Public administration is the key to people’s collective realization of their aspirations and sustainable development. There are seven areas where the public administration is expected to actively undertake responsibility:
1. Securing the rule of law,
2. Creating a level playing ground for competitive markets and macro-economic stability,
3. Ensuring proper investments for fundamental infrastructural initiatives, education, health, and social security programs,
4. Protecting vulnerable segments of the population such as children, elders, disabled, and the like,
5. Protecting future generations’ rights in vital areas such as the environment,
6. Ensuring domestic public security, and
7. Defending the country against external threats.
In order to fulfill these responsibilities, the public authority collects taxes, makes laws, regulations and various rules-making arrangements, and provide oversight for the equal and fair compliance of everyone with these rules.
Improvement in public decision quality returns as increase in per capita
While these regulations are aimed to provide benefits in line with the above purposes, they also impose costs on citizens, companies, and other institutions. In addition, if compliance with the rules cannot be achieved with an egalitarian understanding, it can even provide unfair advantages to those who do not comply, disrupting even the fair competition and social morality, and harming the trust of citizens in public authority.
Working with a mission of “better policies for a better life”, OECD determined 12 basic principles with ‘Recommendation of the Council on Regulatory Policy and Governance’ published in 2012 to help improve the decision quality of the member states in the public sector. Following this publication, the OECD publishes a ‘Regulatory Policy Outlook’ report every 3 years to make comparisons and share good practices by measuring compliance with these criteria among OECD member and EU countries.*
Various studies show that the quality of decision in the public sector significantly affects the trust in the public, the development of the country, and the quality of life of the citizens. A study conducted in Sweden shows that a 10 percent improvement in public decision quality will provide a 5 percent increase in per capita income, increase total factor productivity, and reduce unemployment.
What does public decision quality include?
For the successful implementation of the basic principles determined by the OECD, 3 main processes need be implemented properly:
(i) Conducting a comprehensive impact analysis prior to regulation,
(ii) Informed and inclusive stakeholder engagement that encompasses all parties that are likely to be affected by the regulation, and
(iii) Evaluation of implementation effectiveness after the implementation of the regulation.
Public regulation without data-driven impact analysis is like making an investment without a feasibility study. The efficient use of the resources of the public and companies and/or sectors affected by the regulation can be achieved by clearly stating the purpose of the regulations and making a comprehensive feasibility assessment. Impact analysis for regulations should include how and in what ways regulation will affect different segments (including future generations), the costs that those subject to regulation will have to bear for compliance, and the enforcement capacity and costs that the public sector will use to ensure that regulation is applied equally and fairly to all.
Impact of public decision quality
A consultation process with the stakeholders who are properly informed about the potential impacts of the suggested regulation has two goals: (I) making sure that the regulators better understand the issues priorities and concerns of the citizens and (ii) to build trust for the government institutions (avoiding the agency problem). Stakeholder engagement process should not be completed before providing feedback to motivate further engagement and building such trust. Such a a process brings more balanced and creative solutions to problems as well as boosting trust in public.
The third stage is conducting ex-post analysis. Ex-post analysis improves public accountability and ensures the development of trust in the public. On the other hand, it provides continuous improvement in the public by triggering institutional learning. It provides the opportunity to better understand whether the regulations are achieving the targeted outcomes and enables making the necessary enhancements.
According to the OECD’s 2021 study, which covers member countries and EU and examines the quality of public decisions, there are important areas of improvement for Türkiye.
Türkiye falls behind in the ranks
In all three areas described above, Türkiye has either regressed or remained at the same ranking compared to the previous period.
After the change in the government system, information about primary laws could not be reached to measure the quality of public decision in Türkiye. In the regulatory impact analysis (for secondary regulations), it did not show any significant improvement compared to 2015 and 2018. With the progress of other countries, our country ranks at the bottom for public decision making quality in the 2021 Report.
In terms of inclusive stakeholder engagement, while there is no information on our country regarding primary laws, it ranks 34th out of 38 countries, at the same point as it was in 2018, in secondary regulations.
In the ex-post evaluations, Türkiye ranks 36th among 38 countries in the 2018 Report and ranks last in the 2021 report. The area with the highest improvement and development potential emerges as the post-implementation evaluation stage.
Decision quality impacts quality of life
The fact that there has not been sufficient development in stakeholder engagement in many countries, especially during the Covid-19, makes ex-post evaluations even more valuable in the upcoming period. In addition, rapid technological developments increase the importance of agile governance for public decisions.
The preparation of our country, which seems to be in its infancy in implementing the basic steps of public decision quality needs to be upgraded quickly if we are to improve our competitiveness and public trust. It is critical for Türkiye to learn from the experiences of other countries on these issues in order to meet the regulatory requirements that the 4th industrial revolution will bring such as artificial intelligence, new advanced materials, 3D printing, internet of things, nanotechnology, quantum computers, and gene technology.
In summary, the quality of decision in the public sector affects the quality of life of the citizens. In order to keep up with the emerging needs, global developments, and improve public trust, we need to take the OECD’s recommendations seriously and include data-based impact analyses, consultation processes that ensure informed and inclusive stakeholder engagement, and post-regulation evaluation that brings a culture of continuous learning and accountability into action. Improving quality of public sector decision making is the key to improve the quality of life.
Notes
* Dr. Argüden, is the Chairman of globally recognized Turkish Management consulting firm, ARGE Consulting. He is also the Chairman of Rothschild & Co. Türkiye, Chair of the Trustees of Argüden Governance Academy, and Chair of the Governance Committee of Business at OECD, as well as serving as an independent member on a number of boards.
* Argüden Governance Academy contributes to the improvement of decision quality in the public sector in our country by translating and evaluating the 2021 Report, as well as those that were published in 2015 and 2018 Report and presented to the public in cooperation with TÜSİAD.
