Executive Summary

The period under analysis here provides seemingly contradictory evidence with regard to governance in Portugal.
Austerity loosens, economy grows
On one reading, we could say that Portugal performed spectacularly during the review period. The budget deficit was reduced to 2% of GDP, the lowest level since democratization. The European Commission closed the country’s excessive deficit procedure, which had been open since 2009. Conditions of austerity have been gradually, if not yet wholly, alleviated. Portugal has increasingly become a poster child for the success of post-bailout policies within the EU. The economy has been growing, boosted by exports and tourism. Unemployment rates have fallen to single digits. The country has become increasingly attractive to the tech sector, a fact expressed by its ability to play host to the 2016 and 2017 Web Summits. All this is symbolically reflected in the country’s growing international popularity, as seen in the host of foreign companies and individuals – including many celebrities – that moved to Portugal during this period.
Stable coalition despite skepticism
On the political side, António Costa’s minority government has proved stable, while also showing itself able to bring the parties to its left – the Left Bloc (Bloco de Esquerda, BE), the Communist Party (Partido Comunista Português, PCP) and the Green Party (Partido Ecologista os Verdes – PEV) – into a governing alliance that had hitherto seemed impossible. This has led to increasing international interest in the Portuguese political solution – the “geringonça” (or “contraption”), as this government has been dubbed. Moreover, the period was marked by a largely collaborative dynamic between the government and the very popular president of the republic, Marcelo Rebelo de Sousa, despite the latter’s membership in the center-right Social Democrat Party (Partido Social Democrata, PSD).
Serious governance gaps remain
The above elements would suggest an overwhelmingly positive assessment regarding Portugal’s governance. However, this period was also marked by events that underline the country’s historic governance weaknesses. In particular, the country was rocked by devastating and deadly forest fires; one fire in June caused some 65 deaths, and a second set in October led to a further 45 deaths. These fires, along with the faulty civil-protection response that allowed so many deaths – many of which, it transpired, could have been avoided – reflected a host of deficiencies that have been present in Portuguese governance for decades, including weak strategic planning, a lack of coordination, weak supervision and implementation of public policies, frequent changes in the law, and the lack of a stable policy framework. In June and October, these deficiencies came home to roost. These same governance weaknesses helped facilitate the theft of military equipment from the Tancos military base in late June (although this situation was resolved in October thanks to an anonymous tip that led to the retrieval of virtually all the lost material).
Uneven development revealed
Overall, the period highlights the dual nature of development in Portugal. While some sectors are modernizing, others remain neglected until a tragedy occurs, as with the forest fires of June and October 2017.
Strategic weaknesses hamper progress
Thus, while some positive changes in Portugal have been evident in this period, notably with regard to economic aspects in general and budgetary ones more specifically, these coexist with persistently low scores in governance dimensions pertaining to policy formulation. The regulatory impact assessment framework remains weak, as does the strategic component of decision-making and efforts to monitor institutional governing arrangements; moreover, there has been little systematic effort to improve strategic capacity by making changes to these institutional arrangements. As in the past, this weak capacity is likely to affect the quality and impact of new and existing policies. The Costa government program does include a number of measures regarding governance-quality improvement, and some initial steps have been taken in this area. The question is whether this government will be able to deliver in a domain where so many predecessors have promised more than they achieved in terms of state reform.
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