Policy Performance


Economic Policies

As it seeks to make its economy more internationally competitive, Lithuania falls into the upper-middle ranks internationally (rank 13) in the area of economic policies. Its score on this measure has improved by 0.6 points since 2014.

Growth rates have accelerated again after a short slowdown. Producers have adjusted to a drop in exports to Russia by reorienting toward other markets. Rises in energy prices and wages are becoming competitiveness challenges for Lithuanian companies.

Unemployment rates have declined steadily to moderate levels. A new labor code has come into force that aims to balance increased labor-market flexibility with employee protections. Minimum wages have been steadily increased.

Competitiveness-driven revisions to the income tax system will reduce the overall tax burden on labor, assign responsibility for social-security contributions to employees rather than employees, and shift from a flat-rate income tax to a mildly progress system with higher rates. The government has run small budgetary surpluses in recent years, with public debt stabilizing below 40% of GDP.

Social Policies

With gaps in its social safety net, Lithuania receives a middling overall score (rank 23) with regard to social policies. Its score on this measure has declined by 0.1 points since 2014.

Education quality is a concern, with students showing middling achievements, and a mismatch evident between graduates’ skills and labor-market needs. Demographic changes are producing strong declines in the annual number of school graduates. Poverty-risk and social-exclusion rates are high. New social-policy funding programs are targeting at-risk pensioners, children and low-income families.

Health outcomes are poor in cross-EU comparison. Out-of-pocket payments are high, reducing access for some groups. The government has sought to reduce alcohol availability as a health measure. The share of women employed is high, but child-poverty rates remain concerning, and child-care provision is insufficient. A new strategy will provide financial support to families, with the aim of raising the birth rate.

The pension system does not adequately protect against poverty. Reforms are under way in both the state and private-savings pension pillars. Immigration is comparatively rare. The country committed to taking in nearly 1,100 asylum seekers by late 2019, but actual numbers have been far lower, and many have left the country.

Environmental Policies

Despite a high energy intensity, Lithuania falls into the top ranks (rank 5) with regard to environmental policies. Its score on this measure has improved by 0.3 points since 2014.

CO2 emissions are declining, and renewable energy accounts for more than 25% of production, already exceeding its Europe 2020 target. EU structural funds have helped make substantial improvements to water-supply and sewage infrastructures. However, the European Commission has cited the county for failing to comply with EU wastewater treatment standards.

The recycling rate is well below the EU average, and the country’s infrastructure for waste sorting and recycling is underdeveloped. The country scores well on rankings related to agriculture, biodiversity and habitat, and ecosystem vitality.

The parliament approved a national climate-change strategy in 2012. It is not generally a leader on global environmental strategies, but takes a more active role on regional issues such as the Baltic Sea. Concerns over the safety of nuclear power plants being built in neighboring Belarus have become an important issue.



Quality of Democracy

With free and fair electoral procedures, Lithuania receives a high overall ranking (rank 10) with regard to democracy quality. Its score on this measure is unchanged relative to its 2014 level.

Campaign-finance laws restrict corporate donations, and contributions must be made public. Sanctions for violations have been increased, with a major party recently barred from fundraising for six months, but serious loopholes remain. State funding provides the largest share of party revenue. A referendum to amend the constitution to introduce dual citizenship is likely to be held in 2019.

The media is broadly independent, but several episodes have come to light in recent years in which branches of the government have sought to influence, surveil or otherwise interfere with the operations of the free media. While several major transparency initiatives have been passed, implementation has been slow.

Civil rights are officially protected, but poor prison conditions and intolerance for sexual and ethnic minorities are problematic. Weak public support has undermined the efficacy of anti-discrimination efforts. Corruption remains a problem. Judicial efficiency is comparatively good, and courts are independent.



Executive Capacity

Showing significant institutional-reform ability, Lithuania scores well (rank 9) with regard to executive capacity. Its score on this measure is unchanged relative to its 2014 level.

While strategic planning is well institutionalized, the planning system suffers from unnecessary complexity. The government-office has been reorganized to improve policy formulation and quality control. Line ministries have considerable autonomy, but work collaboratively with the prime minister’s office. The regularity of informal meetings has increased following a decision to make all official government meetings public.

RIAs are more formal than substantive. Digital coordination tools are well-developed. Public consultation is currently routine, but not generally aimed at development of consensus. A new public-consultation methodology is being developed. The current government’s makeup of mostly non-partisan ministers has led to internal tensions and troubles coordinating communications.

A lack of reliable and comprehensive data on public-service provision hampers monitoring and standardization. A recently introduced procedure for funding municipalities has increased dependence on central-government grants. Adaptability, particularly in the context of EU fund absorption, has been high, with OECD accession viewed as likely to strengthen regulation quality.

Executive Accountability

With a mixed record on oversight issues, Lithuania falls into the middle ranks internationally (rank 20) in the area of executive accountability. Its score on this measure has improved by 0.3 points since 2014.

Citizen policy knowledge is not highly developed, although public-education campaigns and efforts to improve information availability are ongoing. While the state-funded media produces some high-quality analysis, the media are in general distrusted.

Parliamentarians have considerable resources and strong formal oversight powers. The audit office’s performance has been widely praised, with the entity’s new head seeking greater engagement with citizens. The several ombuds offices have taken an increasingly proactive approach to human-rights violations, and the data-protection authority is both independent and effective.

Key political parties have shifted to increasingly democratic means of selecting candidates and making decisions. Interest groups generally have limited ability to formulate well-crafted policies.
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