Rebuilding trust following the economic crash


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Presentation by Pall Thorhallsson at the OECD Workshop on “Joint Learning for an OECD Trust Strategy” on 14 October 2013. Mr. Thorhallsson discusses the pre-crash situation, the nature of the 2008 crash, and the crash's impact on trust. He also mentions reasons for the lacking trust.

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Rebuilding trust following the economic crash

  1. 1. Rebuilding trust following the economic crash Pall Thorhallsson, Director General, Prime Minister´s Office
  2. 2. Pre-crash situation • Trust in public institutions generally high • High voter turnout • Iceland considered to be relatively free from corruption
  3. 3. The nature of the 2008 crash • • • • • All major banks collapsed The currency fell dramatically Housing loans skyrocketed Moral and political crisis Huge disillusionment and anger towards bankers and the authorities
  4. 4. Political landscape • 2009-2013 First purely left-wing government in the history of the republic • 2013-? The center- and right-wing parties are back in power again
  5. 5. 2009-2013 – investigations and accountability • Unprecedented parliamentary investigation of the causes of the collapse • Former Prime Minister taken to State Court • Criminal investigation of the banks, several hundred cases
  6. 6. 2009-2013 - reform projects • Constitutional reform process with a directly elected constitutional convention • Revised information law, granting wider access to public documents • Ethical codes for the public service with a lawbased coordination committee • School of central government created • Improved selection procedure for toppositions in the civil service
  7. 7. 2009-2013 other reform and developments • EU accession bid • Attempts to revise the fishing quota system and make the quota owners pay more to the State • Restructuring of banks, companies and private household debts • Presidential power increases • Crisis in relations with UK and NL (Icesave)
  8. 8. Preliminary results? • Some reforms were adopted • For others the former government did not have enough time or inner strength to complete them • Remains to be seen what the new government aims to do in the field of governance reform
  9. 9. Impact on trust • Trust in institutions remains relatively high • Trust in politicians is very low • Voter turnout is still relatively high
  10. 10. Reasons for lack of trust • 79% mention the political culture, political fight and disrespect instead of cooperation • 72% mention working methods in Parliament, Parliament not listening to the people, not having the right priorities (Survey commissioned by Parliament)
  11. 11. Preliminary lessons • The crisis created opportunities for reform • Reforms which enjoy broad political support (which may be hard to create) have bigger chance of success • Need to manage expectations, cf. the constitutional reform which failed