Quality of governance in Southern Europe is weak and deteriorating

When measuring the performance of public administration, there are many options for presenting outcomes. The outcome index applied in our research captures ‘good governance’. For the purposes of this study, we consider the World Bank index of good governance to be the most appropriate indicator. It comprises the following six components:

A frequently heard criticism of this index is its subjective nature, but to our knowledge, a comparable objective index is not available.

Northern Europe scored especially well on good governance in 2013, followed by Oceania, Western Europe, Northern America and Eastern Asia. Central and Eastern Europe and Southern Europe obtained the lowest scores. As for individual countries, Finland, Norway, New Zealand, Sweden, and Denmark ranked the highest and the lowest scores were obtained by Bulgaria, Romania and Greece.

Notes: Data from World Bank. The WGI outcome index combines the six World Bank good governance indicators that reflect accountability, control of corruption, rule of law, government effectiveness, political stability and regulatory quality in our selected countries. The figures are normalized scores (with zero mean and unit variance), calculated for 215 countries in the World. Because Western countries generally perform better, the mean score of our 36 selected countries is higher (between 0,8 and 1,25, depending on type of indicator). Because scores are normalized, only relative comparisons can be made. However, according to statements of the World Bank relative positions reflect approximately absolute positions.

Not only is the quality of public administration in Southern Europe low, it has deteriorated further during the past decade.

Countries in Western and especially Northern Europe perform best on good governance. Countries in Oceania, North America and Japan perform well. In contrast, good governance is less well provided in Southern, Central and Eastern European countries. France and the United Kingdom are characterised by having less political stability than other Western countries. The same applies to the United States. Finland has improved its governance score through better regulatory quality, and Sweden by rooting out corruption. This shows that even countries with high levels of good governance can still improve their performance.

Not only is the quality of public administration in Southern Europe low, it has deteriorated further during the past decade. Greece, for example, suffered a notable decrease in the ranking of good governance during the period 2005-2010, especially with regard to political stability, control of corruption and regulatory quality. Within Southern Europe, compliance with the rule of law and control of corruption has decreased the most in Italy. Spain saw the largest drop in political stability and regulatory quality declined most in Portugal. These countries share an authoritarian past and, as a result, there are similarities in their democratisation processes. Efforts to modernise public administration can be hampered by the various legacies associated with the struggle to overcome this authoritarian past (Galanti 2011). Another explanation of Southern Europe's poor performance may be the financial and economic crises starting in 2008, which present an additional obstacle on the route of Southern countries to good governance.

Since 1996, Greece, Portugal and Italy have shown the largest decreases in the public administration outcome index, while Croatia, Latvia and Estonia have seen the largest increases.

In general, between 1996 and 2013, performance on good governance declined in Southern and Western Europe (except for Malta and Switzerland) and also in Northern America. In contrast, Central and Eastern Europe (except for Hungary and Slovenia) along with Eastern Asia experienced an increase in good governance scores. Northern Europe and Oceania had stable high scores. Since 1996, Greece, Portugal and Italy have shown the largest decreases, while Croatia, Latvia and Estonia have seen the largest increases on good governance. Slovakia, Japan and Korea also improved on good governance.

The full report presents the developments in the six components of good governance in more detail, based on rankings of countries. When a country's performance on an individual component is compared with its overall achievement, we find several instances of relatively poor results. This was the case for voice and accountability in Finland; political stability in Denmark, France and the United States; government effectiveness in New Zealand; and regulatory quality in Norway and Slovenia. The same comparison also provides examples of relatively outstanding performance: political stability was remarkable in Austria, Slovakia and the Czech Republic and the United Kingdom did well on regulatory quality.

We have observed notable improvements in the rankings of several countries on all components: Switzerland and Estonia on voice and accountability; New Zealand, Poland, Slovakia, Lithuania and Croatia on political stability; Japan and Finland on government effectiveness; Sweden, Finland and Australia on regulatory quality; and Estonia on both rule of law and control of corruption. Because of its improvements on several components, Estonia climbed by far the most in the overall ranking. We have found that performance worsened on most components in Southern Europe, except Malta and Cyprus. We have also observed a decrease in the political stability component in Denmark and Ireland and in regulatory quality in Cyprus, the United States and Slovenia.

Why does good governance differ so much between countries? While making an effort to explain these differences, we had to limit ourselves to an analysis of annual outcomes. As a result, statistical relationships could be assessed, but causal relationships were not studied. Three characteristics stood out as the most interesting and significant factors: professionalism (the extent to which bureaucracies are “professional” as opposed to “politicised”), freedom of the press (representing the controlling power of feedback) and GDP per capita. Higher welfare, measured by GDP, is one of the enabling factors for better governance because it promotes political stability and a stricter application of the rule of law and curbs corruption. Together these three factors are responsible for about 90% of the differences between countries in the field of good governance in 2013.

Read the full chapter on public administration in Public sector achievement in 36 countries.

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