CZECH REP.

At rank 18, the Czech Republic’s status performance is the best among the East-Central European states.

The center-right government established a 15% flat tax, reduced corporate tax levels, cut social spending and introduced health care fees.

These unpopular measures led to a vote of no-confidence in March 2009. The ensuing caretaker government failed to introduce substantial measures.

Economic policy outcomes have improved somewhat since the SGI 2009. The economic crisis has led to a sharp drop in exports, but the banking and financial systems have remained largely unaffected.

Czech democracy (rank 18) is firmly established.

Parties in elections compete against each other with state support that depends on their voting strength in parliament. The media provides coverage of all significant political opinions.

Civil rights are legally secured, particularly since anti-discrimination legislation was passed under pressure from the EU. There are legal checks on the executive’s actions and the Constitutional Court has been very active in constraining parliament’s decisions.

Corruption remains an important issue with politicians from all sides linked to dubious business practices. Existing laws have not proven effective, but there are frequent media exposures of corruption.

The Czech Republic ranks 18th in the SGI’s economy and employment category (+ 4 ranks relative to SGI 2009).

The economy grew rapidly until 2008, but suffered a sharp drop in exports following the global financial crisis. Although the banking and financial systems remained largely unaffected, the budget deficit rose to 6% of GDP in 2009.

Unemployment levels are at the OECD average, but long-term unemployment and regional disparities in employment distribution are relatively high.

As part of a major overhaul of the tax system in 2008, the previously progressive income tax was replaced by a single 15 percent rate (“flat tax”).

At rank 16, the Czech Republic’s social policy evaluation leaves it at a stable middle level.

Gains in life expectancy and very low infant mortality rates attest to the quality of the health care system, which provides free medical treatment through state and private insurance schemes.

Social inclusion issues remain problematic. Inequalities in incomes as well as between regions and sectors are increasing, though the disparities are less stark in absolute terms than in other east-central European states.

Though employment rates among women are relatively high, family policy needs to take account of the growing number of single mothers. Pension system reform is the focus of debate, following a Constitutional Court ruling declaring the existing system to be unconstitutional.

The EU presidency in the first half of 2009 helped stem the prevailing eurosceptic trend among many Czechs - including most notably President Václav Klaus - and facilitated a more accepting attitude toward European integration. External security is also assured through NATO, and there are no substantial external threats. Controversy remains over the plan to build a radar tracking station in the Czech Republic as part of a US anti-missile protection system.

Internal security improved in the process of European integration. Since accession to the Schengen area, cooperation with other member states has increased.

The Czech Republic ranks 18th in the SGI’s resources category.

Enthusiasm for environmental issues has waned somewhat since EU accession. Strong lobbies impede further steps toward eco-friendly regulatory policies.

Research and innovation have been given high profiles in government policy documents, but spending levels remain low. Most significant applied research activity is performed by foreign-owned multinational companies.

Access to education is broad, but teachers’ qualification levels are sometimes low. Despite having one of the OECD’s highest secondary education completion rates, only about 16% of the Czech labor force has attended tertiary education.

At rank 23, the Czech Republic has made significant relative gains (+5 ranks relative to SGI 2009), but the country’s management performance is still weak in nearly all measures.

Although successive governments have demonstrated a limited ability to steer policy-making, the introduction in 2005 of a formalized impact assessment has yielded positive results. A growing number of conflicting interests among coalition partners have frustrated policy implementation.

Czech involvement in international organizations is considerable but rarely pro-active. Institutional arrangements are not systematically applied.

Participatory competence among citizens remains a weak point, but the parliament exercises its right to oversee executive activity.

At position 26, the Czech Republic has shown some significant improvements (overall +2 ranks relative to SGI 2009) in aspects of its government’s steering capability.

In general, strategic planning factors little in Czech government decision-making, and the influence of academic experts is modest. The Office of the Government is relatively small and has little sectoral policy expertise.

However, the introduction of regulatory impact assessment (RIA) in 2005 has represented a major improvement. By 2008, all draft laws were to slated be subjected to RIA.

Societal consultation takes place within an institutionalized tripartite council that includes the government, trade unions and employers’ organizations. On a number of recent occasions, government coalition partners have expressed disagreement in public.

At rank 26, the Czech Republic’s policy implementation capacity shows some deterioration relative to the SGI 2009.

Governments’ ability to achieve objectives has proven highly variable. Constraints imposed on the Fischer government peaked in spring 2010, when the Civic Democratic Party blocked all parliamentary discussion of bills through the use of procedural obstructions.

Governments have tried to ensure ministerial compliance largely through the use of well-defined programs and coalition agreements.

The regional tier of governance has taken on greater importance following the consolidation of various administrative functions. However, the regions’ financial dependence on the central government is high.

At position 26, the Czech Republic’s assessed institutional learning capacity remains near the OECD’s bottom, despite small gains relative to the SGI 2009.

The government’s activities have been increasingly adapted to the EU’s legislative framework since the mid-1990s. However, the government’s primary structures and modes of functioning have remained largely unchanged. The country is a passive follower in international organizations, especially the EU and NATO.

There is no systematic monitoring of institutional arrangements. Fragile political majorities limited the government’s strategic capacity during the period under review, so no major attempts at institutional reform were undertaken.

Holding steady at rank 18, the Czech Rebublic’s executive accountability rating falls into the OECD’s lower middle range.

Citizens are familiar with political parties’ basic views and policy positions, but typically have a less sure grasp on details. Many have a limited ability to reach informed evaluations.

The legislature has considerable executive oversight powers, and governments tend to respect committee requests for information.

The main TV and radio stations offer daily news programs, as well as deeper discussion and analysis programs on a weekly basis. The major political parties present coherent and recognizable policies that fit into the traditional left-right spectrum.