The reform of the state in the troika and in the post-troika periods

The reform of the state has been set as one of the primary goals of the adjustment program, as a way to avoid future problems of this sort. The notion of reform of the state is very broad, and different meanings have been attached to it: better functioning of the civil service structure (how the Government does it), redefinition of the scope of Government intervention (what the Government does) and the depth of Government intervention (which part is done by the Government and which part is done by the private sector). This way of splitting the several notions of Government reform has never been clear in the political (and policy) discussions about the reform of the state. The document the Government made publicly available is, in this respect, a mix of all three, in a random order, as it clearly resulted from joining contributions from different sources (ministries, I guess).

The changes during the troika period along these dimensions were uneven.

On the internal procedures of the Government, several measures have been adopted to increased the control of the ministry of finance over the spending ability of individual organisms inside civil service, which are expected to have a long term effect, and many short-term measures (restrictions on what can be done, and how much can be spent) were implemented. Still, a long road waits for the post-troika period. In particular, one point that has been mentioned in several discussions about the issue (check the Sextas da Reforma debates) is the fragmentation of relationships between civil service organisms and the ministry of finance.

In terms of redefining the scope of Government, there was no mention about it but for some privatizations that were set as a commitment in the Memorandum of Understanding. In all other areas, in the several documents produced, it was very clear that each minister had (has) if anything a desire to increase the scope of intervention. The discussion of the scope of Government is unlikely to occur in the post-troika period.

Finally, the depth of intervention was the area where more discussion took place, even though in an unstructured manner. The main example is given by pensions – where cuts and “generational fairness” (largely undefined in their meaning) are a redefinition of the “depth” of public intervention in the pension system.

A different type of action, that has been termed “reform” somewhat too much, is improvement on what the Government does without changing internal procedures, the scope or the depth of intervention – things like changing justice codes, implementing centralized electronic procurement, lowering prices of outsourced services. These hardly constitute a “reform”, they are just better management of what is done. These have been the main focus of action as it is where it becomes easier to find what consultants love, “quick wins”, but they are also easily reversible in the post-troika period.

Overall, some progress has been made, more by outside pressure or by financial pressure, not really on a structured decision making process with engagement of society on state reform. Even the efforts may stop in an election year. What is mostly needed is a process, a political process, by which important decisions on scope and depth of Government intervention need to be discussed and then translated into policy action.

Author: Pedro Pita Barros