A Simple Mechanism to Facilitate Implementation of Reforms

By: Cabolis Christos, Associate Professor of Economics and Finance

There is no doubt that Greece needs structural changes; economists, practitioners, businesspeople and policy experts agree. Scholars and policy makers have identified as priorities changes in the labor market, tax system, and legal environment. Despite the large or small steps that have already been taken, the implementation of this kind of large-scale change is, at best, very slow. We need to look no further than the attempt to initiate the education reform bill in 2011.

In addition to the reforms in public administration, therefore, an equally important point policy makers and practitioners need to address is the implementation mechanism. Frequently, implementation time is reduced by introducing incentives that make the adoption of a change more appealing.Given the conflicting interests of groups affected by the reforms, as well as the magnitude of changes, incentives may be difficult to identify and introduce.

I propose that the outcome from research in corporate governance be borrowed to implement changes in the public administration. Studies in different settings suggest that transparency and accountability in corporate governance lead to more valuable outcomes. In public administration these features can be adopted on a unit by unit basis. Thus, it is not necessary to introduce reforms in a “top down” approach but, and this may be important for Greece, from the “bottom-up.”

In the context of economic policy and public administration, transparency implies a level of openness and communication not only of the actual decisions but, most importantly, of the decision-making process. Important steps towards openness have already been taken in recent years: Project Diavgeia (literally: transparency) requires the government to publish laws and administrative acts of all levels of government on the Internet.

Transparency will enhance reform when, in addition to this information, the ability to investigate and verify the outcome is also allowed. For instance, the metadata of the documents listed in Diavgeia are not searchable for cross referencing and pattern identification.Transparency is complemented by the notion of accountability, which implies that an office or an officer assumes clear responsibility for an action and establishes an entity that will “answer” concerns about actions. Accountability is not to be thought of as a search for a “scapegoat.” On the contrary, the assumption of responsibility has two effects: First, it outlines what a unit can and cannot do. Second, it improves the unit’s performance.

How can transparency and accountability facilitate implementation? On the micro level, the implementation will occur because of pressure by the users of the unit and their social network. Communication and provision of feedback on the Internet is a reality that cannot be overlooked. Whereas we mostly focus on the negative aspects of feedback, as a target on which to project just and unjust complaints, feedback can also be turned into an important method of positive assessment. As it happens in other Internet evaluating methods, in addition to shortfalls, the strong elements of a unit will also become apparent, providing supportive recognition of the work that many public employees do.

Article originally published at Business Partners. See more at: http://bponline.amcham.gr/?p=2593#sthash.tOI3Hft6.dpuf