Policy Performance


Economic Policies

With its euro-zone entry testament to a successful recovery, Lithuania falls into the upper-middle ranks internationally (rank 17) in the area of economic policies. Its score on this measure has improved by 0.3 points since 2014.

Growth rates have slowed to moderate levels, hampered by a drop in exports to Russia. A major business-friendly revision of the labor code and social protections was passed by the outgoing government, but was criticized by trade unions. Implementation has been delayed by the new government.

Unemployment rates remain high, especially among the young and low-skilled, and a skilled-labor shortage is also emerging. 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.

Social Policies

With gaps in its social safety net, Lithuania receives a middling overall score (rank 22) with regard to social policies. Its score on this measure has declined by 0.1 point since 2014.

Education quality is a concern, with students showing middling achievements, though spending levels are comparatively high. 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.

Health outcomes are poor in cross-EU comparison. Out-of-pocket payments remain high, reducing access for some groups. A plan to consolidate providers has not produced any significant change. 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. Immigration is comparatively rare. The country has committed to taking more than 1,100 asylum seekers, but actual numbers have been far lower.

Environmental Policies

Despite a high energy intensity, Lithuania falls into the top ranks internationally (rank 6) with regard to environmental policies. Its score on this measure has improved by 0.2 points since 2014.

CO2 emissions are declining, and renewable energy accounts for a significant share of total energy use, already exceeding its Europe 2020 target. EU structural funds have helped make substantial improvements to water-supply and sewage infrastructures. Wastewater treatment remains problematic, particularly in rural areas.

The recycling rate is well below the EU average, and the removal of a landfill tax will discourage further investment in waste processing and sorting. However, 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. State funding provides the largest share of party revenue. Cases of vote-buying were alleged in 2016 in rural electoral districts. Referendums are comparatively frequently used, but often unsuccessful.

The media is broadly independent, but shows increasing concentration. A new media law imposes penalties for spreading information deemed to be war propaganda or otherwise harmful to the country’s sovereignty, and several Russian TV stations have been temporarily banned. Several major new transparency initiatives have been passed, but implementation has been slow.

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 10) 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, though plans were largely ignored in the 2016 elections. The new prime minister plans to increase government-office expertise and policy capacities. 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. The European Social Fund is co-funding a large new stakeholder-consultation project is While political skirmishing has prevented achievement of some goals, several key high-profile objectives such as euro introduction have been achieved.

Despite a recent review of oversight procedures, monitoring is not based on high-quality information. A new procedure for funding municipalities has increased 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 27) in the area of executive accountability. Its score on this measure has declined by 0.1 point 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 are in general 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. The new government is heavily made up of independent candidates, complicating accountability. Interest groups, including employers’ associations and trade unions, generally have a limited ability to formulate well-crafted policies.
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