Cyprus

   

Executive Capacity

#41
Key Findings
With numerous gaps in central planning and strategic powers, Cyprus receives the SGI 2018’s lowest overall score (rank 41) with regard to executive capacity. However, its score in this area has improved by 0.9 points since 2014.

Post-crisis reforms improving strategic planning capacities have been narrowed in scope, with planning remaining fragmented between ministries, without a viable centralized coordination body. Line ministries draft bills, and the finance minister has decision-making power on budgetary proposals.

The effects of a new RIA system have been muted by shifting administrative responsibility. Numerous high-impact policies are introduced without assessment. Ex post assessment is not a part of government practice. Government communication relating to serious political issues has been contradictory or even confusing.

The government has effectively restored economic growth and investment credibility. Reforms are needed to improve municipal financial management. Regulatory enforcement tends to be biased toward powerful groups and individuals.

Strategic Capacity

#39

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
4
Reforms launched in 2014 began integrating strategic planning into the country’s administrative practices, a key omission over previous years. To this effect, the competences of the Planning Bureau, renamed “Directorate General for European Programs, Coordination and Development” (DGEPCD) were extended to include planning, coordination, monitoring, and evaluation. However, the intended tasks have been drastically reduced, with decisive powers remaining with the Ministry of Finance.

The law on fiscal responsibility was adopted in 2014 aiming to enable the government to identify goals and design policy actions based on strategic planning. Its implementation has stalled as attempts to enhance the capacity and planning of personnel have been constrained by the absence of political will. Planning is fragmented between ministries, capacity levels remain low and not all services are involved. A central coordination body and planning with broader participation are missing. As a result, planning is dominated by the budgetary and fiscal considerations of the Ministry of Finance. Additionally, efforts for coherent strategic planning are likely to be compromised by ad hoc policies, such as the citizenship-by-investment scheme.

Citations:
1. The Cyprus Investment Programme, or Citizenship by Investment, http://www.moi.gov.cy/moi/moi.nsf/All/0A09FCB93BA3348BC22582C4001F50CF

Does the government regularly take into account advice from non-governmental experts during decision-making?

10
 9

In almost all cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 8
 7
 6


For major political projects, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 5
 4
 3


In some cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 2
 1

The government does not consult with non-governmental experts, or existing consultations lack transparency entirely and/or are exclusively pro forma.
Expert Advice
3
The appointment of scholars to governing bodies of quasi-governmental institutions and newly created consultative bodies increased since 2014. New consultative bodies were created to advise the government on economic issues, energy policy and geostrategic studies. The administration has also sponsored research at institutes and universities, though this has been ad hoc and sporadic.

There is a long tradition of establishing advisory bodies, but their tasks and scope of work were limited to informing the public, raising awareness, drafting reports, or offering proposals to the government. The non-binding character of their proposals meant that decision-makers would pay little attention to them. One example is the operation of the Fiscal Council, whose advice the government disregards almost completely. Similarly, the Economic Council and Scientific Council became inoperative so much so that their members learned from the media that new members had replaced them.

Generally, there is no established culture of consultation between the state and external academic experts or, more broadly, thinktanks.

Citations:
1. Cabinet establishes new economic council after letting predecessor die, Cyprus Mail, 13 June 2018, https://cyprus-mail.com/2018/06/13/cabinet-establishes-new-economic-council-after-letting-predecessor-die/

Interministerial Coordination

#41

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

10
 9

The GO / PMO provides regular, independent evaluations of draft bills for the cabinet / prime minister. These assessments are guided exclusively by the government’s priorities.
 8
 7
 6


The GO / PMO evaluates most draft bills according to the government’s priorities.
 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
2
Under the constitution, line ministers are fully responsible for their ministries. They draft bills and forward them to the Secretariat of the Council of Ministers, which supports the cabinet’s work. The secretariat forwards decisions to relevant offices and eventually monitors implementation. Though, “the general direction and control of the government and the direction of general policy” lies with the Council of Ministers, the council does not possess administrative depth and the necessary mechanisms to collect advice and collectively chart policy. The only advice received is limited to constitutionality checks of legislative drafts provided by the attorney general.

There might be some GO control by the minister of finance and cabinet under the law on fiscal responsibility. This is limited to mostly budgetary issues.

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 between 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
3
The services within the presidential palace are essentially ad hoc in character and determined by the president for the duration of their term. Similarly, the tasks of the Secretariat of the Council of Ministers are limited mostly to providing secretarial support. The involvement of the Attorney General’s Office consists in effecting legality checks of draft legislation. Ministries tasked with drafting laws can refer to policies formulated by the government or to frameworks decided by the cabinet. It appears that draft laws are discussed only during the presentation and deliberation process in the Council of Ministers and not within an advanced and broader policy discussion.

Under the law on fiscal responsibility, the budgetary aspects of policy proposals are controlled by the finance minister to ensure compliance with general budgetary plans. No central coordinating body has thus far been established.

How effectively do ministerial or cabinet committees coordinate cabinet proposals?

10
 9

The vast 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
5
Forming ad hoc interministerial committees is a regular practice. The number of ministries, limited to 11, results in overlapping competencies and a greater need for coordination. The committees’ tasks focus on procedural and sector-specific matters that may affect more than one ministry. The formulation of general policy frameworks is also within their purview. They are supported by departments or technical committees mainly from within the ministries; in some cases, contributions from external experts are sought. The scope of work and the degree of efficiency in the committees’ coordination are not easy to assess, given their ad hoc character and that their reports are not published.

Citations:
1. Cabinet orders review of crisis management, Cyprus Mail, 31 July 2018, https://cyprus-mail.com/2018/07/31/cabinet-orders-review-of-crisis-management/

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
5
The constitution’s limit of the number of ministries to 11 results in each having a broad area of responsibility that has been extended to new fields since EU membership. While ministry officials and civil servants participate in ad hoc bodies or seek coordination with other ministries, final decisions rest with the ministers themselves, often based on political criteria. Constitutional powers accorded to ministers render ministries fiefdoms, with ministers operating as absolute rulers.

More interministerial interaction was promoted through new units created in the framework of the reform effort. In July 2018, the parliament voted against legislation to establish a coordinating sub-ministry of development and the government dissolved the Unit for Administrative Reform. It reallocated the latter’s tasks back to the ministries and, thus, the prospect of institutionalizing much needed consultation and coordination between line ministries on policy matters has been suspended.

Citations:
The Unit for Administrative Reform to be Dissolved, InBusiness, 27 July 2018, https://inbusinessnews.reporter.com.cy/financials/cyprus/article/191286/dialyetai-i-monada-dioikitikis-metarrythmisis [in Greek]

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
4
A practice of informal meetings exists but is infrequently utilized. During the post-2010 economic difficulties, more formal meetings took place than before. In the period under review, a very small number of ad hoc formal meetings took place. The crisis caused by the collapse of the Cooperative Bank in mid-2018 prompted various meetings searching for solutions that end with the adoption of new rules.

How extensively and effectively are digital technologies used to support interministerial coordination (in policy development and monitoring)?

10
 9

The government uses digital technologies extensively and effectively to support interministerial coordination.
 8
 7
 6


The government uses digital technologies in most cases and somewhat effectively to support interministerial coordination.
 5
 4
 3


The government uses digital technologies to a lesser degree and with limited effects to support interministerial coordination.
 2
 1

The government makes no substantial use of digital technologies to support interministerial coordination.
Digitalization for Interministerial C.
4
The use of digital technology covers a small spectrum of government work and activities as well as relations and interactions with citizens on public services. Some common IT programs aim at assisting government and interministerial coordination in a limited number of activities. They include payments by the Treasury and administration, preparing some parts of the budget, keeping track of payments, and assessing progress for projects funded by EU structural funds.

Citations:
On a system of digital archiving and exchange of documents, in Greek, http://www.mof.gov.cy/mof/dits/dits.nsf/All/D63B85881EA64743C2257D700026084B?OpenDocument

Evidence-based Instruments

#28

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
6
A RIA scheme was introduced in 2007 as part of a project on better regulation. A robust RIA tool was adopted in 2016 and training on its use made its application on 200 draft laws possible in 2017. In summer 2018, following the dissolution of the Unit for Administrative Reform, which operated at the presidential palace, RIA tasks were assigned to the Department of Public Administration and Personnel at the Ministry of Finance. The effects of this change remain unclear.

An issue of serious concern is the impact on the whole system of policies introduced without RIA via the discretionary powers of the Council of Ministers. The “investment program,” the granting of permits for the construction of buildings four to seven times higher than town planning allows, and the sale of Cypriot citizenship have an impact on a wide spectrum of rules and practices that neutralize RIA implementation and efforts for better regulation.

Citations:
1. Better Regulation Progress Report, May 2018 [in Greek], https://drive.google.com/file/d/1stXSvKF6tU2AeSXbBEbNGqfbdGLAjGfa/view?usp=sharing

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
A 2017 report on the implementation of the present system makes proposals to address various issues and improve the whole RIA process. These include the need for transparency, more systematic consultation, improved involvement of stakeholders and enhanced analysis of SMEs. Offering public access to submitted RIA documents and submitting the system to an independent evaluation remain mere proposals. Given that the better regulation project is in a transitional stage, with tasks assigned back to ministries, there are no updates available for 2018.

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
4
The assessment questionnaires inquire on positive and negative impacts of a policy proposal across various aspects of the economy, society, and environment as well as on the processes and work of the government. They also include questions on methods and processes followed, such as interactions with other ministries’ services and consultations with the public and other stakeholders.

There are three questionnaires: for new legislation or amendments, for legislation transposing EU directives into national law and for legislation ratifying international treaties.

Questions on sustainability are exclusively economic and focus on the budgetary impact and macroeconomic effects.

To what extent do government ministries regularly evaluate the effectiveness and/or efficiency of public policies and use results of evaluations for the revision of existing policies or development of new policies?

10
 9

Ex post evaluations are carried out for all significant policies and are generally used for the revision of existing policies or the development of new policies.
 8
 7
 6


Ex post evaluations are carried out for most significant policies and are used for the revision of existing policies or the development of new policies.
 5
 4
 3


Ex post evaluations are rarely carried out for significant policies and are rarely used for the revision of existing policies or the development of new policies.
 2
 1

Ex post evaluations are generally not carried out and do not play any relevant role for the revision of existing policies or the development of new policies.
Quality of Ex Post Evaluation
2
Given the deficiencies in strategic planning, ex-post evaluation has not been part of government practice. However, in the framework of commitments to reform the public administration, the government in recent years solicited the drafting of studies by the World Bank and others. These studies on the administration and line ministries aimed mainly at restructuring and reforming the administration and its procedures, while also reviewing their general policies. Specific policies in ministries are not evaluated and progress achieved so far remains limited.

Citations:
Public Administration Reform – Restructuring ministries and administration http://www.reform.gov.cy/en/public-administration-reform/restructuring-in-the-public-sector

Societal Consultation

#28

Does the government consult with societal actors in a fair and pluralistic manner?

10
 9

The government always consults with societal actors in a fair and pluralistic manner.
 8
 7
 6


The government in most cases consults with societal actors in a fair and pluralistic manner.
 5
 4
 3


The government does consult with societal actors, but mostly in an unfair and clientelistic manner.
 2
 1

The government rarely consults with any societal actors.
Public Consultation
5
Consultation with societal actors has been a general practice for decades, though generally left to the end of the process. Once a policy is decided or a draft bill is already before a parliamentary committee, stakeholders are invited to voice their views. Generally, vociferous stakeholders are more successful with their demands than less powerful groups and may engage in consultations before policy decisions are made. A decline of consultation practices was observed during the implementation of the Memorandum of Understanding (MoU). After exiting the MoU in early 2016, the government appeared more willing to accommodate previously rejected union demands. Also, under trade union pressure, it suspended projects including the privatization of telecoms and electricity utilities.

Public consultation before rulemaking is regularly practiced by only some departments and less systematically than expected. The results and impact of such consultations are not always transparent or published.

Industrial action by teachers unions in summer 2018 forced the government to cancel some policy-decisions it had taken; subsequently they engaged in negotiations on how to improve the education system.

In order to ensure approval of its policies by the parliament, the government consults with political parties, in particular when a major crisis is imminent. This happened in July 2018 when the collapse of the Cooperative Bank forced the adoption of a set of long overdue rules.

Citations:
1. Our view: 11th hour Co-op vote typical of lily-livered parties, Cyprus Mail, 10 July 2018, https://cyprus-mail.com/2018/07/10/our-view-11th-hour-co-op-vote-typical-of-lily-livered-parties/
2. So called dialogue and consensus always favors unions, Cyprus Mail opinion, 29 September 2018, https://cyprus-mail.com/2018/09/29/our-view-so-called-dialogue-and-consensus-always-favours-the-unions/

Policy Communication

#39

To what extent does the government achieve coherent communication?

10
 9

Ministries are highly successful in aligning their communication with government strategy.
 8
 7
 6


Ministries most of the time are highly successful in aligning their communication with government strategy.
 5
 4
 3


Ministries occasionally issue public statements that contradict the public communication of other ministries or the government strategy.
 2
 1

Strategic communication planning does not exist; individual ministry statements regularly contradict each other. Messages are often not factually consistent with the government’s strategy.
Coherent Communication
3
Government communications are generally channeled through the Press and Information Office (PIO) and government spokesperson. However, in a context of increasingly intense media presence and interaction with the media, ministers and other officials have come to operate more independently in their communications. This has exacerbated, to some extent, long-standing challenges resulting from poor coordination of communication.

Following his reelection in February 2018, the president and his new government faced a variety of serious political issues, including with teacher strikes and the collapse of the Cooperative Bank. There was a cacophony of messages, lacking clarity and sometimes contradictory, which left the public in the dark or in confusion.

Citations:
1. Our view : Statements of the obvious do little for public’s confidence in politicians, Cyprus Mail, 26 September 2018, https://cyprus-mail.com/2018/09/26/our-view-statements-of-the-obvious-do-little-for-publics-confidence-in-politicans/

Implementation

#41

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 Effectiveness
4
In their fall 2018 reports, the European Commission, the European Central Bank and the IMF praised the government for the impressive growth rates and economic recovery brought about from tourism, services, and building activities. They also noted, among others, improvements in employment and in addressing problems related to non-performing loans (NPLs). As a result, Cyprus is back to investment grade BBB-. Progress on NPLs was achieved by increasing the public debt. Success remains mainly sectoral; sustainability depends on government actions on critical issues. Long-term sustained effort is needed in order to shift economic activity to new sectors, to make structural and other reforms of the administration and judicial system, and proceed with privatizations. Similarly, the process related to introducing a national health system needs to be expedited.

Reforms may further benefit the people, alleviate negative impacts on their welfare and reduce inequalities, and the risk of poverty and social exclusion. While the government’s policies improved economic confidence and competitiveness, the market climate remains reserved.

Citations:
1. Statement of the staff of EU Commission and the ECB… Cyprus, 28.09.2018, https://www.ecb.europa.eu/press/pr/date/2018/html/ecb.pr180928.en.html
2. Cyprus: Staff Concluding Statement of the 2018 Article IV Mission, IMF, 5 October 2018, https://www.imf.org/en/News/Articles/2018/10/05/mcs10518-cyprus-staff-concluding-statement-of-the-2018-article-iv-mission

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

10
 9

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


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


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

The organization of government does not provide any mechanisms for ministers to implement the government’s program.
Ministerial Compliance
4
Under the presidential system, appointment and dismissal of a minister are the president’s prerogative. Implementation of state policies rests entirely with a minister’s ambition to succeed or desire to stay in office. While the officeholder’s personality and dedication are key factors, the very broad scope of each ministry’s competences increases planning and coordination difficulties. Strategic planning may benefit implementation and provide evaluation benchmarks. Thus, achievement of goals may be a motivating factor for quality work.

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
4
The constitution establishes that the direction and control of the government and general policy lie with the Council of Ministers. This creates a circular relationship since each minister is the sole authority in her/his ministry. The Directorate General for European Programs, Coordination and Development (DGEPCD) has some monitoring functions, but these are limited to growth policies. The Council of Ministers does not have the capacity or mechanisms to exercise direction and control. Under the law on fiscal responsibility, the finance minister is assigned central oversight and coordinating powers, albeit mainly on budgetary and fiscal issues.

How effectively do federal and subnational ministries monitor the activities of bureaucracies/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 Council of Ministers appoints the governing bodies of quasi-governmental institutions and approves their budgets. The law on fiscal responsibility offers some budget control, while 2014 amendments to the law on the governing bodies of quasi-governmental institutions strengthens government control on governing bodies and policies. However, these changes appear to neither offer remedies against favoritism nor to improve oversight and sound management.

The situation with regard to local authorities is similar. The auditor general notes in his 2016 report high debts, disrespect for rules and procedures, and functional inadequacies in many municipalities.

In 2018, the IMF underlined the need for reforms of public bodies and municipalities, at both the structural and functional levels, and the improvement of their capacity for financial management and the monitoring of risk.

Citations:
1. Municipal gravy trains can’t go on, audit boss says, Cyprus Mail, 25 May 2018, https://cyprus-mail.com/2018/05/04/municipal-gravy-trains-cant-go-on-audit-boss-says/

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
4
Local government bodies receive substantial state subsidies, amounting in some cases up to 40% of their budget. In addition, the Council of Ministers, in particular the ministers of interior and finance, have extensive powers to manage the finances and assets of municipalities. The creation of new municipalities increases local government budget needs. Legislation that aims to reorganize municipalities, improve their management, increase centralization and control state funding has been pending since 2014. However, the main challenges facing local government are inefficiency, mismanagement and corruption, which result in the provision of low-quality services.

Citations:
1. Generous loans available from EIB for municipal projects, Cyprus Mail, 15 November 2017, https://cyprus-mail.com/2017/11/15/generous-loans-available-eib-municipal-projects/

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
4
The constitutional status of local government is vague. Placed originally under the authority of the Communal Chambers (Art. 86-111) that were abolished in 1964, local authorities are governed by the Law on Municipalities of 1985. Local authorities demonstrate limited capacity and efficiency. The aforementioned constitutional clauses have led to restrictions on municipalities’ powers. Budgets and management decisions regarding a variety of financial issues and assets are subject to approval by the Council of Ministers. Additionally, the law on fiscal responsibility (20(I)/2014) imposes stricter budget controls. Reforms by statutory regulation are pending for years, while the number of municipalities is deemed excessive and their operations highly problematic. Local authorities must prove that they deserve their autonomy.

Citations:
1. Discussion of local government reform bill drags on, Cyprus Mail, 25 June 2018, https://cyprus-mail.com/2018/06/25/discussion-of-local-government-reform-bill-drags-on/

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
2
Standards and indicators at the central government level often lack consistency and universality. Reforms aiming to create a complete framework and improve implementation have been pending since 2014. Notwithstanding, the Ministry of Finance issues guidelines to assist subnational entities in designing budgets based on strategic planning. Guidelines set general standards and procedures, in particular on fiscal issues. Though no evaluation report on their application is available from the Ministry of Finance, the auditor general’s report for 2016 points to disrespect for standards and procedures. He stresses that “the situation in municipalities is not viable” and urges the government to make the approval of pending reforms an extremely high priority. Reforms may, among others, set standards that reduce individual discretion regarding the interpretation and implementation of fiscal and other policies.

Citations:
1. Municipal gravy trains can’t go on, audit boss says, Cyprus Mail, 4 May 2018, https://cyprus-mail.com/2018/05/04/municipal-gravy-trains-cant-go-on-audit-boss-says/

To what extent is government enforcing regulations in an effective and unbiased way, also against vested interests?

10
 9

Government agencies enforce regulations effectively and without bias.
 8
 7
 6


Government agencies, for the most part, enforce regulations effectively and without bias.
 5
 4
 3


Government agencies enforce regulations, but ineffectively and with bias.
 2
 1

Government agencies enforce regulations ineffectively, inconsistently and with bias.
Regulatory Enforcement
3
Government policies and practices point to a bias toward serving the interests of powerful economic groups and individuals as well as bowing to the demands of strong trade unions. Also, both the government and political parties often act on the basis of political expediency: they attempt to find ways to avoid “harming” the interests of informal groups by adopting rules that are either ineffective or unrelated or simply by not taking decisions. As a result, the public good is not fairly served and lingering challenges persist.

The most glaring examples are the citizenship granting “investment program” that neutralizes regulation on city planning and the favoring of land development – including new golf courses – within Natura 2000 protected sites while ignoring water scarcity. In the financial sector, the laws on foreclosures and non-performing loans and the accompanied ESTIA scheme were amended after the EU and IMF considered them inadequate for the task. Little or no progress on reforms is also indicative of a policy bias that enables the government and parties to avoid possible political costs.

Citations:
1. Environmental decisions placing Cyprus on path to self-destruction, Etek says, Cyprus Mail, 29 March 2018, https://cyprus-mail.com/2018/03/29/environmental-decisions-placing-cyprus-path-self-destruction-etek-says/

Adaptability

#38

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 developments.
 2
 1

The government has not adapted domestic government structures, no matter how beneficial adaptation might be.
Domestic Adaptability
5
The rigid structures of the 1960 constitution and a chronic lack of innovative spirit have held the country back. Numerous recent studies and projects for reform have thus far led to little progress; the government appears unwilling or hesitant, while some proposals have been rejected by the parliament or neutralized through amendments. While EU accession led to the creation of new institutions and new practices, these did not affect cumbersome structures and entrenched mentalities. As a single region under the EU’s “cohesion policy,” Cyprus has not been significantly affected by European policies aimed at strengthening the role of regions. Government efforts to promote strategic planning capacity or administrative reforms are missing targets (e.g., changing administrative structures and culture and promoting meritocracy). These efforts may be further affected by the dissolution of the centralized Unit for Administrative Reforms.

Citations:
1. Studies for the reform of the public administration, ministries and departments http://www.reform.gov.cy/en/public-administration-reform

To what extent is the government able to collaborate effectively with 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
4
Despite the island’s proclaimed role as a bridge between three continents, its preoccupation with its own challenges has prevented it from sufficiently seizing opportunities offered through its membership in the EU, UN and other intergovernmental organizations. Its contribution to global public welfare is limited and mechanisms or plans to ensure such contribution are largely absent. Instead, the Cypriot government focuses on bilateral relations and isolated contributions to specific matters in international fora. Resources and attention are gradually shifting from efforts to overcome the economic crisis to initiatives aiming to coordinate with neighboring countries on exploiting hydrocarbons in the Eastern Mediterranean. Given existing conflicts in the area, which are partly fueled by hydrocarbon explorations, the main aim has been to forge alliances. Cyprus could exploit the great potential that its strategic location offers to contribute more to the common good in the region and globally.

Citations:
1. Cyprus, Greece hit back at Turkey’s trilateral summit ‘dismay’, Cyprus Mail, 13 October 2018, https://cyprus-mail.com/2018/10/13/cyprus-greece-hit-back-at-turkeys-trilateral-summit-dismay/

Organizational Reform

#33

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
4
The main institutional arrangements of 1960 remain largely unchanged. Reform efforts, including institutional monitoring under the project for better regulation, have shown little progress. Some procedures have improved. The rejection by the parliament of a government bill to establish a sub-ministry for development led to the reassignment of tasks back to three line ministries. Self-monitoring in line ministries is absent, while a central coordination and monitoring body is missing.

To meet EU obligations and proceed with reforms agreed to with its creditors, the government commissioned studies that identified existing needs. However, the extent of monitoring and widening better regulation to all levels of the administration remains limited.

Citations:
1. Lenders call on Cyprus to maintain fiscal discipline and speed up reforms, Cyprus Mail, 28 September 2018, https://cyprus-mail.com/2018/09/28/lenders-call-on-cyprus-to-maintain-fiscal-discipline-and-speed-up-reforms/

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
5
Efforts to improve the efficiency of the administration stalled in 2018 without adoption of any major reform. Published plans aim, among other things, to improve the selection and promotion of personnel, speed up procedures, create control mechanisms, and clear confusion on roles and competences. Clear indications that capacities are improving remain scarce.

Work on expanding strategic planning capacities is missing monitoring and evaluation mechanisms. Additionally, the required professional training of personnel advances slowly, with no action report available.
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