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2014.03.04 - Naec Seminar_Trust in government


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2014.03.04 - Naec Seminar_Trust in government

  1. 1. New Approaches to Economic Challenges Seminar on Project C1, 4 March 2014 REVISITING THE SOCIAL CONTRACT: REBUILDING TRUST FOR SUSTAINED ECONOMIC RECOVERY TRUST IN GOVERNMENT: ASSESSING THE EVIDENCE, UNDERSTANDING THE POLICIES Mario Marcel Deputy Director, GOV Stéphane Jacobzone Deputy Head of Division, GOV
  2. 2. Trust: an issue for the attention of leaders  "The crisis is calling for a redefinition of the balance between the state and markets, and for new instruments to boost citizens' trust in both." Angel Gurría, Secretary-General  “The world urgently needs to rebuild trust in leaders, in governance systems and among countries if the international community is to shape new models and collaborative approaches to solve global challenges”, closing session of the World Economic Forum’s Summit on the Global Agenda 2011.  “As governments seek to restore long-term growth potential and to address the social impact of the crisis, they also face a significant challenge to restore the trust of citizens and markets in the ability of governments to address current challenges and implement reforms that will deliver fair and resilient growth” OECD MCM Chair’s Summary
  3. 3. What does Trust mean ? • A double dimension for Trust: – An attitude, influenced by experience, that shapes behaviour – A perception • means holding a positive perception about the actions of an individual or an organisation. • Subjective perception, in the eyes of the beholder • Confidence of citizens in the actions of a “government to do what is right and perceived fair” • Not actual, but perceived performance matters
  4. 4. Trust in what and in whom ? • Citizen/customer trust in the public sector: related to other outcome variables: citizen satisfaction with public services, civic engagement, well being, • Public sector trust in citizens customers: matters for policy effectiveness, compliance, taxation, etc.. • Trust within government and the public sector: smarter more effective government
  5. 5. Trust in what, and in whom ? A multi-way relationship Interpersonal trust Trust in private institutions SYSTEMIC TRUST Trust by government in citizens Trust in government
  6. 6. Why does trust matter? • A key foundation upon which political systems are built: it affects government ability to govern • Core levels of trust are necessary for the fair and effective functioning of institutions (adherence to the rule of law)
  7. 7. Trust is key for achieving economic and social outcomes • Trust has the potential to:  Increase confidence in the economy (consumption decisions, job mobility, hiring and investment decisions).  influence individual behaviour in ways that support policy outcomes and effectiveness (health, social policies, innovation the environment, taxation, regulation, private pensions, stock market participation).  Mitigate the possibilities of free riding and opportunistic behaviour and helps achieve positive expectations of longer term policy outcomes  Improve compliance with rules and regulations and reduce the cost of enforcement  Contribute to interpersonal trust, and reduce the transaction costs of doing business  Help government to implement structural reforms with long term benefits
  8. 8. Economic Policy-making Source: Győrffy (2013)
  9. 9. Trust and the policy cycle Consulting with citizens/Businesses Design Acceptance/ rejection of reform Listening to clients / users Ex post evaluation TRUST Measuring Performance Implementation Compliance Delivering results Citizen satisfaction
  10. 10. Positive effects on compliance • The more directors perceive inspectors trust them, the higher their compliance at next inspection (Braithwaite & Makkai, 1994) • The more tax payers trust the tax inspector, the higher their intention to comply (Murphy, 2004; Murphy et al, 2009) • When mining inspectors were „ordered‟ to distrust mining firms instead of a more cooperative approach, both parties agreed that over time mining safety had declined (Gunningham & Sinclair, 2009) Source: Six (2013)
  11. 11. Mistrust and regulation Aghion et al. (). In countries with a high level of distrust there is much more regulation. In countries where there is a lot of mistrust there is a huge demand of regulation. Paola Sapienza 11
  12. 12. Mistrust and demand for regulation where there is a lot of mistrust there is a huge demand of regulation. 12
  13. 13. Trust and stock market participation .4 australia .3 new zealand united kingdom of great britain and nort japan denmark united states of america canada .2 sweden norway switzerland ireland portugal finland france netherlands .1 taiwan province of china greece singapore germany italy austria belgium india 0 turkey 0 .2 .4 Trust Source: Sapienza et al. (2013), Kellog School of Management .6 .8
  14. 14. Trust in the crisis • Dutch proverb: Trust comes on foot and leaves on horseback • Many countries were badly affected by the crisis • Still coping with the consequences • What can governments do to restore or grow trust to the level needed to support sustained and inclusive growth ?
  16. 16. Understanding and monitoring trust  A key concern for centres of government  A concern for private companies (Edelman trust barometer  Social science : link with behavioral economics
  17. 17. What are the available tools?  National surveys: Pew data (US), IPSOS Mori, Metroscopia  Existing cross national instruments and their limits International surveys measuring trust or confidence in government Number of OECD countries covered Name of Survey Years covered and frequency Measurement Answer scale 34 2005-2012 (annually) Confidence in national government 2: yes / no World Values Survey 25 4 waves: 1989-93; 1994-98; 1999-2004; 2005-08. Confidence in the government 4: : a great deal / quite a lot / not very much / not at all Eurobarometer 23 2003-2013 (biannually) Trust in government 2: tend to trust / tend not to trust World Gallup Poll Edelman Trust Barometer 15 2001-2013 (annually) Trust in government 9 point scale: 1 means “do not trust at all” and 9 means “trust them a great deal” Latinobarómetro 3 1995-2012 (annually) Trust in government 4: a lot / some / a little / no trust
  18. 18. Many countries have suffered Confidence in national government in 2012 and its change since 2007 % in 2012 (right axis) 100 Percentage points Percentage point change 2007-2012 (left axis) % 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 -10 -10 -20 -20 -30 -30 -40 -40 Source: Gallup World Poll
  19. 19. Trust and perception of corruption Correlation: confidence in national government and perception of government corruption (2012) % 100 CZE GRC PRT 90 R² = 0.80 KOR ESP ISR HUN USA SVN POL SVK ISL AUT JPN CHL OECD BEL EST MEX IRL FRA DEU 80 Government corruption ITA 70 60 50 TUR CAN GBR 40 30 AUS NLD NOR FIN NZL 20 DNK 10 LUX CHE SWE 0 0 10 20 30 40 50 60 Confidence in national government Source: Gallup World Poll 70 80 90 100 %
  20. 20. Trust and satisfaction with public services Confidence and satisfaction across government institutions (2012) Source: Gallup World Poll
  21. 21. Correlation with consumer sentiment US Historical Data Short term fluctuations in trust appear to be correlated with trends in consumer sentiment • Pew Research Center, March 2011. Percent trusting government to do what is right always or most of the time. • Consumer Sentiment: Reuters/Univ. Of Michigan Survey of consumers, index of consumer Sentiment.
  23. 23. Building the foundations of trust What are the policy drivers ? • Economic and social policy outcomes: – Economic prospects – Jobs – Actual levels of inequality against perceived acceptable standards • Institutional aspects : government attributes – The how, for whom and with whom matters
  24. 24. What characteristics of government matter?  Reliability: the ability of governments to minimise uncertainty in the economic, social and political environment of their citizens, and to act in a consistent and predictable manner.  Responsiveness: the provision of accessible, efficient and citizenoriented public services that effectively address the needs and expectations of the public.  Openness and inclusiveness: a systemic, comprehensive approach to institutionalising a two-way communication with stakeholders, (providing information, and fostering interaction to improve transparency, accountability and engagement).  Integrity: the alignment of government and public institutions with broader principles and standards of conduct that contribute to safeguarding the public interest while preventing corruption.  Fairness: the consistent treatment of citizens (and businesses) in the policy-making and policy-implementation processes.
  25. 25. Are governments taking action ? • Centre of government survey: 37 % of respondent say that they have a strategy, and 44 % say they have taken action • Governments working on many fronts:
  26. 26. Improving the reliability of government  Managing risks : • Managing fiscal risks to deliver on institutional commitments (pensions). Long term fiscal sustainability • Assessing and monitoring risks, mitigating risks and promoting resilience (OECD Recommendation on the governance of critical risks)  Fostering strategic capacity in the center • Three quarters of center of government survey respondents say that they have a strategy
  27. 27. Improving the reliability of government (cont)  Clear rules, trust and the rule of law • Sound regulatory frameworks are essential • Impact of the judiciary and the rule of law
  28. 28. Responsive government  Perception when receiving services • Closeness to public service providers matters • Example of Citizens First (Canada). Public Sector Value Chain. • “Show your face” for civil servants (Italy) • Barometers of public services (France, Finland, Australia, New Zealand, etc…). • Examples of work on responsiveness in specific areas: health care, waiting times.
  29. 29. Open and Inclusive government  The public sector: a “crystal bowl”? • Access to information, consultation • Limits the scope for waste, abuse and corruption • The “Open Government Partnership” • Open data • Budget transparency • Reaching out to citizens: concrete examples • Estonia: “The People’s Assembly”, crowd sourcing ideas on five key topics, including electoral system and financing of political parties • Iceland: Direct democracy, crowdsourcing the new constitutional bill • Poland: importance of transparency, trust and consultation procedures (OECD Poland PGR 2013)
  30. 30. Integrity and fairness  Integrity is crucial • Policy tools to address high risk areas: conflict of interest, Standard of conducts • Three quarter of countries have a central function for developing and maintaining conflict of interest policies • Revolving door phenomenon: post public employment conditions: cooling off periods • Lobbying to inform public decision making? • Potential for unfair advantages for vocal specific interests when the process lacks transparency and accountability • 5 000 lobbyists registered with EC, 15 000 active in Brussels. In US 3.3 Billion US spending in 2011
  31. 31. Integrity and fairness (cont)  Financing democracy • Money: a necessary component of the democratic process • Risks that unequal access to funding can distort the playing field • Some countries have national regulations to • Balance sources of funding • Introduce bans and limits on certain types of donations • Limit spending during elections • Introducing reporting and transparency requirements • Defining monitoring and enforcement mechanisms • Democratic countries face similar risks
  32. 32. THE WAY FORWARD Building a Trust Agenda
  33. 33. Measuring Trust • Going beyond superficial perceptions to attitudes that matter for predicting future decisions, behavioural economics, nudging • Cooperation with Statistics Committee to build a more solid and policy actionable evidence base COMPONENTS MEASUREMENT-ATTITUDES MEASUREMENTTRUSTWORTHINESS Reliability Actions in relation to commitments, risks and provision of basic services Fairness Acts for the common good, non Perception of fairness in public action: what drives discretionary actions legislation, provisions for senior office holders Integrity Public servants and senior officials are honest, bribery and corruption only exceptional Responsiveness Government lists to people, Actual experience with social conflicts, readiness to complaints followed up, service submit a complaint if not listened to, actual provided in time experience in waiting to access a service Openness/ inclusiveness People understand government Actual experience to access information on the public Access to information rights functioning, Access to public sector Open Data Strategies sector dealings Understanding of policy making process Powers of ombudsman Perception that government has a strategy, prone to listen to government advice Concrete characteristics in terms of long term strategy, risk management, fiscal risks, standards for the delivery of public services Conflict of interest regulation, lobbying, political finance regulation Institutional checks and balances Belief that public authorities obey to the rule of law, Ethical norms, declarations of assets, readiness to offer money to a civil servant to speed up enforcement of corruption things, actual experience of bribe Rules for managing conflicts, providing information to citizens, ombudsman, complaint management
  34. 34. Policy agenda, work in progress • Public governance streams of work: integrity, fairness of policy making processes, lobbying, risk management, fiscal risks • Concrete case studies of trustworthy institutions Connection with national reviews, focus on deeper national experience E.g. Metroscopia in Spain, examples above • Building trust in key public policies tax compliance, effective regulation, education, etc…