Policy Performance


Economic Policies

Despite significant gains as it emerges from austerity, Portugal scores comparatively poorly overall (rank 35) with respect to economic policies. Its score on this measure has improved by 1.5 points since 2015.

The Costa government has continued its strategy of gradually reversing past austerity measures without undermining budgetary policy or fiscal consolidation. Growth levels have been low but positive. A small decline in 2016’s growth relative to 2015 was worrisome.

Unemployment rates have fallen steadily, reaching 8.5% in late 2017, down more than two points in a year. These gains have been driven by growth and emigration. The minimum monthly wage has been increased. Business associations approved this policy in return for a reduction in their social-security contributions for affected workers.

The crisis-era extraordinary income surtax has largely been phased out, but taxes remain high. Tax avoidance remains a problem. Deficits have been brought to moderate levels, resulting in the first significant bond-rating upgrade in five years. Debt levels remain very high. The country’s tech-startup scene is gaining international attention.

Social Policies

With the new government focusing on revitalizing social systems, Portugal falls into the lower-middle ranks (rank 26) in the area of social policies. Its score on this measure represents a gain of 0.4 points relative to its 2014 level.

The education sector has been harmed by years of budget cuts. However, PISA results have improved, and a new program will provide free primary-school textbooks. The Costa government has focused on reversal of austerity measures imposed on pensions and welfare. Spending on families has increased, and the share of people at risk of poverty fell for the first time since 2007.

The health care system produces comparatively good outcomes, but has been stressed by spending cuts. Child-support credits have been expanded, and the birth rate has returned to marginal growth following precipitous decline. A study has shown a need for family-policy reforms, and the government appears likely to pursue its recommendations.

Pension values have been increased. The retirement age is now indexed to life expectancy, but the government has promised to allow all people who began working between 12 and 14 to retire by age 60. Integration policy is strong. Portugal accepted refugees as part of the EU resettlement program, but many have left. Serious forest fires killed dozens of people in 2017.

Environmental Policies

With reasonable outcomes despite policy gaps, Portugal falls into the upper-middle ranks (rank 17) with regard to environmental policies. Its score on this measure has improved by 0.1 point relative to its 2014 level.

Successive governments have failed to implement adequate policies on the issues of climate change, protection of water resources, biodiversity and forest conservation. Nevertheless, the decline in economic activity has eased environmental pressure.

The Costa government remains committed to the development of renewable energy sources, but a renewal of the generous pre-crisis public support given to wind power appears unlikely. The government gave its approval to a nuclear facility in Spain that will draw on river water upstream of Portugal.

The country ratified the Paris climate-change accord in late 2016. A National Strategy for Sustainable Development has long been under discussion, but implementation continues to be postponed. The country largely works through the European Union on international environmental issues, and is particularly active in promoting global protection of marine environments.



Quality of Democracy

With its overall legalistic society, Portugal falls into the upper-middle ranks (rank 15) with regard to its quality of democracy. Its score in this area is unchanged relative to its 2014 level.

Electoral policies are generally fair. Racist and fascist parties are banned. Voting rights have been extended to foreigners living in Portugal. Public subsidies to parties and campaigns have been reduced, while campaign-finance monitoring is overall somewhat weak. Referendums can be held only with elected officeholders’ approval.

Financial pressures have increased volatility in media-organization ownership. A broad range of government information is available to citizens, but is often unorganized and difficult to understand. While civil rights are constitutionally protected, the police and justice systems have been the focus of human-rights-related criticism.

Gender and racial discrimination remains moderate concerns, with the gap between average pay for women and men having increased steadily in recent years. Corruption is a persistent problem. Courts are independent and strong, but slow.



Executive Capacity

With policy flexibility constrained by financial concerns, Portugal falls into the lower-middle ranks (rank 26) with regard to executive capacity. Its score on this measure is unchanged relative to its 2014 level.

The impact of strategic-planning bodies is small. The Prime Minister’s Office (PMO) has limited policy-assessment capabilities, while the Ministry of Finance’s power remains strong given the ongoing budgetary constraints. Informal coordination mechanisms are vital particularly within the current minority government, which relies on other parties for parliamentary support.

RIA instruments are rarely utilized, with assessments remaining unsystematic. A new methodology for evaluating proposals’ economic impact has been implemented. The government consults particularly with economic actors. While communication is general effective, several notable failures were evident in 2017.

The Costa government has successfully balanced austerity reductions with continued budgetary restraint. Ministers have some incentive to follow the government program, though ministers from coalition parties are inevitably less motivated. A significant decentralization program is underway, with considerably greater funding provided to local governments.

Executive Accountability

With notable gaps in this area, Portugal scores relatively poorly in international comparison (rank 31) with regard to executive accountability. Its score on this measure has improved by 0.1 point relative to 2014.

Parliamentarians have few official support resources, through formal oversight powers are generally strong. The audit office is a judiciary-branch body, as is the ombudsman.

The population’s surge of crisis-driven interest in policy and politics seems to be receding somewhat. Policy knowledge remains uneven, undermined by insufficiently clear government and opposition communication, a weak civil society and an often scandal-focused media. In-depth journalistic policy analysis remains rare.

Political-party decision-making styles range widely. Unions and employers’ associations can formulate relevant policies, but are largely reactive. Non-economic interest associations continue to have little impact despite signs of economic recovery.
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