GOVERNMENT REFORM IN ITALY Franco BASSANINI Ministro della

GOVERNMENT REFORM IN ITALY Franco BASSANINI Ministro della Funzione Pubblica della Repubblica Italiana F. Bassanini Government Reform in Italy 1

The calls for Reform in the early nineties l No government-wide reforms since 1860 l Islands of excellence in a sea of general inefficiency l Crucial need to balance the budget and reduce public debt 2 F. Bassanini Government Reform in Italy

The calls for Reform Public debt (% of GDP) Source: Italy - Ministry of the Treasury 3 F. Bassanini Government Reform in Italy

Consensus on Reform l Public l Businesses l Labor l Parliament 4 F. Bassanini Government Reform in Italy

The Tools of Reform l 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 l The “delegificazione” mechanism: substituting primary laws with Government decrees in two main sectors: administrative procedures and organization of public offices 5 F. Bassanini Government Reform in Italy

The Areas of Reform l Regulatory Reform l Performance-oriented public sector management l Devolution to Local Authorities l The new Public Budgeting l Reorganization of Central Government l A more transparent and comprehensible Government l Civil Service Reform l e-Government 6 F. Bassanini Government Reform in Italy

Regulatory Reform 1 - the problems l Regulatory inflation: over 35, 000 primary laws l Regulatory costs: unnecessary burdens on the public, on businesses and even on the public administrations l Regulatory pollution: ambiguity, contradictions, overlap, layers of rules 7 F. Bassanini Government Reform in Italy

Regulatory Reform 2 - the Simplification strategy l 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” l 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) 8 F. Bassanini Government Reform in Italy

Regulatory Reform 3 - other Better Regulation tools l Codification l Regulatory Impact Analysis l Consultation: the new “Osservatorio per la semplificazione” (Advisory Body on Simplification) 9 F. Bassanini Government Reform in Italy

Regulatory Reform 4 - the structures l The Legislative Department in the Prime Minister’s Office: a stronger coordination of each Ministry’s regulatory activity l The new “Regulatory Simplification Unit”: a Central Government specialized Office, exclusively monitoring “regulatory quality” 10 F. Bassanini Government Reform in Italy

Regulatory Reform 5 - the example of the “One Stop Shop for Business” l Since 1999 a single procedure to start up a new business, replacing 43 authorizations previously needed l Before: 2 -5 years to get a final answer Now: normally no more than 3 months, max 11 months l The “conferenza di servizi”: a system to bring together in a single forum all the public Authorities involved in a procedure l The leading role of the Municipality. A new relationship “Municipalities-SME” l An e-structure 11 F. Bassanini Government Reform in Italy

Regulatory Reform 6 - the international context l Need for coordination at EU level l OECD Regulatory Reform Reviews 12 F. Bassanini Government Reform in Italy

Devolution 1 – Reconsidering Government’s tasks l Rethinking Government’s tasks: focus on core-business l The so-called “administrative federalism” 13 F. Bassanini Government Reform in Italy

Devolution 2 - “horizontal subsidiarity” l Closing unnecessary activities l Outsourcing and/or privatization of activities that can be more efficiently undertaken by the private sector (business and non-profits) l Liberalization of public utilities 14 F. Bassanini Government Reform in Italy

Devolution 3 - “vertical subsidiarity” l Mandatory list of State tasks l Transferring all other tasks to Authorities nearest to citizens and businesses. Local Authorities play an active role in civil and economic growth l Years 1997 -1998: identification of tasks to be transferred from central to local Government (Regions, Provinces, Municipalities) l Years 1999 -2000: devolution of tasks together with related human and financial resources 15 F. Bassanini Government Reform in Italy

Reorganization of Central Government 1 - the general strategy l The first government-wide Reform since 1860: a system up to now grown by “adding layers” l Merging bodies with similar missions; eliminating duplication and segmentation l Reducing the Ministries from 22 (in 1995) to 18 (now) to 12 (in April 2001) l Functions assigned by law; internal organization established by secondary regulation 16 F. Bassanini Government Reform in Italy

Reorganization of Central Government 2 - reform of the Office of the Prime Minister l Transferring executive tasks to “sector” administrations l Making the roles of stimulating, guiding and coordinating more effective l Additional specific responsibilities: reforms, regulation, P. A. , dialogue with supra- and intra- national Authorities (EU, Regions, Municipalities) l A slimmer but stronger (and more flexible) structure 17 F. Bassanini Government Reform in Italy

Reorganization of Central Government 3 - from 18 to 12 Ministries I 4 “TRADITIONAL” MINISTRIES PRESENT ORGANIZATION AFTER THE REFORM 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 18 F. Bassanini Government Reform in Italy

Reorganization of Central Government 4 - from 18 to 12 Ministries II 3 “ECONOMIC” MINISTRIES PRESENT ORGANIZATION 5 - Ministry of the Treasury and Budget 6 - Ministry of Finance AFTER THE REFORM 5 - Ministry of Economy and Finance 7 - Ministry of Industry, Trade and Crafts 6 - Ministry for Production 8 - Ministry of Foreign Trade Activities 9 - Ministry of Communications - PMO Tourism Dept. 10 - Ministry of Agricolture 7 - Ministry of Agricolture 19 F. Bassanini Government Reform in Italy

Reorganization of Central Government 5 - from 18 to 12 Ministries III 2 MINISTRIES “FOR THE TERRITORY” PRESENT ORGANIZATION AFTER THE REFORM 11 - Ministry of the Environment 12 - Ministry of Public Works 8 - Ministry of the Environment (part) and Territory - PMO “Servizi Tecnici” Dept. 12 - Ministry of Public Works (part) 13 - Ministry of Transport - PMO Dept. for Urban Areas 9 - Ministry of Infrastructure and Transport 20 F. Bassanini Government Reform in Italy

Reorganization of Central Government 6 - from 18 to 12 Ministries IV 3 “SOCIO-CULTURAL” MINISTRIES PRESENT ORGANIZATION AFTER THE REFORM 14 - Ministry of Employment and Social Security 10 - Ministry of Employment, Health 15 - Ministry of Health and Social Policies - PMO Dept. of Social Affairs 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 Entertainment 12 - Ministry of Heritage and Culture 21 F. Bassanini Government Reform in Italy

Reorganization of Central Government 7 - Other Reform parts l “Junior” Ministers (e. g. : Foreign Trade, Health) l “Agenzie”: non-ministerial bodies with technical and executive tasks l “Central Government Local Offices”: the “aircraft carrier” model l A more flexible, “delegislated”, internal organization: from the traditional “pyramid model” to Departments 22 F. Bassanini Government Reform in Italy

Civil Service Reform 1 - distinguishing Politics from Administration l “Politicians are responsible for Policies”: no more direct involvement in administration l Tasks of political Authority: defining policies and strategies; assessing results; appointing directors general l “Managers are responsible for Administration”: managers are given broader powers, higher salaries but also greater responsibilities (see next) 23 F. Bassanini Government Reform in Italy

Civil Service Reform 2 - the “privatization” of Civil Service l Civil law for civil servants l 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”. l The ARAN: An Agency to represent the State in labor negotiations l Reform of labor representation l Jurisdiction for civil service disputes: since 1998 has moved from the Administrative to the Civil Courts 24 F. Bassanini Government Reform in Italy

Performance-oriented public sector management 1 - the new approach l Before: a formal/juridical approach to government: compliance with laws and procedures without regard to quality and results l 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 25 F. Bassanini Government Reform in Italy

Performance-oriented public sector management 2 - no more “jobs for life” l All managers will be appointed for a fixed term (2 to 7 years) l Managers may be removed for poor performance l 5% of all State managers may be chosen from outside the Civil Service 26 F. Bassanini Government Reform in Italy

Performance-oriented public sector management 3 - the new performance evaluation system l An annual definition of objectives l An Internal Audit Unit in every Ministry or Agency l Strategy and Performance Evaluation l A Central Unit for assessing policy and programme effectiveness l Database with Ministers’ directives and performance indicators l Public Service Charters l Towards quality standards and performance evaluation 27 at European level F. Bassanini Government Reform in Italy

The new Public Budgeting 1 – from financial to economic budget l Before: a segmented spending model l Now: financial allocations matching each Ministry’s targets and responsibilities l Definition in terms of “economic function of expenditure”: clearer justification for spending 28 F. Bassanini Government Reform in Italy

The new Public Budgeting 2 - new expenditure units l The “unità previsionali di base” - new basic budget units l Only one administrative office responsible for each basic unit l New economic budget showing the link between use of resources and achievements 29 F. Bassanini Government Reform in Italy

The new Public Budgeting 3 - spending procedures l Drawing up the budget: no more traditional criteria of incremental spending l An effective cost analysis to back the annual finance law and the spending legislation l More effective constraints on Government expenditure bills and parliamentary amendments l New spending procedures 30 F. Bassanini Government Reform in Italy

A comprehensible Government l The “Manuale di stile” (Style Manual): a practical tool for employees involved in written communication l Simplifying administrative jargon: proposals for the standardization and simplification of the most common official forms l The Bill on “Institutional Communication” 31 F. Bassanini Government Reform in Italy

A transparent Government Since 1990 Administrative Procedure Law n. 241: access to administrative acts is the rule, secrecy is the exception 32 F. Bassanini Government Reform in Italy

e-Government l IT: the best resource for a step change in quality l Electronic signature l Electronic management of administrative documents, procedures and archives l Electronic ID card l An Single Administrative Network l The “Portale Unico”: a single gateway for public administrations l Towards electronic public procurements 33 F. Bassanini Government Reform in Italy

First Achievements l l l 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 34 F. Bassanini Government Reform in Italy

First Achievements 1 - personnel cost (% of GDP) Source: OECD and Italy DPEF 2000 -2003 35 F. Bassanini Government Reform in Italy

First Achievements 2 - Public Administration deficit (% of GDP) Source: Italy - DPEF 2000 -2003 36 F. Bassanini Government Reform in Italy

First Achievements 3 - Public debt (% of GDP) Source: Italy - DPEF 2000 -2003 37 F. Bassanini Government Reform in Italy

First Achievements 4 - Public Administration revenues and primary expenditures (% of GDP) CURRENT REVENUES TOTAL PRIMARY EXPEND. 38 Source: ISTAT and EU Commission F. Bassanini Government Reform in Italy

First Achievements 5 - Certificate decrease per year Source: Department of Public Function 39 F. Bassanini Government Reform in Italy

First Achievements 6 - Certificate decrease in 17 cities : Jan/1996 -Jan/2000 Source: Department of Public Function 40 F. Bassanini Government Reform in Italy

First Achievements 7 - Certified signature decrease per year Source: Department of Public Function 41 F. Bassanini Government Reform in Italy

First Achievements 8 – Reform knowledge Do you know Bassanini’s reform? Source: Department of Public Function 42 F. Bassanini Government Reform in Italy

First Achievements 9 – Reform evaluation Has the Bassanini’s reform improved the functionality of the local government? 43 Source: Unicab - Sole 24 Ore 6. 3. 2000 F. Bassanini Government Reform in Italy

The Future of the Reform l The crucial phase of implementation l Communication information sharing and involvement to maintain a general consensus on the Reform l Training to improve awareness among the main interpreters of the Reform: Regional and Local Government, public managers and employees l The “EURO example” Italy is a country capable of finding hidden human resources to face the most difficult tasks. The “Maastricht approach” 44 F. Bassanini Government Reform in Italy