GOVERNMENT REFORM IN ITALY

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GOVERNMENT REFORMIN ITALY

• Franco BASSANINI
• Ministro della Funzione Pubblica
• della Repubblica Italiana

2
The calls for Reformin 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

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The calls for ReformPublic debt ( of GDP)
Source Italy - Ministry of the Treasury
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Consensus on Reform

• Public
• Businesses
• Labor
• Parliament

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The 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

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The 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

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Regulatory Reform1 - 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

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Regulatory Reform2 - 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)

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Regulatory Reform3 - other Better Regulation
tools

• Codification
• Regulatory Impact Analysis
• Consultation
• the new Osservatorio per la semplificazione
  (Advisory Body on Simplification)

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Regulatory Reform4 - the structures

• The Legislative Department in the Prime
  Ministers Office
• a stronger coordination of each Ministrys
  regulatory activity
• The new Regulatory Simplification Unit
• a Central Government specialized Office,
  exclusively monitoring regulatory quality

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Regulatory Reform5 - the example of the One
Stop Shop 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 answer
• Now 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

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Regulatory Reform6 - the international context

• Need for coordination at EU level
• OECD Regulatory Reform Reviews

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Devolution1 Reconsidering Governments tasks

• Rethinking Governments tasks focus on
  core-business
• The so-called administrative federalism

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Devolution2 - 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

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Devolution3 - 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

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Reorganization ofCentral Government1 - 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

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Reorganization ofCentral Government2 - 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

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Reorganization ofCentral Government3 - from 18
to 12 Ministries
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Reorganization ofCentral Government 4 - from 18
to 12 Ministries
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Reorganization ofCentral Government5 - from 18
to 12 Ministries
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Reorganization ofCentral Government6 - from 18
to 12 Ministries
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Reorganization ofCentral Government7 - 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

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Civil Service Reform1 - distinguishing Politics
from Administration

• 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)

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Civil Service Reform2 - 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

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Performance-orientedpublic sector management1 -
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

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Performance-orientedpublic sector management2 -
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

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Performance-orientedpublic sector management3-
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

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The new Public Budgeting1 from financial to
economic budget

• Before a segmented spending model
• Now financial allocations matching each
  Ministrys targets and responsibilities
• Definition in terms of economic function of
  expenditure clearer justification for spending

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The new Public Budgeting2 - 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

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The new Public Budgeting3 - 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

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A comprehensible Government

• 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

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A transparentGovernment

• Since 1990
• Administrative Procedure Law n. 241
• access to administrative acts is the rule,
• secrecy is the exception

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e-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

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First 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

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First Achievements1- personnel cost ( of GDP)
Source OECD and Italy DPEF 2000-2003
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First Achievements2 - Public Administration
deficit ( of GDP)
Source Italy - DPEF 2000-2003
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First Achievements3 - Public debt ( of GDP)
Source Italy - DPEF 2000-2003
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First Achievements4 - Public Administration
revenues and primary expenditures ( of GDP)
CURRENT REVENUES
TOTAL PRIMARY EXPEND.
Source ISTAT and EU Commission
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First Achievements 5 - Certificate decrease per
year
Source Department of Public Function
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First Achievements 6 - Certificate decrease in
17 cities Jan/1996-Jan/2000
Source Department of Public Function
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First Achievements 7 - Certified signature
decrease per year
Source Department of Public Function
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First Achievements 8 Reform knowledge
Do you know Bassaninis reform?
Source Department of Public Function
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First Achievements 9 Reform evaluation
Has the Bassaninis reform improved the
functionality of the local government?
Source Unicab - Sole 24 Ore 6.3.2000
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The Future of the Reform

• The crucial phase of implementation
• Communication
• information sharing and involvement to maintain
  a general consensus on the Reform
• Training
• to 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