CONTEMPORARY CHALLENGES AND APPROACHES TO QUALITY IN PUBLIC ADMINISTRATION

Gordana Žurga

Dr. GORDANA ŽURGA Faculty of Organisation Studies, Novo mesto, Slovenia gordana.zurga@siol.net

CONTEMPORARY CHALLENGES AND APPROACHES TO QUALITY IN PUBLIC ADMINISTRATION A EUROPEAN AND NATIONAL PERSPECTIVE Prethodno priopćenje / Preliminary report Summary Contemporary challenges and approaches to quality in public administration are very much influenced by the latest economic crises – not only in respect of financing, but also regarding tasks and roles of the state for further development of their economies and society. While the first reaction of many countries affected by the economic crisis was to cut the expenses of their public administrations, approaches now go more in the direction of centralized priority setting, through supporting the most effective government programmes while cutting the noneffective programmes. More long-term measures and reforms are being explored and exercised to ensure sustainable public administration that will contribute to a sustainable national economy and prosperity of the society. Nevertheless, besides substantial changes in the availability of resources, countries also face changed demands for public services due to major changes in society and in the established patterns of life.

In the paper, contemporary approaches to addressing the new challenges to public administrations will be presented and discussed, and illustrated at the levels of the European Union and the member states. Special emphasis will be given to quality management initiatives and projects in public administrations of the EU. Keywords: competitiveness, efficiency, innovation, stability, sustainability.

1. INTRODUCTION Having in mind quality management (QM) in public administrations (PA) and quality of public services, it has to be emphasized that already before the crises some emerging problems have been exposed such as demographic changes, ageing of the workforce, changes in labour markets, new demands for public services such as health and social security services, demands for changing existing pension systems, etc. Solutions to these problems have been seeking by the states more or less intense pending on how seriously they had been taken into account, and on priorities of political management and other stakeholders.

Consequently, when the crisis emerged (some of) the problems have already been piled to such extend that it was practically impossible to cope with them all and at the same time, and majority of the already existing problems have gained new – crisis dimension. Due to the complexity and pervasiveness of the crisis, state governments have gotten the role of crisis manager [12]; many states initiated the process of redefining the role of government and its administration under the changed conditions of economic operations.

In the paper, special attention is given to quality management as a mean for strengthening the administrative capacity for improving effectiveness and efficiency of the government and its apparatus. Therefore, the main research question considered in the paper is how to ensure 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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appropriateness and sustainability of public administrations to effectively support their political management in assuring further development and prosperity of a state. In this respect, special attention will be given to quality management in public administrations and to QM initiatives and projects in the European Union (EU). The research methodology used is a combination of explorative and case study approaches. In this respect we analyse the role of political management and their public administrations in contributing to national competitiveness, the ways how performance of governments and their respective administrations is being reflected in the international arena, as well as the initiatives and projects taken to address contemporary challenges to public administrations and their performance at national and international levels. On the bases of the analysis and the discussion we establish sustainable public administration model, present findings and conclusions as well as institutional implications.

2. QUALITY MANAGEMENT IN PUBLIC ADMINISTRATION IN THE EU – BEFORE AND AFTER THE EMERGENCE OF WORLD ECONOMIC CRISIS Comprehensive development in the field of quality management in public administrations has been achieved in the last some decades. Establishing business excellence was defined as one of the four new public management models [6], and was substantially developed since then.

Different aspects of quality management in public administrations were explored, oriented towards customers of public administrations [11], usage of quality management tools in public administrations [3, 22, 27], ethics and integrity [2, 10], or comparing the developments at national level [1, 27]. Alongside the development of quality management as a discipline, demands and expectations on side of customers developed and evolved into the right to good administration becoming increasingly considered as a basic human right [9, 15], having severe implications towards public managers: public managers have to become aware of their responsibility for quality public services, a responsibility that will not only be declarative but also pecuniary in the future [28].

Development of quality management in public administrations had strong support also at the level of international organizations (OECD, World Bank, IMD, and others) and European integrations. Different kinds of researches were conducted in respect to the role of public administration in the context of economic growth and competitiveness. As for example, research in 2007 explored links between public administration modernisation, efficiency of public spending, governance and economic growth [19]. The research proved that some governance features are more important for growth, namely: the law and order (including judicial system and control of corruption) and regulation quality.

In late 1990s the European Public Administration Network (EUPAN) was established; quality management in public administrations in the EU is core area of the Innovative Public Services Group (IPSG) of the EUPAN and is supporting development and learning at international, national as well as at organizational level. One of important elements in this respect is effectively managing the change. From the methodological point important development has been achieved in respect to quality management principles and instruments. Two the most recognisable products of the IPSG are CAF (Common Assessment Framework) and European quality conferences.

A comprehensive comparative analysis of quality management in public administrations in the EU performed in 2008 confirmed that quality has become an indispensable part of national public administrations development being incorporated in strategic and developmental documents and plans [27]. Another EUPAN study was exploring the 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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contribution of national public administrations to the realization of the Lisbon Strategy (LS) goals and possible connections between actions taken and results achieved [26]. The PA areas and reforms initiatives reported by the members states as relevant for supporting national performance were: reduction of administrative burdens (RAB), better regulations (BR), regulatory impact reform (RIA), e-government, integrated back office functions, sharing resources, public administration reform (PAR), quality management (QM), structures, R&D, innovation. Three types of main PA focus were identified in the sense how things were getting done: RAB & BR dominant focus, e-government dominant focus, and PAR /QM / specific sector/policy dominant focus. Although the two 2008 studies were not interdependent, the results clearly showed that the EU member states with longer quality management tradition contributed the most advanced national cases in respect to realization of the Lisbon Strategy goals [25].

The update of the study on public administrations' contribution to the Lisbon Strategy was performed in 2010, after the crisis emerged. It showed that the most significant attention of the member states' National action programmes were changed towards: improving the efficiency and productivity of PA, towards the rationalization of public expenditure and the reduction of time spent in administrative procedures for a better service to citizens and enterprises; incorporating the regulatory reform through regulatory impact assessment and better regulation; reducing the administrative burdens in procedures to enterprises and citizens to improve the work and business environment; strengthening competitiveness; implementing institutional changes to restructuring public sector reducing/merging the number of administrative units or levels, aimed at finding synergies and creating a new and more efficient structure, by means of the removal of overlapping functions; boosting and enabling the innovation as a main support for increasing the productivity in all the economic sectors; enhancing transparency and accountability, opening the information to the citizens in order to explain public actions, and to submit public performance to the evaluation by interested actors [7].

The question how QM in PA, and quality public administration can contribute to national competitiveness became central research and at the same time very practical question to all EU member states and relevant international organizations. It has to be emphasized that the EU member states seek to answer to these kind of challenges also in the context of the Europe 2020 strategy as a European strategy for smart, sustainable and inclusive growth and their contribution in this regard. The task of every member state is to incorporate all EU umbrella objectives in its development plans and adopt appropriate measures [25].

In 2012, comprehensive study was performed for the European Commission, entitled as Excellence in public administration for competitiveness in EU Member States. The study aimed to derive a framework that can be used to assess 'excellence in public administration' – conceived as a well-functioning, efficient and modern administration – with respect to competitiveness [17]. According to the study the tools that have major impacts on the relationship between competitiveness and public sector excellence, most prominently are (1) electronic government, (2) human resources management, (3) performance orientation, (4) service orientation and (5) the institutional re-organisation of administration.

3. ASPECTS AND RESULTS OF GOVERNMENT PERFORMANCE Performance of a state is measured in international context through different macroeconomic indicators and by its position on the world competitiveness ranking lists. These rankings reflect, among other effectiveness of the state and of its political management, and efficiency and capacity of its administration. Importance of roles and activities of governments and their 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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administrations is being reflected in different competitiveness indices where their compound structures suggest the importance of individual aspects of government activities to the competitiveness of national economy.

(C) Corruption and fraud

(G) Efficiency of civil justice

TI Corruption ranking 2012 (N=176)

(2) 4 13 9 12 1 1 17 25 25 16 22 32 54 41 46 30 72 33 46 62 37 66 75 62 94 29 54 43

(B) Tools for administrative modernisation

(1) 5 9 11 12 13 17 18 20 21 25 29 31 33 34 36 39 40 41 45 47 51 53 54 57 58 NA NA NA

(A) General governance

WEF GCI 2012-2013 (N=144)

Sweden Germany The Netherlands Luxembourg Denmark Finland United Kingdom Ireland Austria Belgium France Estonia Czech Republic Poland Lithuania Spain Italy Portugal Hungary Slovak Republic Slovenia Romania Bulgaria Croatia Greece Cyprus Latvia Malta

IMD 2012 Rank (N=59)

Table 1: Selected aspects of government performance for the EU and Croatia

(3) + 0.38 + 0.12 + 0.25 + 0.24 + 0.44 + 0.47 + 0.17 + 0.06 + 0.32 + 0.18 + 0.12 + 0.02 - 0.08 - 0.21 - 0.21 - 0.09 - 0.30 - 0.06 - 0.22 - 0.15 - 0.07 - 0.47 - 0.53 NA - 0.30 + 0.14 - 0.22 - 0.01

(4) + 0.34 + 0.11 + 0.20 - 0.36 + 0.34 + 0.34 + 0.39 + 0.04 + 0.08 - 0.23 - 0.12 + 0.22 + 0.31 - 0.04 - 0.18 - 0.07 + 0.00 - 0.00 - 0.36 + 0.01 - 0.08 - 0.25 - 0.21 NA - 0.41 - 0.16 + 0.12 NA

(5) + 0.37 + 0.22 + 0.33 + 0.32 + 0.39 + 0.32 + 0.28 + 0.27 + 0.09 + 0.21 + 0.20 + 0.14 - 0.35 - 0.10 - 0.41 + 0.08 - 0.18 + 0.06 - 0.33 - 0.50 - 0.02 - 0.53 - 0.45 NA - 0.31 + 0.08 - 0.23 + 0.07

(6) + 0.00 + 0,26 + 0.14 + 0.26 + 0.19 + 0.30 + 0.15 + 0.11 + 0.18 + 0.15 + 0.10 - 0.01 - 0.30 - 0.08 - 0.02 + 0.02 - 0.30 + 0.03 + 0.04 - 0.38 - 0.16 - 0.28 - 0.25 NA - 0.09 + 0.07 - 0.12 NA

(7) 4 6 5 22 12 3 8 27 16 17 21 34 39 41 45 36 42 49 60 71 56 78 62 81 96 58 55 47

Sources: IMD [8] (column 1), WEF – World Economic Forum [20] (column 2), Pitlik et al.

[17] (columns 3-6), TI – Transparency International [21] (column 7) Legend: NA – not available The above mentioned study on excellence in public administrations defines an empirical framework to assess elements of public administrations which appear to be the most 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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important for a business-friendly environment. The seven elements are: General governance (A), Tools for administrative modernisation (B), Corruption and fraud (C), Starting a business and licensing (D), Public procurement (E), Tax compliance and tax administration (F), and Efficiency of civil justice (G), among them the first three (A, B and C) having “overarching influences that affect the quality of public administration and its relation to the business environment” [17]. Besides the EU member states also Croatia was included in the study although not used in the calculation of the EU averages.

In the Table 1 we present different aspects of government performance, and combine indices and data from different sources. The countries (EU member states and Croatia) are listed in accordance to their ranking on the IMD's competitiveness scoreboard 2012. Additionally, the WEF's Global competitiveness index GCI is presented, four elements from the EC's study on excellence in public administration (A, B, C and G), and the corruption ranking according to the Transparency International 2012. The four elements from the 2012 study were selected due to following reasons: General governance as it reflects the multi-dimensional concept of administration quality, Tools for administrative modernisation refers to the use of instruments to enhance the capacities of the administration, and maps developments in the general sophistication of service provision, Corruption and fraud that maps assessments of the extent to which the powers of government and administration are exercised for private gain, covering all forms of corruption, including state capture by vested private interests, and Efficiency of Civil justice, referring to a wide range from property rights and enforcing contracts to fairness and impartiality of the legal system. These four elements are presented as normalised values to 0-1 scale and additionally coloured; positive (green, +) values are better than the EU average, negative (red, -) values are worse than the EU average.

4. CONTENPORARY TRENDS IN FURTHER DEVELOPMENT OF QUALITY MANAGEMENT IN PUBLIC ADMINISTRATION IN THE EU In this chapter we present some prevailing aspects of further development of quality public administration addressing stability, innovation and sustainability.

In the present time still being marked by financial crisis and examining the roles of states and their public administrations, search for stability or 'ultra-stability' (according to Metcalfe [12]) of the systems seems to be at most important: simultaneous realization of structural changes and reforms at the system level at the same time as constantly improving the performance at the organizational level, through a serious of incremental changes. The current economic situation indeed requires both types of changes, as well as systems, organizations and individuals who are qualified to implement both types of changes. However, reforms and structural changes may not always be achieved in short time, especially if they are – according to Pollitt [18] – connected to cultural change, involve changes to existing patterns, and require "retraining of large number of professional staff to work in new ways", among others. The aspect of stability is very much emphasized by all international actors, including the European Commission and OECD. To successfully address the future, innovation is required also in public administration. As declared in the OECD innovation strategy [13], innovation must be a priority in order to provide new solutions, and people should be empowered to innovate. Following the OECD's definition, innovation in public service delivery is "the implementation of new or significantly improved ways of providing goods and services" [ibid]. From the methodological point of view, learning, innovation and sustained success are all basic parts of the QM models and tools.

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Innovation in quality public services delivery can therefore principally not be found in the existing patterns and ways of operating but in opening for the new solutions and establishing partnerships. However, one has to be aware that open concepts are connected to risk taking so appropriate risk management has to be in place as well as an appropriate level of regulation and control mechanisms to assure the credibility of the system as well as of the individual actors.

Searching for innovation in an organization requires a serious approach of the organizational management otherwise cannot be sustained. Innovation by its definition means something new and can bring disturbances to the regular operation – it is therefore necessary to be integrated into the organizational modernisation and developmental processes.

Another important keyword is sustainable public administration. We can lean the definition of sustainable public administration on the definition of sustainable development as a "development that meets the needs of the present without compromising the ability of future generation to meet their own needs" [16]. From the methodological point of view, sustainability in the field of quality management in public administration is incorporated in ISO 9000 quality standards and in EFQM and CAF excellence models. All three have feedback loops in respect to learning and innovation. Indeed, to guarantee organizational development and sustainability, public administration organizations have to become learning organizations. The OECD's study [14] proved that learning organizations are positively associated with in-house innovation what is – again – part of the QM models and tools.

The economic and financial crisis very much influenced the agenda of member states in respect to their public administrations. Immediate responses were directed into linear cutting and later, into improving efficiency and in centralized priorities setting [18]. At the EU level, in the work agenda of the European Public Administrations Network EUPAN the crisis situation was reflected in the Medium Term Priorities (MTP) and work programmes.

Horizontal themes of the last three MTPs are: A performing, sustainable public administration serving the citizens (01.2010 – 06.2011) [5], An open, adaptable and performing public administration (07.2011 – 12.2012) and Delivering a more resilient, professional and responsive public administration to the citizen (01.2013 – 06.2014) [4].

Three pillars of the current MTP are A “fit for purpose” public administration (resilient PA); Role of HR in shaping public administration (professional PA), and Connecting to the citizen (responsive PA). Themes and projects included in the EUPAN's work plans very much influence the national PA agenda.

Table 2: Medium Term Priorities of the EUPAN, with selected topics of the IPSG MTP 01.2010 – 06.2011: A performing, sustainable public administration serving the citizens − A performing public administration: quality management (CAF, quality conference), prerequisites for improved performance orientation (survey on performance assessment), public administrations' contribution to growth and competitiveness; − Administration serving the citizens: customer focus, reduction of administrative burdens; − A sustainable public administration: financial stability and sustainability of PAs MTP 07.2011 – 12.2012: An open, adaptable and performing public administration − In the wake of the crisis: impact on the reform agenda, impact on HR, role of top executives during times of crisis and its aftermath − Top executives: role of think-tanks in supporting decision making processes, top executives as enablers of change and innovation, performance contract models; 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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− Governing a performing organisation: effectiveness of ethics and trust measures, building a positive image of civil service, effective implementation of reforms and follow-up, involvement of citizens in follow-up and evaluation of reforms, quality management; MTP 01.2013 – 06.2014: Delivering a more resilient, professional and responsive public administration to the citizen − A “fit for purpose” public administration (resilient PA): implementation, monitoring and evaluation of reform in PA, quality management initiatives; − Role of HR in shaping public administration (professional PA): performance management and evaluation systems; − Connecting to the citizen (responsive PA): transparent and open PA, citizen focused initiatives across member states.

Sources: EUPAN Medium Term Priorities [5], Minutes of the HRWG/IPSG Limassol [4], www.eupan.eu 5. FROM ANALYSIS TO SYNTHESIS: IN SEARCH FOR SUSTAINABLE PUBLIC ADMINISTRATION The framework for defining the sustainability of public administrations includes and requires clear definition of scope of their operations and responsibility for the results, establishing culture for innovation and continuous improvement, and establishing public administration organizations as learning organizations. The right balance between changes at the system level and at organizational level is to be defined – in this respect, innovation is seen as an important source for both types of changes. Not every innovation requires structural changes at the system level; it may require changes at organizational level (break-through projects) or it addresses fine tuning according to the incremental method [23].

Taking into consideration contemporary challenges that require not only new approaches and solutions in providing public services, but also highly productive and results-oriented functioning, the basic elements of sustainable public administration can be defined as innovation, continuous improvement at organizational level, and structural changes at system level.

Innovation in the sense of searching for and implementation of new or significantly improved ways of public goods and services provision has to become a value, and culture of innovation needs to be incorporated into functioning of public administration system at all levels. This consequently means that innovation is everyone's matter, and the public administration system needs to become an environment that stimulates innovation. It is important that this kind of system is institutionalized – innovation should not be understood as a disturbance but as s fundamental guideline.

Continuous improvement in PA organizations is in the EU member states quite well developed. Although the different tradition in this area it is beyond any doubt that some QM tools as for instance Common Assessment Framework CAF, customer satisfaction management or benchmarking, bench learning and exchange of good practices are broadly utilised and deployed [24]. However, it still requires additional mechanisms to institutionalize the continuous improvement as a common and usual way of functioning in PA and not as an exception. Basic principles in this respect are connected to PA organizations with high performance, and that are well led, are strategic, are accountable, oriented into results, to their customers and citizens, involve their employees and stakeholders, are innovative, constantly improve, effectively use information and knowledge, and act and develop as learning 13. HRVATSKA KONFERENCIJA O KVALITETI I 4. ZNANSTVENI SKUP HRVATSKOG DRUŠTVA ZA KVALITETU, Brijuni 9. – 11. svibnja 2013. g.

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organizations. Responsibility for results is personalized at all levels, organization is achieving its goals and effectively uses the resources.

Figure 1: Sustainable public administration model SUSTAINABILITY in following the consensually agreed further developmental goals of the state

Continuous improvement of services and performance, through incremental changes or breakthrough projects

New services New assortments of public services New relationships New ways of financing New institutions

Operation of a new structure / institution is from the beginning set on the principles of high performance and continuous improvement

LEARNING AND ORGANIZATIONAL DEVELOPMENT

Structural changes in the system are meant as those kind or changes in PA system (and broader, in the public sector) that are to be implemented when (new) problems require radically new solutions. Need for these kinds of changes often derive from performance comparisons at international level. This requires established mechanisms of constant checking the performance in international context, and search for solutions through democratic dialogue between all relevant stakeholders in which political management of a state bears important role.

All three elements of the model: Innovation, Continuous improvement in PA organisations and Structural changes in the system, are highly interrelated. The overlapping section between the three joint sections (indicated in the Figure 1 by dark grey) is defined as SUSTAINABILITY in following the consensually agreed further developmental goals of the state. It means that the sustainability of the public administration system is being provided through clearly determined joint plans and rules of conduct, is constantly being checked, and (corrective) actions and measures are being adopted based on the measured results of the checks performed.

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As a feed-back loop, constant learning and organizational development is incorporated in the model aiming in ensuring constant improving of the individual elements of the system of public administration as well as of the system as a whole.

6. CONCLUSIONS AND IMPLICATIONS Based on the discussion and the sustainable public administration model three main conclusions are to be emphasized: 1. The more public administrations are strategic and performance oriented the more effectively they can support their political management in implementing state’s development goals.

2. Achieving sustainability in order to ensure administrative capacity to effectively address current and future challenges require appropriate balance between structural and incremental changes in the system, fostering innovation and building culture of innovation and change that is not only declarative but properly institutionalized as well.

3. Public administration organizations that act according to principles of total quality management are adequately prepared for coping with changes of practically any kind. To mention only a few examples: they are practicing customer/ citizen orientation not only through their products and services but also through different kind of citizen involvement into consultation and decision making processes, including setting the strategic objectives and designing the processes in a way that they do not cause administrative obstacles.

However, it is a challenge for a public administration system to effectively adapt to changed demands especially in conditions of low administrative capacity. It is therefore crucial for states and their political management to increase government efficiency as compared in international context to adequately support its economy as well as the citizens.

Several institutional implications can be derived from the research conducted. They are related to national and international levels and actions. At international level, important implication is connected to further work of the EUPAN and possible connections of its activities within the working groups to the Europe 2020 strategy’s goals and initiatives. At the MS level, institutional implications are related to strengthening public management and quality management in this context to ensure successful co-ordination between the roles that states have in respect to their economies. Important implication is in finding the right balance between structural reforms and managing the already existing processes and structures. In strengthening the administrative capacity of public administrations divergent approaches to overcome the gap between increasing complexity and ability of governments to control this complexity is needed.

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