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PUBLIC ADMINISTRATION REFORM IN THE CONTEXT OF EUROPEAN INTEGRATION Adisa BALA (MPA)

BENEFITS OF IMPROVING THE FINANCIAL REPORTING IN REPUBLIC OF MACEDONIA

PUBLIC ADMINISTRATION REFORM IN THE CONTEXT OF EUROPEAN INTEGRATION Adisa BALA (MPA)

Municipality of Shkodra/Economic Department email: adisab_may@yahoo.com

Rozafa ALIBALI (Phdc)

University of Shkodra “Luigj Gurakuqi”/ Lecturer email: rozafaalibali@hotmail.com

Abstract:

The status of public administration, and its adjustment to rapidly changing needs of society and government, is currently a universal debate in European countries. The Albanian government has committed itself to walk into the path of European integration. With its aim of EU membership, the Government and the EU have identified public administration reform as a basic priority to achieve this membership.

Purposes or objectives: The paper analyzes main aspects of public administration reform in Albania during the last decade, focusing especially on trends and restructuring strategies to achieve European standards and requirements. At the beginning of this study, we are going to describe briefly the principal issues of this sector, a general view of the past and the critical moments to be rebuilt. A narrative approach is employed to analyze essential characteristics of the new law on "Status of the Civil Servants” and on “Organization and Functioning of Public Administration". An important moment of our study will be to highlight the main rules on modernizing the process of a “Good Administration” as an inclusive concept.

Methodology & Conclusions

Primary search in the form of interviews and close contacts to the managers/directors of central and local public institutions and secondary search reviewing of recent reports, previous statistics, papers and articles of the field.

Finally the paper concludes by emphasizing the necessity of the reform through the strategy with a series of changes not only in law, procedures or policies ,but also recommending a strict attention to the human resources management as the most substantial asset of the implementation.

Key Words: Public Administration Reform, Good Administration, EU integration, Modernizing Standards, Law on CSS

JEL Classification: H190; H830 ABBREVIATIONS

CSR -Civil Service Reform CSS -Civil Servant Status CSC -Civil Service Commission

DoPA -Department of Public Administration HRM -Human Resources Management PAR -Public Administration Reform

1. Principal Issues and Areas for Support

An efficient, responsive, transparent and accountable public administration is not only of paramount importance for the proper functioning of a nation, it is a central part of democratic governance and also the basic means through which government strategies to achieve the integration goals can be implemented. But, most important of all, an established non-partisan civil service is vital to democracy as it makes peaceful and orderly political succession possible, and thus genuine pluralism.Also, because the public administration is one of the main vehicles through which the relationship between the state and civil society and the private sector is realized, supporting Public Administration Reform (PAR) is a means towards achieving higher-order development goals, particularly equitable growth, poverty reduction, peace and stability. Capacity development in the public administration needs to be addressed at three levels: the individual level, the institutional level, and the societal level. At the individual level it involves establishing the conditions under which civil servants are able to embark on a continuous process of learning and adapting to change – building on existing knowledge and skills and enhancing and using them in new directions.

This requires a new approach to human resource management (HRM) and also points to the importance of knowledge management, as the new vehicle for increased learning. At the institutional level, a similar approach needs to be applied.

Finally, capacity development at the societal level is required to support the paradigm of a more interactive public administration that equally learns from its actions and from the feedback it receives from the population. Based on this, PAR can be divided into three main areas95:

(a) Civil service reform (CSR), which is concerned with human resources in the public sector such as capacity, wages and conditions.

(b) Increasing the efficiency and responsiveness of the policy-making system.

(c) Reforming the machinery of government, which is concerned with the rules, institutions, and structure of the administration necessary to carry out government policy, including new tools for public administration, notably e-governance and e-government.

1.1 What do we mean by Public Administration Reform (PAR)?

Public administration refers to:96

• The aggregate machinery (policies, rules, procedures, systems, organizational structures, personnel, etc.) funded by the state budget and in charge of the management and direction of the affairs of the executive government, and its interaction with other stakeholders in the state, society and external environment.

• The management and implementation of the whole set of government activities dealing with the implementation of laws, regulations and decisions of the government and the management related to the provision of public services.

Public Administration Reform can be very comprehensive and include process changes in areas such as organisational structures, decentralisation, personnel management, public finance, results-based management, regulatory reforms etc.

It can also refer to targeted reforms such as the revision of the civil service statute. Meanwhile, the reform in public administration sector actually includes:

a) Functional and structural reform

b) Extension of scope of legislation related to civil service c) Wage system reform

2. PAR in Albania: General Overview and Trends

The Albanian transition clearly demonstrates how development achieved without paying attention to public administration and management can be hardly sustainable. In its National Strategy for socio-economic development the Albanian government recognized PAR as fundamental for the attainment of the medium-term objectives for growth and poverty reduction.97 During the 1990s, government efforts focused on maintaining aggregate fiscal discipline, and less on establishing institutional arrangements to bring a more strategic focus to budgetary processes. Management of people and programs in a fiscally responsible way, based on sound technical data and modern administrative principles, has been a forgotten area of action. Public administration has, during its brief democratic trial period, been one of the weakest links in the Albanian government system. Leadership into the modern world, of which Albanians dreamt in 1992, had devolved to a series of embarrassing measures of social control.98 An important milestone in modernizing Albanian Public Administration has been the foundation of DoPA in 1994, based on a government decision to create a governing unit in charge for formulation and implementation of the public administration reform. The DoPA is responsible for formulating HRM strategies, while an independent authority, the Civil Service Commission (CSC) monitors DoPA’s activity. The most important next step has been the approbation by Albanian Parliament of Law on Civil Servant Status (CSS) in 1999. Law no. 8549 dated 11.11. 1999, “Public Official Status” created a mixed civil service system, mainly a position based model, combining it with elements of a career system. The prevalent character of the positions system can be distinguished by elements such as: recruiting criteria, promotion, horizontal movement etc. The law mentioned above aims to create a relatively open system of the CS, providing at the same time premises for internal and career mobility. In 2005, for the first time DoPA initiated a general organizational and functional review of public administration institutions. This movement aimed the rationalization of public administration structure, through identification of abundant positions in every institution, and increase of efficiency of the whole structure. The baselines defined by the EU were such minimum standards of performance in areas of budgeting and financial management like public expenditure management, financial control, public procurement and external audit. However, reforms were addressed mainly by drafting laws and formally establishing new agencies, revealing donor pressure more than a serious commitment of the Albanian government, still unable of implementing much of the reforms. As is confirmed in some

95

Public Administration Reform, Practice note (UNDP)

96

Public Administration Reform and EU Accession in CEE, Technical Paper (World Bank)

97 Public Administration Reforms in Transition Countries-Albania, Working Paper ( D.Cepiku,2010)

98

Aspects of PAR in Albania (Blerta Selenica)

UNDP and WB studies, base salaries for public servants are at or below poverty rates; for top functionaries, they are only slightly above. This situation leads to several destructive effects: corruption; grade inflation, salary compression, low quality and low motivation.

Recently, important steps are undertaken in reforming the wage system by drafting a new legislation, which aims to regulate the wage system of independent institutions and extend the civil servants wage system to other state institutions.

Finally, DoPA has been involved in several projects aiming to increase the use of computer technologies in day-to-day operations in public administration and e-governance.99 However, the current implementation of PA reforms continues to focus on mechanical and formal alterations of the structure of the civil service rather than procedural operations and effectiveness and a change in behaviour within the civil service and its citizens-orientation. We move toward integration which is the most intensive process of negotiations in the country's history. There are hundreds and thousands of issues to be negotiated with the European Commission, with member countries in the coming years. The truth is that nothing determines the pace of integration more than the country’s administration, its reforming strength and ability100. The service of CS has made its progress, has been expanded, but we should not forget that civil service is not the product of a long evolution, but the product of a decision and a law, which makes necessary the continuous training and qualification of this administration. Just to be more concrete, we want to emphasize the crucial directions of this process to be addressed through the table below:

Table 1: The scope and contents of PAR in Albania 101

3. “Good Administration” -the key of Public Administration

The concept of Good Administration has emerged within the European Union and its Member States as a system of values stemming from the principles of rule of law, democracy and human rights. It comprises a set of procedural rules which translate these principles into concrete standards for administrative operation.102

3.1 Principles and their importance

The status of public administration, and its adjustment to rapidly changing needs of society and government, is currently a universal debate in European countries. In this political and social context, “Good Administration” has emerged as an inclusive concept, indicating the overall objective of the modernization process. The Charter of Fundamental Rights of the European Union proclaims that every person has the right to Good Administration.

99 An overview of PA in Albania (Dhurata Thanasi)

100Intersectoral Strategy of PAR 2009-2013 (DoPA)

101Public administration reform in transition, Public Management Review ( Mussari, R., Cepiku, D.,2007)

102 Good Administration through General Administrative Procedures, Wolfang Rusch (Annual Conference ReSPA,2012)

Areas of PA modernization PAR in Albania

Public employment Law on CS and creation of the CSC

Open government, transparency and accountability Law on the rules of ethics in PA, anti-corruption plans and measures controlling conflict of interest, law on administrative procedures and law on freedom of information

The use of market-type mechanisms First privatisation was pursued, but other market mechanisms have not been introduced because of the absence of well developed market and private enterprises

Reforming organisational structure This lever of change has been widely used, but without a coherent strategy

Public expenditure and budgeting Introduction of the Medium-Term Budget Program (MTBP) ,a tax administration modernization Control systems Emphasis is on external control legislation and

institutions Use of ICTs (Information Communication

Technology) and E-government

ICTs have been used in a fragmented, its use for service delivery is still very limited. Several projects on e-proc, e-accounting and e-population registry are undertaken.

Some key elements of this fundamental right are stated in the Charter itself, while other principles and standards of good administration derive from other EU legislation and judicature as well as from good administrative practice of EU Member States. These principles and standards have become part of modern administrative systems. Good administration principles need to respond to old and new challenges.

Currently, they include the following elements:

• Good Administration is reliable and predictable. It guarantees legal certainty by respecting the rule of law.

Administrative bodies exercise the powers and responsibilities vested in them in accordance with the laws and regulations applying to them. They implement general rules and principles impartially to anyone who fulfils the required conditions taking into account the interpretative criteria elaborated by the courts. When exercising their discretion they remain within the boundaries set by the law, in good faith and in a reasonable and proportionate way, upholding the requirement of equal treatment.

• Good Administration is open and transparent; administrative bodies keep matters secret or confidential only in order to protect a legitimate superior interest, e.g. national security or personal data of third parties etc. They even facilitate access in various ways, e.g. by electronic means, where feasible, and through points of single contact. Administrative bodies communicate actively about their tasks, duties and responsibilities. All public authorities identify the responsible civil servant and take care of improper or impolite behavior vis-à-vis citizens. They encourage participation of everyone affected by its decisions. Accepting citizens as partners in the decision making process is the first step towards the "horizontalisation" of the relationship.

• Good Administration is accountable. Administrative bodies, their work and its outcome are open to scrutiny and review by other administrative and legislative authorities as well as the courts. Accountable administration further requires the possibility of legal remedies for a decision and the provision of information about them by indicating any preconditions. Accountability involves the possibility for each individual citizen to lodge a complaint to an independent body. Such is the role of an Ombudsman who acts as an external mechanism of control, investigates complaints about maladministration and recommends corrective action where necessary.

• Good administration requires an accessible and comprehensive system of judicial control of administrative acts and other actions of the administration. This completes the mechanism for the defense of citizens’ rights.

Courts are provided with adequate power to fully scrutinize the legality of the administrative acts/actions in order to pronounce a final decision on the dispute.

• Good Administration is effective and efficient. Public authorities need to be successful in achieving the goals and handling the public problems set for them by law and government. They need to use public resources in a way proportional to the results attained, set clear objectives, evaluating past experience as well as the future impact of their action. Administrative procedures constitute a crucial part of the quality of public administration, which in turn is a prerequisite for political and economic performance.

3.2 Benefits of Good Administration

Good Administration presents multiple advantages and benefits: (a) it enhances democratic governance and political efficiency; (b) it fosters economic development and (c) – for EU candidates’ countries and potential like us – prepares accession and future membership.

3.2.1 Impact on political efficiency and democratic governance

Reliable, fair, open, accountable and efficient administration means proper implementation of political decisions and legal rules. The public interest is properly and efficiently pursued and the rights and interests of the citizens are respected. This is to the benefit of government, the citizens and more generally, democratic governance. Furthermore, by creating predictability, enhancing political legitimacy and promoting democratic governance, Good administration principles promote political efficiency. Predictability is important for government in order to make sure its decisions will be implemented. It is also important for citizens, who are able to know their rights and obligations act accordingly and know what to expect from public administration when deploying their activities.103 Good Administration fosters trust in institutions, a vital precondition for low compliance costs, social peace and political stability. On the contrary, the lack of such conditions results in weak administration, weak state institutions and, in the end, a low capacity of a society to promote its well being. Delays, inefficiency, partiality, arbitrariness, corruption, nepotism, patronage, and other forms of maladministration lead to citizens’ resentment, resistance and protest against the state and its institutions.

All this is important at the international level as well. Cross border cooperation needs to be based on clear and predictable rules and on efficient domestic institutions. These conditions promote the political and economic position of our country in the EU and the globalised markets.

103 Effectiveness of Good Governance and Ethics-evaluating reform outcomes in the context of the financial crisis (Ch Demmke & T Moilanen) June 2011.

3.2.2 Impact on economic development

The administrative, legal and court systems of a country form the most important part of its institutional infrastructure.

Their importance for the development of the economy is universally acknowledged. They constitute the basis for the operation of the market and the encouragement of the most dynamic parts of society to contribute to its general welfare.

Economic success requires institutions that encourage individuals to engage in productive and innovative activities, to look for opportunities and take up challenges. Foreign investors assess the risk by the chief criterion of predictability and stability of the political and institutional environment. It is a primary role of the State to define and follow up the respect of the rules of the game ensuring predictability for the deployment of economic activities. Maladministration in the form of administrative deficiencies and obscure, lengthy and unnecessary complex administrative procedures yield the field to partiality and corruption. Good Administration principles aim at balancing the needs of society and economic actors in view of the common good. Efforts to facilitate this encounter and communication with public bodies include the use of IT-based communication means, the introduction of single contact points (“one-stop-shops”) etc.

3.2.3 Impact on European integration: the non formalized acquis communautaire

It is not a coincidence that the principles of Good Administration form an integral part of the value system of the European Union. The EU constitutes a complex political and economic environment in which predictability is of utmost importance either for joint decision making or for achieving its economic and social goals. This is why these principles are common to all member states of the European Union, and to the institutions of the European Union itself. They represent part of the “non-formalized acquis communautaire” that has to be adopted by candidate countries. In terms of European integration Good Administration serves first and foremost the national interest of each member state. It allows coping with the pressure of economic competition and the forces at work on the common market. Accession states that wish to contribute to and benefit from the common market can do so for their own benefit only if they possess a functioning market economy as well as corresponding state institutions supporting it. A degree of compatibility of their administrative systems with the other EU countries is required for administrative cooperation, which in turn reduces transaction costs for cross-border business and investments. The European Commission is more and more interested to ensure that accession countries fulfill the Copenhagen and Madrid criteria. This includes the readiness and the ability to follow the principles of Good Administration in all its aspects, including administrative and judicial reform, the rule of law, and the fight against corruption.

4. PAR through modernizing administrative procedures, meeting EU standarts

The Albanian government has committed itself to walk into the path of European integration. With its aim of EU

The Albanian government has committed itself to walk into the path of European integration. With its aim of EU

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