Policy Performance


Economic Policies

With its euro-zone entry testament to a successful recovery, Lithuania falls into the upper-middle ranks internationally (rank 15) in the area of economic policies. Its score on this measure has improved by 0.3 points since 2014.

Growth has been strong in recent years. Regulations have been streamlined, but numerous critical reforms remain outstanding. Unemployment rates remain high, particularly among youth. Active labor-market policies are underdeveloped. Labor-market reforms have been submitted to but not passed by parliament.

Indirect taxes account for a large share of state revenue. The flat income tax is low, but social-security contributions are very high. Crisis-swollen deficits have been brought largely under control, and the country adopted the euro in early 2015. Debt is moderate by EU standards.

R&D and innovation have been funded in part through EU structural funds, but remain relative weaknesses. Russia’s ban on some EU imports has disproportionately affected Lithuanian exports.

Social Policies

With gaps in its social safety net, Lithuania receives a middling overall score (rank 20) with regard to social policies. After a dip last year, its score on this measure has returned to its 2014 level.

Education quality is a concern, with students showing middling achievements. A mismatch between graduate skills and labor-market needs is evident. Poverty-risk and social-exclusion rates are high. Minimum wages and income-tax thresholds have been increased in order to reduce poverty.

Residents give poor ratings to the quality of the health care system. National spending on health is comparatively low as well as inefficient. The share of women employed is high, but family policy is fragmented and focused on high-risk families. Child-poverty rates remain concerning, and child-care provision is insufficient.

The pension system does not adequately protect against poverty. A rise in immigration and asylum-seekers is necessitating development of an integration policy.

Environmental Policies

Despite a high energy intensity, Lithuania falls into the top ranks internationally (rank 5) with regard to environmental policies. Its score on this measure has improved by 0.2 points since 2014.

While per capita CO2 emissions per capita remain relatively high, renewable energy accounts for a significant share of total energy use. EU structural funds have helped make substantial improvements to water-supply and sewage infrastructures. Wastewater treatment and recycling remain problematic, particularly in rural areas.

The country’s forest-management policies are very good. The parliament approved a national climate-change strategy in 2012. It is not generally a leader on global environmental strategies, but takes a more active role on regional issues such as the Baltic Sea.



Quality of Democracy

With free and fair electoral procedures, Lithuania receives a high overall ranking (rank 10) with regard to democracy quality. Its score on this measure remains unchanged relative to 2014.

Campaign-finance laws restrict corporate donations, and contributions must be made public. Sanctions for violations have been increased. Public funding provides most party revenue. Referendums are comparatively frequently used, but often unsuccessful.

The media is broadly independent, but shows increasing concentration. A new law largely aimed at Russian-language broadcasts impose penalties for spreading information deemed to be war propaganda or harmful to the country’s sovereignty.

Civil rights are officially protected, but poor prison conditions and intolerance for sexual and ethnic minorities are problematic. Weak public-sector support has undermined the efficacy of anti-discrimination efforts. Corruption remains a problem. Judicial efficiency is comparatively good, and courts are independent.



Executive Capacity

Showing significant institutional-reform ability, Lithuania scores well (rank 11) with regard to executive capacity. Its score on this measure has improved by 0.1 point since 2014.

Strategic planning is active and well institutionalized. The government office has been repeatedly reorganized, with policy-evaluation capabilities improved. Line ministries have considerable autonomy, but work collaboratively with the prime minister’s office. Informal coordination is important, but subordinate to formal decision-making mechanisms.

RIAs are more formal than substantive. Public consultation is routine, but not aimed at development of consensus. While political skirmishing has prevented achievement of some goals, several key high-profile objectives such as euro introduction have been achieved. The Government Office effectively monitors ministries.

A new procedure for funding municipalities increases dependence on central-government grants. Adaptability, both in the context of EU accession and the introduction of the euro, has been high.

Executive Accountability

With several notable weaknesses, Lithuania falls into the lower-middle ranks internationally (rank 28) in the area of executive accountability. Its score on this measure has declined by 0.2 points since 2014.

Citizen policy knowledge is not highly developed, although public-education campaigns and efforts to improve information availability are under way. While the state-funded media produces some high-quality analysis, the media as a whole is distrusted.

Parliamentarians have considerable resources and strong formal oversight powers. The audit office’s criticism of national budgets has been largely ignored by parliament. The several ombuds offices have taken a more proactive approach to human-rights violations, but lack broad legal authority.

Parties generally restrict decision-making to party members, though ordinary members often have little ability to influence critical decisions. Interest groups, including employers’ associations and trade unions, generally have a limited ability to formulate well-crafted policies.
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