Latvia

   

Executive Capacity

#7
Key Findings
With significant strategic capability, Latvia receives a high overall ranking (rank 7) in the area of executive capacity. Its score on this measure has declined by 0.1 point relative to its 2014 level.

A recently established government planning unit has expanded strategic capacities, helping to review line-ministry proposals. Coalition parties have broad influence over the ministries they control, weakening the prime minister’s power. An informal coalition-council structure whose secrecy led to controversy has been replaced by a “collaboration council” with similar coordinating functions.

RIAs are required for all draft proposals, but lack a specific sustainability review. Ex post evaluations are carried out for planning documents, but there is no standard approach for legislation. Public consultation is frequent, but its impact is often limited. While ministerial compliance is overall strong, disagreements between ministers regularly become public.

Domestic adaptability to EU norms has proven substantial. Local governments are sometimes subject to unfunded mandates, but also tend to have poor financial-management capabilities. A public-sector reform process underway, with the aim of increasing administrative quality and efficiency. Efforts to improve regulatory enforcement, particularly in the banking sector, have improved.

Strategic Capacity

#9

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
8
In December 2011, Latvia established a central government planning unit, the Cross-Sectoral Coordination Centre (Pārresoru koordinācijas centrs, PKC). The PKC’s mandate was to develop a long-term strategic approach to public policymaking, while also monitoring decision-making to ensure that public policies are effective. The PKC also monitors ministries’ progress toward meeting the government’s stated goals, as outlined in the government declaration.

To date, the PKC has produced the National Development Plan, monitored progress toward the Latvia 2030 framework and established an active role for itself in decision-making, contributing to policy debates on a range of cross-sectoral issues such as demographics and income disparities. The PKC reviews all proposals discussed by the cabinet and provides weekly briefings for the prime minister on substantive issues pending discussion by the cabinet. In 2015, the PKC’s mandate was expanded to include a coordinating role in the management of state-owned enterprises.

In addition to the PKC’s core role and a reduction in departmental units and staff numbers, most ministries have retained some independent planning capacity. The PKC has been criticized for becoming mired in the details of policy planning, effectively duplicating the work of ministries while failing to provide the cross-sectoral, meta-approach expected of it.

The effectiveness of the PKC is not limited by its ability to provide quality analysis and evidence-based arguments, but rather by its inability to carve out a position of authority and influence within the decision-making process. Analysis provided by the PKC to politicians is easily tossed aside when political expediency dictates. The PKC itself sees its role as providing much-needed analysis, but not necessarily ensuring that these evidence-based arguments are respected in the decision-making process.

Citations:
The Cross-Sectoral Coordination Centre, Information Available at (in Latvian): https://www.pkc.gov.lv/lv/par-pkc/kas-ir-pkc, Last assessed: 06.01.2019

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
6
The decision-making system is transparent and open to public participation from the point at which policy documents are circulated between ministries in preparation for review by the cabinet. At this stage, experts and NGOs have the opportunity to provide input on their own initiative.

Most ministries have developed good practices in the area of public consultation. For example, ministries often seek expert advice by inviting academics to join working groups. Some government planning documents, such as the National Action Plan for Open Government by the State Chancellery, have been drafted in cooperation with NGO experts, following public discussions.

However, the government lacks the finances to regularly commission academic input. Consequently, expert engagement is given voluntarily, without remuneration. The number of NGOs participating in working groups and consultative bodies increased in 2014. However, the number of NGOs that submitted comments on draft laws or actively participated in public consultation processes declined.

The tax reform in 2017 saw a wide array of international and domestic experts propose and debate reforms across a broad spectrum of government committees, public discussions, TV and radio debates, and op-ed columns. A similar process was carried out with reforms to the health care system. This has increased the status of non-governmental academic experts and government transparency.

Citations:
State Chancellery (2014), Report, Available at (in Latvian): http://www.mk.gov.lv/sites/default/files/page/attachments/gada_parskats_2014.pdf, Last assessed: 07.01.2019.

Interministerial Coordination

#11

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
9
The formation of the PKC, which reports directly to the prime minister, has ensured a mechanism enabling input from the government office on the substance of policy proposals from line ministries. The PKC evaluates all proposals to be addressed by the cabinet on a weekly basis, focusing on three issues: cross-sectoral impact, adherence to the government declaration and compatibility with long-term strategy documents (such as the National Development Plan and Latvia 2030).

Citations:
1. National Development Plan 2020, Available at (in Latvian): https://www.pkc.gov.lv/lv/valsts-attistibas-planosana/nacionalais-attistibas-plans, Last assessed: 06.01.2019

2. Sustainable Development Strategy of Latvia until 2030, Available at: http://www.pkc.gov.lv/sites/default/files/images-legacy/LV2030/LIAS_2030_en.pdf, Last assessed: 06.01.2019

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
8
Since its establishment in 2011, the PKC has become increasingly involved in line ministry preparation of policy proposals. PKC representatives are invited to participate in working groups. Involvement of the PKC is at the ministry’s discretion. Informal lines of communication ensure that the PKC is regularly briefed on upcoming policy proposals.

Latvia has a “fragmented” cabinet government system. Consequently, ministers enjoy relatively substantial autonomy, weakening the power of the prime minister. As a result, ministers belonging to a different party than the prime minister will attempt to block the prime minister’s office from interfering in sensitive policy issues whenever possible.

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
8
Cabinet committees are an integral part of the official decision-making process. If ministerial agreement on draft policy proposals cannot be reached at the state-secretary level, issues are automatically taken up by a cabinet committee for resolution. The cabinet committee’s mandate is to iron out differences prior to elevating the proposal to the cabinet level. In 2017, cabinet committees considered 142 issues, of which 141 were sent on to cabinet.

The cabinet committee may be complemented by informal mechanisms such as the coalition council if agreement cannot otherwise be reached.

Citations:
State Chancellery (2017), Report, Available at (in Latvian): https://www.mk.gov.lv/sites/default/files/page/attachments/valsts_kancelejas_gada_parskats_2017_final_6.pdf, Last assessed: 06.01.2019

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
8
The official decision-making process mandates the coordination of policy proposals at the state-secretary level. New policy initiatives are officially announced at weekly state-secretary meetings, after the draft proposals are circulated in a transparent process providing all ministries with an opportunity to review and comment on the issues. The process is open to the public and input from non-governmental entities is welcomed. Ministry responses to draft proposals are collected and ministerial coordination meetings on particular drafts are held to achieve consensus on the substance of the proposals. In cases where consensus cannot be reached, the proposals move to cabinet committee for further consideration at the political level.

Issues can be fast-tracked at the request of a minister. Fast-tracking means that the usual procedures for gathering cross-sectoral and expert input can be circumvented, putting the efficacy of coordination at risk. In 2016, 27% of all issues before the cabinet were fast-tracked, a significant drop from 2015.

At a lower bureaucratic level, coordination occurs on an ad hoc basis. Ministries conduct informal consultations, include other ministry representatives in working groups and establish interministerial working groups to prepare policy proposals. These methods are widely used, but not mandatory.

Citations:
State Chancellery (2015, 2016), Reports (in Latvian), Available at: https://www.mk.gov.lv/lv/content/gada-publiskie-parskati, Last assessed: 06.01.2019

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
A coalition council that represents the political parties forming the governing coalition meets for weekly informal consultations. Despite its regular meetings with formal agendas, the council is not a part of the official decision-making process. Given that cabinet meetings are open to the press and public, coalition-council meetings provide an opportunity for off-the-record discussions and coordination. The council plays a de facto gatekeeping function for controversial issues, deciding when there is enough consensus to move issues to the cabinet. The coalition council can play both a complementary role, creating an enabling environment for consensus-building, and a destructive role, undermining the legitimacy of the official decision-making process.

Nevertheless, the secrecy surrounding the coalition council has made it a controversial institution. “Who Owns the State?” – a populist party that won the third largest share of the vote in the 2018 parliamentary election – promised to eliminate the coalition council. Indeed, the government coalition formed in January 2018 no longer has a coalition council to coordinate its political work. Instead, a new collaboration council, with similar functions, has been created.

Citations:
I made some additions to the text.

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.
6
In 2013, the Cabinet of Ministers approved the Information Society Development Guidelines 2014 – 2020, which is the current National eGovernment Strategy. The guidelines were elaborated to ensure continuity of existing policies, and to determine priorities in the area of Information and Communication Technology (ICT) for the European Union Structural Funds Programming period 2014 – 2020. One of the key goals identified in the document was the creation of centralized platforms for all governmental actors, ensuring more efficient public administration and emphasizing inter-institutional and cross-sectoral government cooperation.

In 2015, the government supported the proposal of the Ministry of Environmental Protection and Regional Development (VARAM) to fully implement the Public Administration Document Management Systems Integration Environment (DIV) in public administration from 1 September 2017. However, even though many of the ministries have introduced the system, the system’s use remains uneven. For example, State Chancellery, the Cabinet of Ministers and several ministries still use the previous DAUKS system (State Chancellery’s document circulation and task control) to exchange documents, although the platform’s use is limited and deemed ineffective by VARAM. In addition, some documentation is still circulated in paper form.

Nevertheless, VARAM has emphasized that more work will be put into mainstreaming shared platforms for document exchange. VARAM’s latest research shows that ministries are moving toward completely digitized document handling processes and the use of electronic signatures is becoming more common, even if progress is not as rapid as hoped.

The State Audit Office has evaluated collaboration between state institutions as being generally well organized, but fragmented. Although approximately € 69 million of the annual state budget is invested in the development and maintenance of ICT, the impact of this investment was deemed to be limited in the State Audit Office’s 2017 report.

Citations:
1. Ministry of Environmental Protection and Regional Development (2013), Guidelines for Development of Information Society 2014-2020, Available at: http://www.varam.gov.lv/eng/darbibas_veidi/e_gov/?doc=13317, Last assessed: 06.01.2019

2. Ministry of Environmental Protection and Regional Development (2017), Report on the circulation of electronic documents in ministries and their subordinate institutions (in Latvian), Available at: http://www.varam.gov.lv/in_site/tools/download.php?file=files/text/Dokumenti/pol_doc/elietas//MK_171017_InfoZinojums.pdf, Last assessed: 06.01.2019.

3. State Audit Office (2017), Report: Is public administration handling the accumulated information effectively?, Available at: http://www.lrvk.gov.lv/uploads/reviziju-zinojumi/2016/2.4.1-12_2016/zinojums.pdf, Last assessed: 06.01.2019

Evidence-based Instruments

#20

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
8
The government decision-making process requires every draft act of legislation to undergo an assessment, which takes the form of an annotated report. This annotation accompanies the draft through the review process to the cabinet. The annotation addresses budgetary impact, impact on particular target groups and the cost of implementation. In practice, the quality of annotations varies widely depending on the approach taken by the drafters, which range from a detailed, evidence-based analysis to a simple pro forma summary of intent. Minimum standards for annotations are not enforced.

In 2013, the government office made revisions to the annotation requirement. The new annotation form requires a justification for introducing new regulations, an assessment of compliance costs for citizens and businesses, and an assessment of public health effects. The revised regulations also seek, through the introduction of so-called green papers, to improve stakeholder involvement in the early stages of drafting. The green papers ensure that relevant information and discussion documents are publicly available at an early stage of the policy-development process. The State Chancellery monitors the quality of annotations and the use of the green papers. The Chancellery has delayed several policies due to inadequacies in the annotations or the green-paper process.

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
7
The annotation requires a description of stakeholder participation. Minimum requirements can be met by a simple statement detailing when stakeholders were consulted. Annotations may include information on stakeholder inputs, reactions or needs.

Annotations are publicly available along with the draft act of legislation. They serve as an explanatory accompaniment to the draft and are often referenced in communications about the draft.

Annotations are not assessed by an independent body. However, they are monitored by the government office as part of its oversight of the decision-making process. Inadequacies in the annotation can lead to proposals being returned for revision prior to consideration by the cabinet. An annual monitoring process by the government office can lead to improvements in the system. The latest such revision took place in 2013.

Citations:
Cabinet of Ministers (2013), Simplification of Draft Legislation Annotations, Press release, Available at (in Latvian): https://lvportals.lv/dienaskartiba/255276-vienkarsos-tiesibu-aktu-projektu-anotacijas-un-uzlabos-to-satura-kvalitati-2013, Last assessed: 06.01.2019

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
2
Annotations have no specific sustainability checks. For example, the issue of sustainability is not integrated into the annotations, impact indicators are not consistently used and there is no requirement to perform short-, medium- or long-term analyses. Some annotations do provide such information, but this is discretionary. New regulations on annotations, introduced in 2014, include a regulatory impact assessment that requires a calculation of the administrative burden, such as the cost to business.

Latvia has not adopted a specific sustainability strategy. However, sustainability is integrated into the Latvia 2030 strategy. As draft policies are assessed for compatibility with this strategy, sustainability issues may be taken into consideration. The Cross-Sectoral Coordination Centre (PKC) provides input to the drafting of policies, highlighting sustainability issues. The PKC also conducts an annual assessment of Latvia’s strategic goals, which includes sustainability assessments.

Citations:
Sustainable Development Strategy of Latvia until 2030, Available at: http://www.pkc.gov.lv/sites/default/files/images-legacy/LV2030/LIAS_2030_en.pdf Last assessed: 07.01.2019

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
6
Currently ex-post evaluation is carried out for development planning documents, as prescribed in the Development Planning System Law. In addition, the “methodology for developing and evaluating the results and performance indicators for ministries and other central state institutions” provides general guidelines for ministerial reporting. However, there is currently no common approach to the evaluation of legislation post-implementation, although institutions are allowed to order research studies (including ex-post impact studies) at their own discretion.

Recognizing the need for a unified approach and clear regulation, the Cabinet of Ministers approved the State Chancellery’s concept report on ex-post evaluations in 2016. The report considered several potential approaches, before recommending that two pilots should be carried out in 2017, which would then be used to finalize a new policy in 2018. This policy is currently pending.

Citations:
1. State Chancellery (2016), Annual Report (in Latvian), Available at: https://www.mk.gov.lv/sites/default/files/page/attachments/valsts_kancelejas_2016.gada_parskats.pdf, Last assessed: 06.01.2019

2. State Chancellery (2017), Annual Report (in Latvian), Available at: https://www.mk.gov.lv/sites/default/files/page/attachments/valsts_kancelejas_gada_parskats_2017_final_6.pdf, Last assessed: 06.01.2019

3. Development Planning System Law (in Latvian), Available at: https://likumi.lv/doc.php?id=175748, Last assessed: 06.01.2019

4. Methodology for developing and evaluating the results and performance indicators for ministries and other central state institutions (regulation), Available at: https://likumi.lv/doc.php?id=200935, Last assessed: 06.01.2019

5. Cabinet of Ministers (2016), Report on Ex-post Evaluation Implementation (in Latvian), Available at: http://tap.mk.gov.lv/lv/mk/tap/?pid=40386136, Last assessed: 06.01.2019

Societal Consultation

#4

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
8
Societal consultation takes place frequently and is diverse in nature. The National Tripartite Cooperation Council (Nacionālā trīspusējās sadarbības padome, NTSP) is a well-established, well-integrated and often-used consultative mechanism that links employers, trade unions and government.

The Council of Ministers maintains an NGO cooperation council, which organizes NGO input into issues related to civil society. The number of NGO participants over the 10 years of this council’s existence has risen from an initial 57 to almost 400 in 2015. Ministries have their own sectoral consultative bodies. The executive branch has 165 different consultative bodies, a slight decrease from a high of 173 in 2011, but the number of NGOs participating in these bodies has increased from 980 to 1,128 over the same period.

Despite this quantitative evidence of consultation, the quality of consultations is often questionable. Consultations are perceived as formal, and in fact offer little opportunity to make an impact on the direction and quality of government policies. NGOs have voiced complaints about the quality of participation, prompting the Council of Ministers/NGO cooperation council to conduct a cross-ministry review of consultation practices during 2011 and 2012. In 2017, an influential group of NGOs called for more transparency and participatory mechanisms in the budget planning process.

This was partially realized in the 2017 tax reform and reflects a long-term trend toward greater engagement with societal actors. Trade unions as well as business and employers’ associations had the opportunity to participate in the debates and discussions on the tax reform and influenced the final legislation.

However, in its public consultations, the government is rarely successful in achieving an exchange of views that substantially increases the quality of government policies or induces societal actors to support them. Best practices can be found in the Ministry of Agriculture and the Ministry of Environment and Regional Development. Both ministries publicly fund a consultation mechanism with NGOs and have achieved considerable success in securing stakeholder input and support for draft policies. There is also evidence of the opposite result: in some cases, government consultations with stakeholders have induced societal actors to actively oppose government policies. In the education sector, active consultations with stakeholders led to attempts throughout 2012 to block government policy proposals as well as multiple calls for the resignation of the minister. Despite extensive consultations throughout 2014 and 2015, teacher unions organized a one-day strike in late 2015 over education-funding reforms. Similarly, despite long-standing discussions on health sector reforms, family doctors went on strike in 2017.

Citations:
State Chancellery (2011, 2012, 2013, 2014, 2015,2016, 2017), Reports, Available at (in Latvian): https://www.mk.gov.lv/lv/content/gada-publiskie-parskati, Last assessed: 02.01.2019

Policy Communication

#3

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
8
The government office organizes monthly coordination meetings of ministerial communication units, which are jointly known as Government Communication Coordination Council. During 2017, nine formal meetings were held.

Communication and statements are generated by the ministries and are generally consistent. A communications coordination council sets annual priorities for the main messages to be propagated to the public. Communication messages are coordinated prior to weekly cabinet meetings. However, this system means that partisan ministerial disagreements are highly visible.

Citations:
Regulation of the Government Communication Coordination Council, Available at: https://mk.gov.lv/sites/default/files/editor/vkkp_nolikums.pdf, Last assessed: 03.01.2019

Implementation

#10

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
9
The government has a good track record in achieving its own policy objectives. In issue areas considered by the government as high priority – recent examples include economic recovery, euro zone entry criteria, budget reform and fiscal discipline, OECD entry requirements – government performance can be considered excellent. The government has proven to be particularly efficient in implementing policies that have been recommended by international partners (the European Union, NATO, Council of Europe and OECD).

However, second-tier policy objectives show mixed success rates. For example, despite the fact that successive government declarations have identified education reform as a policy priority, little demonstrable progress has been made toward fulfilling the outlined policy objectives. Furthermore, in the prime minister’s annual reports to the parliament in 2012, 2013 and 2014, no significant education policy achievements are recognized. In 2016, however, a reform of the teacher compensation system was passed and significant curriculum reform is currently being implemented. Opposition to the implementation of education-policy objectives has been strong not only on the part of stakeholder groups and opposition parties, but also among the government coalition parties’ own parliamentarians.

The PKC monitors progress with respect to government-declaration goals on an annual basis, providing a report to the prime minister. In 2015 this report included an evaluation of Latvia’s progress toward its long-term development goals (included in the National Development Plan 2020 and the Latvia 2030 long-term development strategy). The prime minister provided parliament with a progress report on 24 separate performance indicators, reporting good progress in nine cases, adequate/weak performance in 10 cases, and poor performance in eight cases, requiring a reprioritizing or revision of policy measures.

The NAP2020 mid-term evaluation noted that despite some successes in achieving several goals set out in the plan (e.g., ICT and e-governance), other goals have not been achieved and will likely not be achieved before the end of 2020. For example, in the science, research and innovation policy field, the level of investment has continued to decline, in stark contrast to the projected investment in 2014. This creates the conditions that lead to weak performance, and the outflow of knowledge and highly skilled professionals to other countries (i.e., “brain drain”). Similarly, developments in general education have been insufficient as has the reduction of general emigration levels .

Citations:
1.

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
9
Organizational devices that encourage ministerial compliance include: a public statement of policy intent, a government declaration signed by each minister, a coalition agreement outlining the terms of cooperation between the governing parties and an informal weekly coalition-council meeting. Additionally, the government office monitors compliance with cabinet decisions, while the PKC monitors implementation of the government declaration. Both reporting streams enable the prime minister to fully monitor individual ministers’ progress in achieving the government’s program. Nevertheless, disagreements between ministers regularly become public and can be divisive. Most recently, ministers have disagreed over the EU migrant relocation scheme and tax system reform.

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
8
The government office monitors ministry performance in implementing legislation, cabinet decisions and prime-ministerial decisions. A high degree of compliance has been reported.

The PKC monitors how ministries are achieving the policy goals stated in the government declaration and reports to the prime minister. Progress reports are not only a monitoring tool, but also provide substantive input into the prime minister’s annual report to parliament.

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
7
The executive branch is organized hierarchically, with ministries each having a group of subordinate institutions. Some institutions are directly managed by the ministry, while others are managed at arm’s length when there is a need for the autonomous fulfillment of functions.

All institutions are required to prepare annual reports. Beyond the reporting requirement there is no centralized standard for monitoring subordinate agencies. Ad hoc arrangements prevail, with some ministries setting performance goals and requiring reporting relative to these goals.

The government office has recently taken steps that compensate for poor monitoring and communication with subordinate agencies. In 2013, the prime minister set specific policy goals for ministries and agencies and has required semiannual reporting on progress toward these goals. The government office has also begun including agency heads in interministerial coordination meetings, as a response to the observation that information flows between ministries and their subordinate agencies are neither reliable nor adequate.

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
6
Local governments enjoy a comparatively high degree of autonomy. The local government share of public expenditure was 24.3% in 2015, slightly above the EU average of 24.1%.

Local governments have autonomous tasks, delegated tasks and legally mandated tasks. Each type of task is meant to be accompanied by a funding source. In practice, however, funding is not made available for all tasks. The President’s Strategic Advisory Council has described local governments as having a low degree of income autonomy and a relatively high degree of expenditure autonomy. In its 2011 report on Latvia’s adherence to the European Charter of Local Self-Government, the Council of Europe concluded that local authorities have inadequate access to independent resources and urged Latvia to increase local authorities’ financial autonomy.

The adoption in 2012 of a medium-term budget-planning process envisions the inclusion of three-year budget cycles for local government. While this will provide medium-term budget clarity for local governments, there is also a concern that it will prevent local governments from gaining access to budget increases in proportion to the rate of economic recovery. Data from 2015 showed an imbalance between central and local government budget pressures. In 2015, local government expenditure decreased by 1.1%, while central government expenditure increased by 3.8%. However, local government income increased by 1.7%, while central government income increased by 3.4%.

Local governments suffer from a lack of capacity in financial management. The State Audit Office has repeatedly noted that local governments ignore accounting standards and requirements. In the absence of proper local and national approval procedures for government transactions, violations range from petty issues, such as covering entertainment costs out of the municipal budget, to large scale fraud, such as a municipal official signing a €200 million bond.


Public sector reform is ongoing. The goal of the reform is to increase the quality and efficiency of central administration. However, local authorities are not covered. Furthermore, there is a lack of oversight of and incentives for local authorities, which would improve efficiency.

Citations:
1. The President’s Strategic Advisory Council (2013), Management Improvement Proposals, Available at (in Latvian): http://www.president.lv/images/modules/items/PDF/Pasvaldibas_EGPP_FINAL.pdf, Last assessed: 21.05.2013

2. Congress of Local and Regional Authorities (2011), Local and Regional Democracy in Latvia, Available at: https://wcd.coe.int/ViewDoc.jsp?id=1857271&Site=COE, Last assessed: 06.01.2019

3.Freedom House (2016). Nations in Transit: Latvia 2016. Available at: https://freedomhouse.org/report/nations-transit/2016/latvia. Last assessed: 06.01.2019

4. European Comission (2017), Country Report: Latvia, Available at: https://ec.europa.eu/info/sites/info/files/2017-european-semester-country-report-latvia-en.pdf, Last assessed: 09.01.2019.

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
5
Local governments have a constitutional right to autonomy. This right is reinforced by Latvia’s commitments as a signatory of the European Charter of Local Self-Government, which have been upheld by the Constitutional Court. The Ministry of Environment and Regional Development monitors local-government regulations for legal compliance and has the right to strike down regulations deemed to be in violation of legal norms.

The President’s Strategic Advisory Council has noted a tendency for central government to over-regulate, which has negatively affected local governments’ discretionary authority.

Public discussion about the appropriate division of responsibilities and the burden of financing erupted in 2012, when central government simultaneously reduced the guaranteed minimum income benefit and transferred responsibility for financing the program to local governments. Similarly, in 2015 and 2016 public discussion focused on the burden of financing expected refugee flows.

Citations:
1. The President’s Strategic Advisory Council (2013), Management Improvement Proposals, Available at (in Latvian): http://www.president.lv/images/modules/items/PDF/Pasvaldibas_EGPP_FINAL.pdf, Last assessed: 21.05.2013

2. Law on Local Governments, Available at: https://likumi.lv/doc.php?id=57255, Last assessed: 02.01.2019

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
6
Autonomous local government functions are subject to laws and regulations emanating from the central government. These regulations delineate common standards and define the scope of local government autonomy. The President’s Strategic Advisory Council has warned that over-regulation is seriously encroaching on local government autonomy. The council has called for a limit to bureaucratization and a reduction in the volume of regulations governing functions that are mandated as autonomous.

The executive has said it would create a new one-stop client-service system across the country, which would centralize the contact point for accessing public (central and local government) services. The new system will also introduce national standards for local government services by 2016. The policy was approved by the cabinet in 2013 and pilot projects have been implemented by a number of local governments. An evaluation conference, in September 2014, documented many instances of successful pilot projects as well as favorable client-satisfaction responses to surveys. In 2015, 59 one-stop agencies were launched. After only one year of operation, they have proven to be useful, processing more than 25,000 different types of applications to state and municipal agencies. A further 20 one-stop agencies were to open in 2016. However, the comparability of data sets between institutions remains a challenge.

Citations:
1. The President’s Strategic Advisory Council (2013), Management Improvement Proposals, Available at (in Latvian): http://www.president.lv/images/modules/items/PDF/Pasvaldibas_EGPP_FINAL.pdf, Last assessed: 21.05.2013

2. Regulation Regarding Concept of the Public Service System Development (2013), Available at (in Latvian): http://www.likumi.lv/doc.php?id=254910, Last assessed: 08.01.2019

3. Freedom House (2012), Nations in Transit, Country Report, Available at: http://www.freedomhouse.org/sites/default/files/NIT2012Latvia_final.pdf, Last assessed: 08.01.2019

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
7
When it comes to effective regulatory enforcement in the private sector, there have been concerns regarding bribery, including a few high-profile corruption scandals (e.g., the so-called Oligarchs Case, which involved charges of bribery, money laundering and other crimes in 2011). In addition, there have been tensions around the banking sector and suspicions of “state capture.” These three factors have raised concerns about the state’s ability to take a strong stance. The OECD has noted that many of these issues are linked with the fact that Latvia’s financial sector provides bridging services between the East and West .

Following these scandals, Latvia has made substantial steps to improve the situation and has followed OECD recommendations closely. Latvia has fully or partially implemented 39 out of 44 OECD recommendations. For example, efforts have been made to prevent corruption, raise awareness about corruption, and increase the independence and capacity of the Corruption Prevention and Combating Bureau (Korupcijas novēršanas un apkarošanas birojs, KNAB).

Although the effects of these improvements are yet to be fully observed, Latvia has consistently attempted to tackle corruption since gaining independence (e.g., the creation of KNAB, and the development of several national anti-corruption strategies and programs). In terms of implementation and governance, Latvia has received positive reviews in global ranking reports.

Citations:
1. OECD (2015), Phase 2 Report on Implementing the OECD Anti-bribery Convention in Latvia, Available at:http://www.oecd.org/corruption/anti-bribery/Latvia-Phase-2-Report-ENG.pdf, Last assessed: 05.01.2019

2. OECD (2017), Latvia: Follow-up to the Phase 2 Report & Recommendations, Available at: https://www.oecd.org/corruption/anti-bribery/Latvia-Phase-2-Written-Follow-up-Report-ENG.pdf, Last assessed: 05.01.2019.

Adaptability

#10

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
9
Latvia has adapted domestic government structures to fulfill the requirements of EU membership, revising policy-planning and decision-making processes. During the 2013 – 2015 period, Latvia adapted its domestic structures to comply with the demands of the 2015 EU presidency. Beginning in 2014, Latvia began adapting to the requirements associated with OECD membership. In 2016, Latvia joined the OECD.

In order to ensure efficient decision-making and meet the obligations of IMF and EU loan agreements, Latvia created a reform-management group for coordination on major policy reforms. In 2012, this included changes to the biofuels support system, reforms in the civil service’s human-resources management, tax-policy changes and reforms in the management of state enterprises. The group proved to be a useful forum for the consolidation of support across sectors for major policy changes and structural reforms. The inclusion of non-governmental actors in the group serves to facilitate support for upcoming policy changes. Although the reform management group was considered successful, at the time of writing it had not met since 2013.

Citations:
Cabinet of Ministers, Minutes of the Reform-management group (in Latvian), Available at: http://tap.mk.gov.lv/mp/vaditas-padomes/Reformu-vadibas-grupa/sedes/, Last assessed: 02.01.2019

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
6
Latvia largely contributes to international actions through engaging in the development of EU policy positions.

Institutional arrangements for the formulation of Latvia’s positions on issues before the European Union are formalized. The system is managed by the Ministry of Foreign Affairs, with particular sectoral ministries developing the substance of Latvia’s various positions. The process requires that NGOs be consulted during the early policy-development phase. In practice, ministries implement this requirement to varying degrees. NGOs themselves often lack the capacity (human resources, financial resources, time) to engage substantively with the ministries on an accelerated calendar.

Draft positions are coordinated across ministries and approved in some cases by the sectoral minister, and in other cases by the Council of Ministers. Issues deemed to have a significant impact on Latvia’s national interests are presented to the parliament’s European Affairs Committee, whose decision is binding. The committee considers approximately 500 national positions per year.

During the first six months of 2015, Latvia held the presidency of the Council of the European Union. Latvia’s first experience with the presidency was considered a success, with the country providing appropriate leadership both on expected challenges, such as returning Europe to economic growth, and unexpected challenges, such as the rapidly escalating refugee crisis and terrorist activity in Europe.

Organizational Reform

#5

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
8
The government office has an annual monitoring procedure under which cabinet decision-making processes are reviewed. This results in frequent improvements to the process. In 2013, major revisions to the regulatory impact assessment system were made, along with the introduction of a green-paper system that will move public consultations on new policy initiatives to an earlier phase of the policy-planning process.

The management of relations with parliament, governing parties and ministries is not regularly reviewed. This is considered by civil servants to be the purview of politicians and therefore not an appropriate topic for initiatives emanating from the civil-service level.

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
The regular review of decision-making procedures results in frequent reforms aimed at improving the system. Changes in institutional arrangements, such as the establishment of the PKC in 2010, have significantly improved the government’s strategic capacity and ability to undertake long-term strategic planning.
Back to Top