievements 5 - Certificate decrease per year5 - Certificate decrease per year

19961998

1999

68.630.268

49.884.104

34.797.235

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

60.000.000

70.000.000

Source: Department of Public Function



6 - Certificate decrease in 17 cities : Jan/1996-Jan/20006 - Certificate decrease in 17 cities : Jan/1996-Jan/2000

-28,57%

-42,52%

-48,43%-53,25%

-54,71%-56,57%

-65,8% -66,23%-70%

-55,98%-56,28%

-68,92%-67,18%-66,48%-71,54%

-79,85%

-85,93%

-62,21%

0

10

20

30

40

50

60

70

80

90

100




7 - Certified signature decrease per year7 - Certified signature decrease per year

19961998

1999

35.186.550

20.199.919

7.426.909

0

5.000.000

10.000.000

15.000.000

20.000.000

25.000.000

30.000.000

35.000.000

40.000.000




8 – Reform knowledge8 – Reform knowledge


No - 15,1

Yes - 84,9

Do you know Bassanini’s reform?



9 – Reform evaluation9 – Reform evaluation

Source: Unicab - Sole 24 Ore 6.3.2000

No 24,9

Yes Partially

31,7

Yes 36,1

Don't know 7,3

Has the Bassanini’s reform improved the functionality of the local government?


The Future of the ReformThe Future of the Reform The crucial phase of implementation

Communicationinformation sharing and involvement to maintain a general consensus on the Reform

Trainingto improve awareness among the main interpreters of the Reform: Regional and Local Government, public managers and employees

The “EURO example”Italy is a country capable of finding hidden human resources to face the most difficult tasks. The “Maastricht approach”

Documents

GOVERNMENT REFORM IN ITALY