Policy Performance


Economic Policies

Recovering handily from export interruptions, Lithuania falls into the upper-middle ranks internationally (rank 18) in the area of economic policies. Its score on this measure has improved by 0.5 points since 2014.

Growth rates have accelerated again after a short slowdown. Producers have adjusted to a drop in exports to Russia by reorienting toward other markets. A controversial new labor code has come into force after adjustments seeking to balance labor-market flexibility and employee protection.

Unemployment rates have declined to moderate levels. The mismatch between labor supply and market demand has become the main labor-market issue. Minimum wages have been steadily increased. Labor taxes are high, as are tax-evasion rates. A major tax reform is being discussed.

Structural deficits have been very low, and debt is moderate by EU standards. A fiscal-discipline law provides incentives for the continuation of balanced fiscal policies. 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 0.2 points since 2014.

Education quality is a concern, with students showing middling achievements, though spending levels are comparatively high. Demographic changes are resulting in strong declines in the annual number of graduates. Poverty-risk and social-exclusion rates are high. New social-policy measures and funding programs are targeting at-risk pensioners, children and low-income families.

Health outcomes are poor in cross-EU comparison. Out-of-pocket payments remain high, reducing access for some groups. The government has placed considerable focus on reducing alcohol availability. The share of women employed is high, but child-poverty rates remain concerning, and child-care provision is insufficient. A new family-support law has been criticized as discriminatory.

The pension system does not adequately protect against poverty, though new funds will be allocated to the system in 2018. Immigration is comparatively rare. The country committed to taking more than 1,100 asylum seekers over two years, but actual numbers have been far lower, and many have left the country.

Environmental Policies

Despite a high energy intensity, Lithuania scores well in international comparison (rank 7) 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. However, the European Commission has cited the county for failing to comply with EU wastewater treatment standards.

The recycling rate is well below the EU average, and the removal of a landfill tax has discouraged 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 is unchanged relative to its 2014 level.

Campaign-finance laws restrict corporate donations, and contributions must be made public. Sanctions for violations have been increased, but serious loopholes remain. State funding provides the largest share of party revenue. A referendum to amend the constitution has been considered.

The media is broadly independent, but shows increasing concentration. A recently passed 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 subject to temporary broadcast bans. 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 is unchanged relative to its 2014 level.

While strategic planning is well institutionalized, the planning system suffers from unnecessary complexity. The government-office has been reorganized to improve policy formulation and quality control. Line ministries have considerable autonomy, but work collaboratively with the prime minister’s office. Informal coordination is important but subordinated to formal decision-making mechanisms.

RIAs are more formal than substantive. Public consultation is routine, but not generally aimed at development of consensus. Businesses, unions and the government recently signed a significant tax and wage accord. The current government has pushed through several key reform policies, but a party split could hamper future progress.

A lack of reliable and comprehensive data on public-service provision hampers monitoring and standardization. A recently introduced procedure for funding municipalities has increased dependence on central-government grants. Adaptability, particularly in the context of EU fund absorption, 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 0.1 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 performance has been widely praised, but parliament often ignores its criticism of national budgets. The several ombuds offices have taken an increasingly proactive approach to human-rights violations, but lack broad legal authority.

Ordinary members often have little ability to influence critical political-party decisions. The first direct election of the Social Democratic Party’s chairperson split the party, which is part of the governing coalition. Interest groups generally have limited ability to formulate well-crafted policies.
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