Iceland

   

Executive Capacity

#17
Key Findings
Unsettled by political scandal, Iceland falls into the upper-middle ranks (rank 17) with respect to executive capacity. Its score on this measure has improved by 0.2 points since 2014.

The Prime Minister’s Office has relatively minimal sectoral expertise. Ministries have considerable autonomy in drafting policy, but must present proposals to the cabinet before going to the parliament. Long-term strategic planning is often vague, with inconsistent follow-through.

New regulations mandate RIAs, but no official methodology has yet been developed. Consultation with labor-market associations is traditionally robust. Parliament’s continuing disregard for the results of a 2012 constitutional referendum is viewed by many as undemocratic.

The Benediktsson cabinet collapsed due to the concealment of information within government circles. Ministry monitoring is strong, but oversight of agencies is weak. The status of the government’s official withdrawal of Iceland’s EU accession application remains unclear.

Strategic Capacity

#33

How much influence do strategic planning units and bodies have on government decision-making?

10
 9

Strategic planning units and bodies take a long-term view of policy challenges and viable solutions, and they exercise strong influence on government decision-making.
 8
 7
 6


Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Their influence on government decision-making is systematic but limited in issue scope or depth of impact.
 5
 4
 3


Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Occasionally, they exert some influence on government decision-making.
 2
 1

In practice, there are no units and bodies taking a long-term view of policy challenges and viable solutions.
Strategic Planning
3
Long-term strategic planning in Iceland is often vague, with comparatively weak execution, supervision, and revision of plans. When specific objectives are established in the policy planning phase, a lack of sufficient incentives or institutional mechanisms typically limits their realization. As a result, the government can delay or change strategic plans. For example, parliament approves a strategic regional policy every four years (Stefnumótandi byggðaáætlun), but – as this plan has the status of a parliamentary resolution and not legal status – the government has no binding obligation to implement the plan. Consequently, only certain aspects of these four-year plans have ever been implemented.

Policymaking is monitored by cabinet ministers who rely on their respective ministerial staff for advice and assistance.

Citations:
Special Investigation Committee (SIC) (2010), “Report of the Special Investigation Commission (SIC),” report delivered to parliament 12 April.

Parliamentary resolution on regional policy (Þingsályktun um stefnumótandi byggðaáætlun fyrir árin 2014–2017. 143. löggjafarþing 2013–2014.Nr. 21/143. Þingskjal 1083 — 256. mál.).

Stefnumótandi byggðaáætlun 2017-2013. https://www.byggdastofnun.is/is/byggdaaaetlun/byggdaaaetlun-2017-2023

How influential are non-governmental academic experts for government decisionmaking?

10
 9

In almost all cases, the government transparently consults with a panel of non-governmental academic experts at an early stage of government decision-making.
 8
 7
 6


For major political projects, the government transparently consults with a panel of non-governmental academic experts at an early stage of government decision-making.
 5
 4
 3


In some cases, the government transparently consults with a panel of non-governmental academic experts at an early stage of government decision-making.
 2
 1

The government does not consult with non-governmental academic experts, or existing consultations lack transparency entirely and/or are exclusively pro forma.
Scholarly Advice
6
Governments occasionally consult academic experts. Typically, these experts are trained lawyers who provide advice on the preparation of specific laws or public administration practices, but economic and engineering experts have also been consulted. Moreover, these experts are often affiliated with the political party of respective minister seeking their advice. Meanwhile independent experts involved in the policy process have previously complained that their views were ignored. Thus, impartial, non-governmental experts should not be considered to have had a strong influence on decision-making.

However, the 2008 economic collapse changed this pattern. The need for scholarly advice on judicial, financial, and economic issues, as well as on questions of public administration, increased markedly. This was particularly the case with the April 2010 parliamentary Special Investigation Committee (Rannsóknarnefnd Alþingis) report, which investigated the causes of the economic collapse. A number of experts in various fields – including law, economics, banking, finance, media, psychology, philosophy, political science and sociology – contributed to the report. While no data exists on the broader use of expert advice in governmental decision-making, the Special Investigation Committee experience may have expanded the role of experts overall.

Foreign experts are occasionally called upon. In 2017, four teams of foreign economists were asked to evaluated Iceland’s monetary policies and prospects.

Academic experts called upon to advise the government are commonly viewed as being politically partisan. This has reduced public confidence in academic expertise in Iceland. According to GALLUP, a market research firm in Iceland, public confidence in the University of Iceland dropped considerably from 85% before 2008 but is recovering now and was 76% in 2017.

Citations:
http://www.gallup.is/nidurstodur/traust-til-stofnana/

Interministerial Coordination

#16

Does the government office / prime minister’s office (GO / PMO) have the expertise to evaluate ministerial draft bills substantively?

10
 9

The GO / PMO has comprehensive sectoral policy expertise and provides regular, independent evaluations of draft bills for the cabinet / prime minister. These assessments are guided exclusively by the government’s strategic and budgetary priorities.
 8
 7
 6


The GO / PMO has sectoral policy expertise and evaluates important draft bills.
 5
 4
 3


The GO / PMO can rely on some sectoral policy expertise, but does not evaluate draft bills.
 2
 1

The GO / PMO does not have any sectoral policy expertise. Its role is limited to collecting, registering and circulating documents submitted for cabinet meetings.
GO Expertise
6
The Prime Minister’s Office has the fewest staff members of any of the country’s ministries and a limited capacity for independently assessing draft bills. The left-wing cabinet (2009-2013) merged a number of ministries together, reducing the total number of ministries from 12 to 8. A primary justification was that some ministries lacked broad-based expertise and the merger would make this expertise more widely accessible, which has in some cases been achieved. The Gunnlaugsson center-right cabinet (2013-2016) partially reversed this reform in 2013 by appointing separate ministers to head the Ministry of Welfare’s subdivisions of Social Affairs and Housing, and Health Affairs. Furthermore, a separate minister of environment and resources was appointed at the end of 2014. These changes increased the number of ministers from 8 to 10. After the 2016 elections a cabinet comprising three parties was established – the Benediktsson cabinet coalition. This led to an increase in ministerial posts from 10 to 11. The Ministry of Interior was split in two so that separate ministers took care of justice, and communications and local government affairs. The increase from 8 to 11 from 2009 to 2017 indicates that political parties tend to behave as interest organizations of politicians. The draft constitution from 2011/2012 stipulates that the number of cabinet ministers must not exceed 10.

Can the government office / prime minister’s office return items envisaged for the cabinet meeting on the basis of policy considerations?

10
 9

The GO/PMO can return all/most items on policy grounds.
 8
 7
 6


The GO/PMO can return some items on policy grounds.
 5
 4
 3


The GO/PMO can return items on technical, formal grounds only.
 2
 1

The GO/PMO has no authority to return items.
GO Gatekeeping
10
The Prime Minister’s Office has no formal authority. Formally issues can only be approved in cabinet if a unanimous decision is reached by ministers. In practice, however, prime ministers can return items to cabinet despite this authority not being explicitly granted by law.

To what extent do line ministries involve the government office/prime minister’s office in the preparation of policy proposals?

10
 9

There are inter-related capacities for coordination in the GO/PMO and line ministries.
 8
 7
 6


The GO/PMO is regularly briefed on new developments affecting the preparation of policy proposals.
 5
 4
 3


Consultation is rather formal and focuses on technical and drafting issues.
 2
 1

Consultation occurs only after proposals are fully drafted as laws.
Line Ministries
8
Due to a strong tradition of ministerial independence, ministries have considerable flexibility in drafting their own policy proposals without consulting the Prime Minister’s Office. Yet, where a minister and prime minister belong to the same party, there is usually some Prime Minister’s Office involvement. However, where the minister and prime minister belong to separate coalition parties the Prime Minister’s Office has little or no involvement in policy development. After the publication of the Special Investigation Committee report in 2010, a committee was formed to evaluate and suggest necessary steps toward the improvement of public administration. In order to improve working conditions within the executive branch, the committee proposed introducing legislation to clarify the prime minister’s role and responsibilities. In March 2016, new regulations on governmental procedures were approved (Reglur um starfshætti ríkisstjórnar), requiring ministers to present all bills they intend to present in parliament first to the cabinet as a whole.

Citations:
Reglur um starfshætti ríkisstjórnar. Nr. 292/2016 18. mars 2016.

Skýrsla starfshóps forsætisráðuneytisins (2010): Viðbrögð stjórnsýslunnar við skýrslu rannsóknarnefndar Alþingis. Reykjavík, Forsætisráðuneytið.

How effectively do ministerial or cabinet committees coordinate cabinet proposals?

10
 9

The large majority of cabinet proposals are reviewed and coordinated first by committees.
 8
 7
 6


Most cabinet proposals are reviewed and coordinated by committees, in particular proposals of political or strategic importance.
 5
 4
 3


There is little review or coordination of cabinet proposals by committees.
 2
 1

There is no review or coordination of cabinet proposals by committees. Or: There is no ministerial or cabinet committee.
Cabinet Committees
6
Cabinet committees rarely prepare cabinet meetings, although the Budget Committee and some ad hoc committees are exceptions. However, the majority of items on cabinet meeting agendas are prepared by ministers often with two or more ministers coordinating the cabinet meeting. In the immediate aftermath of the 2008 economic collapse, cooperation between ministers increased, particularly between the prime minister, the minister of finance, and the minister of commerce. However, this change was temporary and intended only to facilitate the cabinet’s immediate reactions to the 2008 economic collapse. In February 2013, new regulations were introduced permitting the prime minister to create single-issue ministerial committees to facilitate coordination between ministers where an issue overlaps their authority areas.

Records must be kept of all ministerial committee meetings, but these are not made public.

The number of ministerial committees to coordinate overlapping policy issues has been reduced since the preceding review period from 7 to 3. These committees include the Ministerial Committee on Public Finances (Ráðherranefnd um ríkisfjármál), with four ministers, and the Ministerial Committee on National Economy (Ráðherranefnd um efnahagsmál), with four ministers. The newly established Ministerial Committee on Coordination of Issues that concern more than one ministry (Ráðherranefnd um samræmingu mála er varða fleiri en eitt ráðuneyti) encompasses the former ministerial committees on Equality, On Solutions for the Debts of Families, on Arctic Affairs, and on Public Health Affairs. Even though this includes all possible issues, four are specifically mentioned: Equality, issues of refugees and immigrants, arctic affairs, and public health.

Citations:
Rules on procedures in ministerial committee meetings. (REGLUR um starfshætti ráðherranefnda. Nr. 166/2013 22. febrúar 2013).

https://www.stjornarradid.is/rikisstjorn/radherranefndir/

How effectively do ministry officials/civil servants coordinate policy proposals?

10
 9

Most policy proposals are effectively coordinated by ministry officials/civil servants.
 8
 7
 6


Many policy proposals are effectively coordinated by ministry officials/civil servants.
 5
 4
 3


There is some coordination of policy proposals by ministry officials/civil servants.
 2
 1

There is no or hardly any coordination of policy proposals by ministry officials/civil servants.
Ministerial Bureaucracy
7
Ministry officials and civil servants play an important role in preparing cabinet meetings. Even so, no cooperation between ministries is presumed in cases when the ministers themselves are not involved. As a consequence of the strong tradition of ministerial power and independence, the involvement of too many ministries and ministers has been found to be a barrier to policymaking. Currently, coordination between ministries is irregular. The prime minister has the power to create coordination committees, but the number of active committees is currently low.

How effectively do informal coordination mechanisms complement formal mechanisms of interministerial coordination?

10
 9

Informal coordination mechanisms generally support formal mechanisms of interministerial coordination.
 8
 7
 6


In most cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
 5
 4
 3


In some cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
 2
 1

Informal coordination mechanisms tend to undermine rather than complement formal mechanisms of interministerial coordination.
Informal Coordination
7
There is evidence that informal cooperation between ministers outside of formal cabinet meetings is increasing. These cooperative ministerial clusters were referred to in the Special Investigation Committee’s 2010 report as “super-ministerial groups.” The SIC report pointed out that examples of such cooperation immediately after the 2008 economic collapse demonstrated a need for clear rules on reporting what is discussed and decided in such informal meetings.

The SIC report also identified a tendency to move big decisions and important cooperative discussions into informal meetings between the chairmen of the ruling coalition parties. In March 2016, revised regulations on the procedures for cabinets were introduced but this only addresses formal cabinet meetings and not informal ministerial meetings. Therefore, we can conclude that the SIC report’s call for clearer regulation has partly been addressed. However, informal meetings continue without proper reporting.

Citations:
The SIC report from 2010. Chapter 7. (Aðdragandi og orsakir falls Íslensku bankanna 2008 og tengdir atburðir (7). Reykjavík. Rannsóknarnefnd Alþingis).

Reglur um starfshætti ríkisstjórnar. Nr. 292/2016. 18. mars 2016. (Rules on procedures in cabinets).

Evidence-based Instruments

#19

To what extent does the government assess the potential impacts of existing and prepared legal acts (regulatory impact assessments, RIA)?

10
 9

RIA are applied to all new regulations and to existing regulations which are characterized by complex impact paths. RIA methodology is guided by common minimum standards.
 8
 7
 6


RIA are applied systematically to most new regulations. RIA methodology is guided by common minimum standards.
 5
 4
 3


RIA are applied in some cases. There is no common RIA methodology guaranteeing common minimum standards.
 2
 1

RIA are not applied or do not exist.
RIA Application
7
Iceland had no history of conducting regulatory impact assessments until March 2016 when new regulations on cabinet procedures were enacted (Reglur um starfshætti ríkisstjórnar). Paragraph 13 concerns impact assessment of cabinet bills. Every minister shall evaluate the impact, including financial impact, of every bill he intends to submit to the parliament. This impact assessment shall be a part of the explanatory statement with the bill. However, the methodology for these impact assessments is not defined further in the regulations.

Citations:
Reglur um starfshætti ríkisstjórnar. Nr. 292/2016 18. mars 2016.

Does the RIA process ensure participation, transparency and quality evaluation?

10
 9

RIA analyses consistently involve stakeholders by means of consultation or collaboration, results are transparently communicated to the public and assessments are effectively evaluated by an independent body on a regular basis.
 8
 7
 6


The RIA process displays deficiencies with regard to one of the three objectives.
 5
 4
 3


The RIA process displays deficiencies with regard to two of the three objectives.
 2
 1

RIA analyses do not exist or the RIA process fails to achieve any of the three objectives of process quality.
Quality of RIA Process
5
The new regulations on cabinet procedures (Reglur um starfshætti ríkisstjórnar), including paragraph 13 about impact assessments of cabinet bills, partly ensure participation, but they are too limited to ensure quality because the methodology is not presented. Stakeholders, other ministries, and the public shall be informed during the process, which is an important step toward transparency.

Citations:
Reglur um starfshætti ríkisstjórnar. Nr. 292/2016 18. mars 2016.

Does the government conduct effective sustainability checks within the framework of RIA?

10
 9

Sustainability checks are an integral part of every RIA; they draw on an exhaustive set of indicators (including social, economic, and environmental aspects of sustainability) and track impacts from the short- to long-term.
 8
 7
 6


Sustainability checks lack one of the three criteria.
 5
 4
 3


Sustainability checks lack two of the three criteria.
 2
 1

Sustainability checks do not exist or lack all three criteria.
Sustainability Check
5
The new regulations on cabinet procedures, enacted in March 2016, do not include anything about sustainability checks as parts of the impact assessment. However, financial impact is mentioned.

Citations:
Reglur um starfshætti ríkisstjórnar. Nr. 292/2016 18. mars 2016.

Societal Consultation

#18

To what extent does the government consult with societal actors to support its policy?

10
 9

The government successfully motivates societal actors to support its policy.
 8
 7
 6


The government facilitates the acceptance of its policy among societal actors.
 5
 4
 3


The government consults with societal actors.
 2
 1

The government rarely consults with any societal actors.
Negotiating Public Support
6
Iceland has a long tradition of formal and informal consultation between government and labor market associations. The 2008 economic collapse led to greater and closer consultation. In February 2009, the government, the municipalities, and the major labor market associations signed the so-called Stability Pact (Stöðugleikasáttmáli). Repeated disputes finally led to a withdrawal from the pact by the main employers’ association.

Another example of public consultation was the process of revising the 1944 constitution. This process involved the creation of a national assembly, comprising 950 individuals selected at random from the national register. In addition, a further 25 constituent assembly representatives were nationally elected from a list of 522 candidates. The constituent assembly, later called the Constitutional Council, unanimously passed a constitutional bill in close accord with the conclusions of the national assembly in 2011. However, parliament has not yet ratified the bill, even though the bill received the support of 67% of voters in a national referendum in October 2012. Parliament’s disregard for the result of the constitutional referendum is seen by many as a serious blow to Iceland’s democracy. Before the parliamentary elections in October 2016 all four opposition parties declared that, if elected, they would seek to form a government that would ratify the new constitution. In the 2017 election campaign, five parties declared, to varying degrees, support for the new constitution, namely the Social Democrats, the Pirate Party, the Left-Green Movement, Regeneration and Bright Future. The support for these parties totaled 46% of the votes and 28 out of 63 seats. The only firm opponent of the new constitution, the Independence Party, won 25% of the vote and 16 seats.

Wage disputes affected labor market stability in 2014 and 2015 beginning with strikes by doctors and nurses. In late 2015, the government, several trade unions and employers’ associations signed a deal on wage contract negotiation methods, which would move Iceland toward the so-called Nordic corporatist model. This SALEK deal covered about 70% of all trade union members. At the time of writing, the other 30% still have not made any SALEK deal and a realization of the deal seems to be distant.

Citations:
Constitutional Bill (2012), http://www.thjodaratkvaedi.is/2012/ en/proposals.html

Euractiv.com, http://www.euractiv.com/enlargement /icelanders-opens-way-crowdsource-n ews-515543

Gylfason, Thorvaldur: Consitution on ice, in Erlingsdóttir, Irma, Valur Ingimundarson, and Philipe Urlfalino (eds.), The Politics of the Icelandic Crisis (forthcoming). Also available as CESifo Working Paper No. 5056, November 2014. See https://notendur.hi.is/gylfason/cesifo1_wp5056.pdf

Policy Communication

#24

To what extent does the government achieve coherent communication?

10
 9

The government effectively coordinates the communication of ministries; ministries closely align their communication with government strategy. Messages are factually coherent with the government’s plans.
 8
 7
 6


The government coordinates the communication of ministries. Contradictory statements are rare, but do occur. Messages are factually coherent with the government’s plans.
 5
 4
 3


The ministries are responsible for informing the public within their own particular areas of competence; their statements occasionally contradict each other. Messages are sometimes not factually coherent with the government’s plans.
 2
 1

Strategic communication planning does not exist; individual ministry statements regularly contradict each other. Messages are often not factually coherent with the government’s plans.
Coherent Communication
5
The government of Iceland generally speaks with one voice. However, in the so-called West Nordic administrative tradition, where ministers are responsible for institutions subordinate to their ministries, every minister has the power to make decisions without consulting other ministers. Nevertheless, ministers rarely contradict one another and generally try to make decisions through consensus.

However, the 2009-2013 cabinet proved to be an exception to this tradition since three Left-Green Movement parliamentary members withdrew from the governing party coalition. That brought the government close to the threshold of becoming a minority government and forced it to negotiate with the opposition on contentious issues. Despite this internal dissent, the cabinet coalition held together to the end of its mandated term.

Under the 2013-2016 center-right cabinet comprising the Progressive Party and the Independence Party the situation has reverted to the traditional Nordic practice. The leaders of the two coalition parties sometimes issued conflicting statements, but this did not result in any open conflict.

In early April, however, events took a dramatic turn following the publication of the Panama Papers, 11.5 million leaked documents that detail financial and attorney-client information for more than 200,000 offshore entities, exposing how wealthy individuals and public officials may use offshore bank accounts and shell companies to conceal their wealth or avoid taxes. On 3 April, the Icelandic state-run television (RÚV) showed an interview with Prime Minister Gunnlaugsson (Progressive Party) on a Swedish TV-program “Uppdrag granskning” (Mission Investigation). He was asked about his and his wife’s ownership of an offshore bank account in the Virgin Islands. Gunnlaugsson denied ownership, but after having been confronted with the evidence, he walked out of the interview. On the second day after this incident he went to the president, without the knowledge of the leader of the Independence Party, to try to convince him to dissolve parliament and declare new elections. The president refused. Later the same day, Gunnlaugsson resigned as prime minister but continued as chairman of the Progressive Party. The vice-chairman of the party, Sigurður I. Jóhannesson, took over as prime minister and new elections were announced for the autumn 2016. At the party congress in early October, Gunnlaugsson lost the chairmanship to Jóhannesson. In addition to Prime Minister Gunnlaugsson, the names of the Independence Party leader (finance minister) and deputy leader (interior minister) were both found in the Panama Papers, as was the name of the president’s wife, the first lady. Thousands of protesters took to the streets in Reykjavík as in 2008, forcing the government to advance the upcoming parliamentary election by six months, from April 2017 to October 2016. These events starting with the world-famous TV interview with the Icelandic prime minister at the beginning of April are the newest, and by far the most famous, example of open conflict in an Icelandic cabinet, earning the 2013-2016 cabinet the nickname “Panama government.”

An alleged breach of confidentiality and concealment led to the breakup of the Benediktsson cabinet (2017-2017) in September 2017. After only eight months in power, the center-right three-party coalition collapsed when Bright Future announced that they were ending their coalition with the Independence Party. A two-sentence post on the official Facebook page of Bright Future stated: “The leadership of Bright Future has decided to end cooperation with the government of Bjarni Benediktsson. The reason for the split is a serious breach of trust within the government.” Here, they were referring to news, which had broken earlier that evening, that the prime minister’s father had provided a recommendation letter of “restored honor” for a man convicted of having raped his stepdaughter almost daily for 12 years. Benediktsson, despite having been informed about this by the minister of justice in July 2017, kept this matter to himself until a parliamentary committee compelled the ministry to release this information to the press. This affair reflects the pervasive culture of secrecy that permeates Icelandic politics.

Implementation

#8

To what extent can the government achieve its own policy objectives?

10
 9

The government can largely implement its own policy objectives.
 8
 7
 6


The government is partly successful in implementing its policy objectives or can implement some of its policy objectives.
 5
 4
 3


The government partly fails to implement its objectives or fails to implement several policy objectives.
 2
 1

The government largely fails to implement its policy objectives.
Government Efficiency
6
As a rule, the strength of the executive branch vis-à-vis the legislative branch ensures that bills proposed by the government are rarely rejected by parliament. Thus, governments are usually able to achieve all of their policy objectives.

However, legislative proposals by the 2009-2013 left-wing cabinet were twice overturned by the public in national referendums, in 2009 and 2011. On both occasions, the referendums concerned the introduction of government guarantees for losses experienced by Icelandic bank account holders based in the United Kingdom and the Netherlands. In both cases, the president refused to sign into effect the government’s legislative proposal, which triggered a constitutional clause referring the proposed legislation to a national referendum.

Other examples of executive weakness include the failure of the 2009-2013 cabinet to deliver on three important elements of its platform: a new constitution, a reform of the system managing Iceland’s fisheries, and a deal on Iceland’s accession to the European Union that could be put to a national referendum. These failures were due to internal disagreements between the coalition parties (Social Democrats and Left-Green Movement) and the obstructive tactics of the opposition, including extensive, unprecedented filibustering.

The cabinets of Gunnlaugsson (2013-2016) and Jóhannesson (2016), both with a parliamentary majority of 38-25, had no problems in implementing their policy objectives, even though some ministerial initiatives have been thwarted. The Benediktsson three-party coalition cabinet (2017-2017) had much smaller majority, the coalition controlled 32 seats and opposition parties controlled 31 seats. However, this small margin never led to bills being overturned during the coalition’s brief tenure.

To what extent does the organization of government provide incentives to ensure that ministers implement the government’s program?

10
 9

The organization of government successfully provides strong incentives for ministers to implement the government’s program.
 8
 7
 6


The organization of government provides some incentives for ministers to implement the government’s program.
 5
 4
 3


The organization of government provides weak incentives for ministers to implement the government’s program.
 2
 1

The organization of government does not provide any incentives for ministers to implement the government’s program.
Ministerial Compliance
9
Ministers usually follow party lines, but individual ministers have considerable authority to make independent decisions. However, non-collective decisions are rare.

Under the 2009-2013 cabinet, dissent between ministers had little to do with specific ministerial actions. For example, when the parliament voted in 2009 on Iceland’s application for EU membership, one government minister, Jón Bjarnason from the Left-Green Movement, voted against the resolution. Bjarnason repeatedly expressed his opposition to Iceland’s accession to the European Union throughout his tenure. Subsequent cabinets have experienced no such ministerial discord – except the aforementioned episode of former prime minister Sigmundur Davíð Gunnlaugsson in early April 2016 as the Panama Papers scandal broke.

How effectively does the government office/prime minister’s office monitor line ministry activities with regard to implementation?

10
 9

The GO / PMO effectively monitors the implementation activities of all line ministries.
 8
 7
 6


The GO / PMO monitors the implementation activities of most line ministries.
 5
 4
 3


The GO / PMO monitors the implementation activities of some line ministries.
 2
 1

The GO / PMO does not monitor the implementation activities of line ministries.
Monitoring Ministries
10
In March 2016, revised regulations regarding the monitoring and oversight of ministries were introduced, replacing those from 2013. Under these regulations, the Prime Minister’s Office must review bills from all ministries, with the exception of the national budget bill. Accordingly, all bills need to be sent to the Prime Minister’s Office no later than one week before the respective cabinet meeting. Before the bill can be discussed by the cabinet, a statement from the Prime Minister’s Office needs to be processed (Reglur um starfshætti ríkisstjórnar, No. 292/2016). This regulatory change is a step toward stronger, formal monitoring of ministerial bills.

Citations:
Regulations on government procedures. (Reglur um starfshætti ríkisstjórnar. Nr. 292/2016 18. mars 2016).

How effectively do federal and subnational ministries monitor the activities of bureaucracies and executive agencies with regard to implementation?

10
 9

The ministries effectively monitor the implementation activities of all bureaucracies/executive agencies.
 8
 7
 6


The ministries monitor the implementation activities of most bureaucracies/executive agencies.
 5
 4
 3


The ministries monitor the implementation activities of some bureaucracies/executive agencies.
 2
 1

The ministries do not monitor the implementation activities of bureaucracies/executive agencies.
Monitoring Agencies, Bureaucracies
3
The monitoring of public agencies by ministries is weak. Public agencies and government ministries have often spent more money than allotted to them in the government budget. This problem has been exacerbated due to the limited capacity of the National Audit Office (Ríkisendurskoðun) to monitor the activities of those agencies within its jurisdiction. From 2000 to 2007, the National Audit Office audited only 44 out of 993, or 4.4%, of the agencies within its jurisdiction. In 2009, almost half of the National Audit Office’s efforts (43%) were diverted to financial auditing related in some way to the financial crash and its consequences. Moreover, National Audit Office’s resources have been cut. Between 2011 and 2012, the number of personnel was reduced from 47 to 42. At the end of 2016, the number was up to 45 so the situation seems to be recovering and the National Audit Office is again being strengthened.

Citations:
Nation Audit Office Annual Report 2012. (ÁRSSKÝRSLA RÍKISENDURSKOÐUNAR 2012. APRÍL 2013).
Nation Audit Office Annual Report 2013. (ÁRSSKÝRSLA RÍKISENDURSKOÐUNAR 2013. APRÍL 2014).
Nation Audit Office Annual Report 2014. (ÁRSSKÝRSLA RÍKISENDURSKOÐUNAR 2014. APRÍL 2015).
Nation Audit Office Annual Report 2015. (ÁRSSKÝRSLA RÍKISENDURSKOÐUNAR 2015. MARS 2016).
Nation Audit Office Annual Report 2016. (ÁRSSKÝRSLA RÍKISENDURSKOÐUNAR 2016. JÚNÍ 2017).

To what extent does the central government ensure that tasks delegated to subnational self-governments are adequately funded?

10
 9

The central government enables subnational self-governments to fulfill all their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
 8
 7
 6


The central government enables subnational governments to fulfill most of their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
 5
 4
 3


The central government sometimes and deliberately shifts unfunded mandates to subnational governments.
 2
 1

The central government often and deliberately shifts unfunded mandates to subnational self-governments.
Task Funding
8
The issue of grant-based funding has been a constant source of conflict between local and central governments. Meanwhile, the division of responsibilities between the central government and local governments has changed, but not radically. In 1996, full responsibility for primary education was transferred from the central government to local governments. In general, this transfer of responsibilities has been achieved without imposing a heavy financial burden on local governments. However, some of the smallest municipalities have experienced fiscal difficulties as a result of these transfers, and have either been forced to amalgamate or cooperate on service provision with neighboring municipalities. Full responsibility for services for disabled individuals was transferred to local governments in 2010 and took effect in January 2011, without conflicts concerning funding arrangements arising between the central government and local governments. Further transfers of responsibility have been planned – though without any dates set, including responsibility for elderly care. Negotiations on the transfer of elderly care have been repeatedly postponed due to disagreements over funding arrangements between central and local governments. The negotiating and preparation committee with representatives from state and local levels has in fact had no formal meeting since August 2013 (www.velferdarraduneyti.is/yfirfaerslan/).

Citations:
Eythórsson, Grétar Thór (2017): Bigger and stronger together. How Icelandic municipalities solve their lack of capacity and scale economy. In: Teles, Filipe & Swianiewicz, Pawel (Eds.): Inter-Municipal Cooperation in Europe
Institutions and Governance. Palgrave MacMillan. DOI: 10.1007/978-3-319-62819-6

Eythórsson, Grétar Thór (2012): Efling íslenska sveitarstjórnarstigsins: Áherslur, hugmyndir og aðgerðir. In: Icelandic Review of Politics and Administration. Vol 8, No 2. 2012. http://www.irpa.is/article/view/a.2012.8.2.12/pdf_278

www.velferdarraduneyti.is/yfirfaerslan/

To what extent does central government ensure that subnational self-governments may use their constitutional scope of discretion with regard to implementation?

10
 9

The central government enables subnational self-governments to make full use of their constitutional scope of discretion with regard to implementation.
 8
 7
 6


Central government policies inadvertently limit the subnational self-governments’ scope of discretion with regard to implementation.
 5
 4
 3


The central government formally respects the constitutional autonomy of subnational self-governments, but de facto narrows their scope of discretion with regard to implementation.
 2
 1

The central government deliberately precludes subnational self-governments from making use of their constitutionally provided implementation autonomy.
Constitutional Discretion
10
Local government in Iceland has no constitutional status, beyond a paragraph in the 1944 constitution that states that municipal affairs shall be decided by law. The Local Government Act (Sveitarstjórnarlög) states that local governments shall manage and take responsibility for their own affairs. The parliament or the responsible ministry – the Ministry of the Interior – have the power to make decisions that affect local government. However, beyond these decisions, local governments are free to engage in any governing activities that are not forbidden by law.

Citations:
Eythórsson, Grétar (1999): The Iceland National Report. In Jacob, Linder, Nabholz and Heierli (eds.): Democracy and Local Governance. Nine Empirical Studies. Institute of Political science, University of Bern, Switzerland (p. 62-88).

Local Government Act. (Sveitarstjórnarlög nr. 128/2011).

To what extent does central government ensure that subnational self-governments realize national standards of public services?

10
 9

Central government effectively ensures that subnational self-governments realize national standards of public services.
 8
 7
 6


Central government largely ensures that subnational self-governments realize national standards of public services.
 5
 4
 3


Central government ensures that subnational self-governments realize national minimum standards of public services.
 2
 1

Central government does not ensure that subnational self-governments realize national standards of public services.
National Standards
8
A diverse set of special laws set national minimum standards for the provision of local government services. These laws relate particularly to primary education, child protection, and standards of social services. Nevertheless, central government monitors compliance with some standards, and has even raised certain standards to an unattainable level in view of the financial support available to local governments.

Adaptability

#22

To what extent does the government respond to international and supranational developments by adapting domestic government structures?

10
 9

The government has appropriately and effectively adapted domestic government structures to international and supranational developments.
 8
 7
 6


In many cases, the government has adapted domestic government structures to international and supranational developments.
 5
 4
 3


In some cases, the government has adapted domestic government structures to international and supranational.
 2
 1

The government has not adapted domestic government structures no matter how useful adaptation might be.
Domestic Adaptability
7
While not a member of the European Union, Iceland has since 1994 been a member of the European Economic Area (EEA), and has integrated and adapted EU structures into domestic law to a considerable extent. Under the EEA agreement, Iceland is obliged to adopt around 80% of EU law. Iceland is also responsive to comments made by the Council of Europe, countries belonging to the Schengen Agreement, and U.N. institutions. As one of the five full members, Iceland is bound by every unanimous decision of the Nordic Council of Ministers. However, the council deals only with issues connected to Nordic cooperation. The structure and organization of Iceland’s government accords well with international practice, and seems to be under constant review. The 2009-2013 government attempted to streamline and rationalize the ministry structure in order to weaken the long-standing links between special-interest organizations and the ministries. Through a process of mergers, the number of ministries was reduced from 12 to 8. The Gunnlaugsson cabinet (2013-2016) partially reversed some of these mergers and increased the number of ministers to 10. Further, the Benediktsson cabinet (2017-2017) increased the number of ministers by one by splitting the Ministry of Interior in two in January 2017.

To what extent is the government able to collaborate effectively in international efforts to foster global public goods?

10
 9

The government can take a leading role in shaping and implementing collective efforts to provide global public goods. It is able to ensure coherence in national policies affecting progress.
 8
 7
 6


The government is largely able to shape and implement collective efforts to provide global public goods. Existing processes enabling the government to ensure coherence in national policies affecting progress are, for the most part, effective.
 5
 4
 3


The government is partially able to shape and implement collective efforts to provide global public goods. Processes designed to ensure coherence in national policies affecting progress show deficiencies.
 2
 1

The government does not have sufficient institutional capacities to shape and implement collective efforts to provide global public goods. It does not have effective processes to ensure coherence in national policies affecting progress.
International Coordination
5
Iceland is an active participant in international forums, but seldom initiates measures. Iceland was a founding member of the United Nations, the IMF, the World Bank, and NATO. In 2008, Iceland sought a U.N. Security Council seat, but eventually lost out to Austria and Turkey. Largely, Iceland has worked cooperatively within international frameworks, but has not led any significant process of international coordination. Iceland did participate in peacekeeping efforts in Iraq and modestly participates in the work of the Organization for Security and Cooperation in Europe. In 2009, Iceland applied for EU membership. Those negotiations were postponed at the beginning of 2013 due to dissent between the coalition partners. The 2013-2016 cabinet did not renew negotiations and finally withdrew Iceland’s application for membership in 2015. As a result, the European Union no longer includes Iceland on its official list of applicant countries. Even so, the European Union may continue to view Iceland as an applicant country on the grounds that that the minister of foreign affairs was not authorized to withdraw an application approved by parliament without parliament’s approval.

This question remains unsettled. It remains to be seen if a national referendum will be held on whether Iceland should resume its membership negotiations with the European Union. The cabinet of 2013-2016 rejected that option, producing a split within the Independence Party and leading to the establishment of a splinter party, Regeneration. Yet, when the Independence Party formed a cabinet coalition with the breakout party, Regeneration, and Bright Future in January 2017, the coalition agreement included only a vaguely worded intention to have a national referendum on the issue. Following the breakup of that coalition in September 2017, which led to a new election in late October 2017, the question remains unresolved. A national referendum on this issue or any issue would raise criticisms in view of the parliament’s failure to respect the outcome of the 2012 constitutional referendum.

Organizational Reform

#14

To what extent do actors within the government monitor whether institutional arrangements of governing are appropriate?

10
 9

The institutional arrangements of governing are monitored regularly and effectively.
 8
 7
 6


The institutional arrangements of governing are monitored regularly.
 5
 4
 3


The institutional arrangements of governing are selectively and sporadically monitored.
 2
 1

There is no monitoring.
Self-monitoring
5
Iceland has no formal political or administrative system of self-monitoring organizational reform. Monitoring of institutional arrangements is irregular. Institutional arrangements are occasionally reviewed. For example, the 2009-2013 cabinet reshuffled several ministerial portfolios to strengthen policy coordination and administrative capacity. The 2013-2016 cabinet immediately reversed some of these mergers, increasing the number of cabinet ministers from 8 to 10 and the 2017 cabinet further increased the number to 11. The draft constitution from 2011-2012 stipulates that cabinet ministers should not exceed 10.

To what extent does the government improve its strategic capacity by changing the institutional arrangements of governing?

10
 9

The government improves its strategic capacity considerably by changing its institutional arrangements.
 8
 7
 6


The government improves its strategic capacity by changing its institutional arrangements.
 5
 4
 3


The government does not improve its strategic capacity by changing its institutional arrangements.
 2
 1

The government loses strategic capacity by changing its institutional arrangements.
Institutional Reform
8
Iceland’s recent governments have sought to improve the central government’s strategic capacity by reviewing ministerial structures. The 2007-2009 cabinet of Haarde initiated this process, while the 2009-2013 cabinet of Sigurðardóttir continued this process by reducing the number of ministries from 12 to 8 and reshuffling ministerial responsibilities. Some of the ministries were administratively weak because of their small size. The capacity of these small ministries to cope with complex policy issues, such as international negotiations, was inefficient and ineffective. Further, the informality of small ministries was a disadvantage. The 2013-2016 and 2017-2017 cabinets, however, have more or less reversed these reforms by again increasing the number of ministers by three.
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