Policy Performance


Economic Policies

Showing significant gains in recent years, Malta falls into the upper-middle ranks (rank 17) with regard to economic policies. Its overall score in this area has improved by 0.7 points relative to 2014.

Growth rates have been strong, and unemployment rates have fallen to low levels. However, employment rates are also low. Investment is forecast to stabilize at a high level, with household consumption increasing. Export competitiveness is declining.

Labor-force participation rates are low overall, with a very large gender gap. The large informal economy shifts the tax burden to formal wage-earners, with tax-evasion controls ineffective. Corporate taxes remain high, but targeted tax incentives often reduce the load very substantially. New incentives are available for SME investors and startups launched by recent graduates.

Budget deficits have fallen to sustainable levels. Debt is moderately high. However, health care costs and state-owned-enterprise concerns pose risks to future deficit targets. The R&D sector is underdeveloped.

Social Policies

With a number of reform needs evident despite improvements, Malta falls into the lower-middle ranks (rank 29) with respect to social policies. Its score for this measure has improved by 0.5 points relative to 2014.

School drop-out rates are worrisomely high. Tertiary-level attainment levels are low, but education access generally is quite equitable, and PISA scores are rising.

Poverty risk among the unemployed and elderly is high, and poverty rates have risen in recent years. New policies include supplementary benefits for children, fiscal incentives to invest in pensions and a social-housing project. Employment rates are very low among women. Workplace policies including free child care and financial incentives for mothers returning to work seek to address this issue.

Pension spending is high as a share of GDP, but retirement-age reforms are needed to secure sustainability. While the free basic health care system is largely of high quality, many advanced treatments require payment. The country has granted asylum status to a large number of refugees, but integration policies remain weak.

Environmental Policies

With challenges defined by its island geography, Malta scores relatively poorly (rank 33) in the area of environmental policies. Its score on this measure has improved by 0.1 point relative to 2014.

The renewable-energy share remains small. The country depends strongly on fossil fuels for its energy supply, but solar-power projects, an electrical interconnection line with Sicily and a planned gas-fired power station may ease this dependence in the future.

The country suffers from scarce water resources, but a flood-relief plan aimed at collecting more water has helped systematize a previously spotty strategy. Additional strategic plans are being developed.

Biodiversity is threatened by development, invasive species and climate change. A policy on this issue aims to halt biodiversity loss by 2020. Both independently and as an EU member, the country is active in global environmental-protection efforts including the Paris agreement, but is not a key player.



Quality of Democracy

Despite effective and impartial electoral laws, Malta falls into the bottom ranks internationally (rank 36) with regard to the quality of democracy. Its score in this area has improved by 0.3 points relative to 2014.

A new law governs political-party financing, but creates an electoral commission regulated by the parties. Its limits are already being tested by the parties. The state-owned media are susceptible to state influence. Political parties own broadcast and print media. Strict libel laws constrain journalists’ reporting.

Civil rights and political liberties are generally respected, and new rights have been granted to the LGBTQ community. Human trafficking is a problem. Discrimination on the basis of political affiliation remains common, and women are underrepresented in many social areas. Migrant workers face employment discrimination.

Though anti-corruption measures have been strengthened, conflicts of interest remain almost unavoidable in such a small territory. Judges are appointed by the government, hampering independence, and courts are inefficient.



Executive Capacity

Despite growing core-government steering capabilities, Malta scores relatively poorly (rank 32) with regard to executive capacity. Its score on this measure has improved by 0.6 points relative to 2014.

Preparation for Malta’s 2017 EU presidency has increased the influence of ministry strategic-planning units, and the PMO’s policy-coordination role has expended. Draft bills are scrutinized by the cabinet and then evaluated by attorney general. Informal coordination has improved, but remains suboptimal.

The RIA process is evolving, with assessment quality varying. The government has sought to bypass sustainability checks in some challenging policy areas. Consultation with civil society has steadily improved, with formal consultations with NGOs taking place in some cases.

Government efficiency has continued to improve, with preparations for the presidency improving public-service efficiency. Communication strategies have improved. Competition between ministries hinders some coordination efforts. Self-monitoring is hampered by the prevalence of political appointees in ministerial secretariats.

Executive Accountability

Reflecting several notable weaknesses, Malta’s overall score for executive accountability falls into the middle ranks internationally (rank 22). Its score on this measure is unchanged relative to 2014.

The part-time parliament has few resources, and comparatively weak executive-oversight powers, though a new act gives it greater control over budget decisions. The audit office is independent, and has seen its workload increase substantially in recent years. The ombudsman is highly esteemed but has limited powers.

While media competition has improved public access to information, citizen opinions are strongly influenced by the party-controlled media. Infotainment programing remains widespread.

Political-party decision-making is performed by elected delegates, but civil society is being more regularly consulted. Economic-interest groups are capable of formulating relevant policies, though employers’ groups commission more independent research than do unions. Non-economic groups are typically reactive, but have played a key government-advisory role in issues such as migration.
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