Policy Performance


Economic Policies

Despite significant gains as it emerges from austerity, Portugal scores comparatively poorly overall (rank 30) with respect to economic policies. Its score on this measure has improved by 1.7 points relative to its 2014 level.

The Costa government has continued its strategy of gradually reversing past austerity measures without undermining budgetary policy or fiscal consolidation. Growth levels have been low to moderate but consistently positive for years.

Unemployment rates have fallen steadily, reaching 6.6% in late 2018, down more than two points in a year. These gains have been driven both by economic growth and emigration. Youth unemployment rates remain worryingly high. The minimum monthly wage has been steadily increased.

Income and consumption taxes remain high as a means of furthering budget consolidation. Deficits have been brought to moderate levels, prompting credit-rating agencies to restore the country’s investment-grade rating. Debt levels remain very high, but have begun to decline as a share of GDP. The country’s tech-startup scene is gaining international attention.

Social Policies

With the Costa government focusing on revitalizing social systems, Portugal falls into the lower-middle ranks (rank 25) in the area of social policies. Its score on this measure represents a gain of 0.5 points relative to its 2014 level.

Education levels are low and unequal by international comparison. However, decades-long polices have helped substantially increase the share of young people completing secondary school. PISA results have also improved. Austerity measures imposed on the welfare system have been reversed, but spending has not returned to pre-bailout levels.

The health care system performs well, but continued funding constraints have led to strikes and resignations. Child-support credits have been expanded. The birth rate has risen, but not to pre-crisis levels. Women’s workforce participation is often forced by generally low wages and household income needs rather than free choice.

Pension values have been increased. The retirement age is now indexed to life expectancy, but the government allows people who began working between the ages of 12 and 14 to retire by age 60. Integration policy is strong, with a welcoming framework for migrants. The country has consistently accepted refugees as part of the EU resettlement program.

Environmental Policies

With good outcomes despite some policy tensions, Portugal falls into the upper-middle ranks (rank 16) with regard to environmental policies. Its score on this measure has improved by 0.3 points relative to its 2014 level.

The crisis-era decline in environmental pressure, largely attributable to decreased production, has reversed. However, the country still rates highly on international climate-change policy performance indexes. A political battle over subsidies to and rents earned by renewable-energy producers has muddied the government’s otherwise pro-renewable policies.

The country ratified the Paris climate-change accord in late 2016, and is particularly active in promoting global protection of marine environments.



Quality of Democracy

With its overall legalistic society, Portugal falls into the upper-middle ranks (rank 14) with regard to its quality of democracy. Its score in this area is unchanged relative to its 2014 level.

Electoral policies are generally fair. New laws have increased the workload of the campaign-finance monitoring body, making it increasingly difficult for it to fulfill its duties. Racist and fascist parties are banned. Referenda are rare, but participatory budgeting processes are used at both the local and national levels.

Financial pressures have increased volatility in media ownership. A broad range of government information is available to citizens, but is often unorganized and difficult to understand. Civil and political rights are generally well protected, though the judicial system continues to be very slow.

Gender and racial discrimination remains moderate concerns, with the gap between average pay for women and men having increased steadily in recent years. Corruption is a persistent problem, with recent efforts to address the issue deemed ineffective and superficial. Courts are independent and strong.



Executive Capacity

With policy flexibility constrained by financial concerns, Portugal falls into the lower-middle ranks (rank 25) with regard to executive capacity. Its score on this measure has improved by 0.1 point relative to its 2014 level.

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

RIA instruments remain underdeveloped, but a new economic-impact evaluation methodology is improving such practices. The government consults particularly with economic actors. Communication and coordination efforts have been mostly effective despite the need to rely on outside parties. Regulation is generally enforced without bias, though the efficiency of enforcement is low.

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

Executive Accountability

With notable gaps in this area, Portugal scores relatively poorly in international comparison (rank 35) with regard to executive accountability. Its score on this measure has improved by 1.0 point relative to 2014.

Parliamentarians have few official support resources, through formal oversight powers are generally strong. The audit and ombuds offices are independent judiciary-branch bodies. The active data-protection authority has been hampered by budgetary restraints.

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

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