GOVERNMENT REFORM IN ITALY:
STATE OF THE ART
Franco BASSANINI
Cabinet Minister for Public Administration
Italy Today: Public Administration Issues
AD HOC COUNCIL - Rome November 13, 2000
www.funzionepubblica.it
The need for Reform
in the early nineties

An obsolete administration: no government-wide
reforms since 1865

An inefficient administration: islands of
excellence in a sea of general inefficiency

A costly administration: crucial need to balance
the budget and reduce public debt
2
F. Bassanini - Government Reform in Italy
The need for Reform
public debt up to 1994 (% of GDP)
135
124,9
119,1
125
115
105
95
82,3
85
75
65
55
70
57,7 59,9
86,3
95,6
90,5 92,6
98
108,7
101,5
75,2
64,9
80 981 982 983 984 985 986 987 988 989 990 991 992 993 994
9
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Source: Italy - Ministry of the Treasury
3
F. Bassanini - Government Reform in Italy
Calls for Reform
The need for change drives large calls for
Reform and consequently a large consensus
among:

Public

Business

Labor

Parliament (a bipartisan reform)
4
F. Bassanini - Government Reform in Italy
The Tools of Reform

A broad “delegating law” (legge delega) n. 59 of 1997:
Parliament delegates Government the power to adopt “legislative
decrees” (primary level regulation) in defined areas, pursuant to
the principles set by the law

The “delegislation” (delegificazione) mechanism:
Parliament authorizes Government to substitute primary laws with
Governmental decrees (secondary level regulation) in two main
sectors: administrative procedures and organization of public
offices
5
F. Bassanini - Government Reform in Italy
The Main Areas of Reform

Devolution, outsourcing
and “administrative
federalism”

Simplifying regulatory and
administrative burdens

Reorganization of Central
Government

The new Public Budgeting

Civil Service Reform

A more transparent and
comprehensible Government

A performance-oriented
public sector management

e-Government
6
F. Bassanini - Government Reform in Italy
Devolution
a leaner but more efficient State
Horizontal subsidiarity - focusing
Government on its core business:
 closing unnecessary Government activities
 outsourcing and/or privatizing activities that can
be more efficiently undertaken by the private sector
(business and non-profit organizations)
 liberalization of public utilities
7
F. Bassanini - Government Reform in Italy
Devolution
liberalization and privatization





Liberalization. Three examples:
110 fixed telecommunication licenses and 86 operators
instead of Telecom Italia monopoly
unbundling of local loop from end 2000
ENEL control of electricity market: from 90% in 1990 to less
than 40% in 2003
Privatization of public utilities: ENI, BNL, INA,
ENEL, Telecom, Alitalia, Autostrade …
world largest privatization program (total revenue up to end
1999: approx. 87 billions US Dollars)
8
F. Bassanini - Government Reform in Italy
Devolution
revenues from privatization in OECD countries
(1993 - 1998)
Millions US Dollars
70.000
60.000
50.000
40.000
France (F)
48.530
Germany (G)
15.392
Italy (I)
63.473
Spain (S)
34.441
Un. King. (UK) 28.709
30.000
Japan (J)
46.721
USA (US)
3.100
Canada (C)
7.024
20.000
10.000
Australia (AUS) 45.000
0
F
Source: OECD
D
I
E
UK
J
US
9
C
AUS
F. Bassanini - Government Reform in Italy
Devolution
total stock mkt cap/GDP
The privatization program has contributed
fostering the growth of the Italian equity market
77
80
66,4
70
60
45,7
50
40
30,8
30
17,9
20
11,5
18,4
20,6
15,1
10
2000
(feb.)
1999
1998
1997
1996
1995
1994
1993
0
1992
10
F. Bassanini - Government Reform in Italy
Devolution
strengthening local Governments

Strengthening stability of local Governments
direct election of Majors (since 1993), Presidents of Provinces (1993),
Presidents of Regions (2000)

Strengthening financial autonomy of local
Governments: the “fiscal federalism”
transformation of State financial transfers to Local Authorities into local
taxation or participation in main State taxes (VAT, Income tax…)

Strengthening sovereignty of Local Governments
transferring general legislative powers to Regions (constitutional bill
presented by the Government)

Strengthening efficiency of Local Administrations
reform of control mechanisms, “city managers”, local public managers
chosen also from private sector, salaries linked to performance
11
F. Bassanini - Government Reform in Italy
Devolution
the “administrative federalism”
 1997: law n. 59 identifies a mandatory list of State tasks
and plans the devolution of all other tasks to Regions,
Provinces and Municipalities
 1997-1998: five “legislative decrees” identify in detail
the tasks to be transferred from central to local Government
 1999-2000: Prime Minister decrees transfer groups of
tasks together with related human and financial resources
 January 1st,
2001: end of devolution process
12
F. Bassanini - Government Reform in Italy
Devolution
opinions of the public
Has the “Bassanini reform” improved the efficiency of local Governments?
Doesn't
know
7,3
Yes 36,1
No 24,9
Yes, in
part
31,7
13
F. Bassanini - Government Reform in Italy
Reorganization of Central Government
the general strategy

The first government-wide Reform since 1865: a system up to now
grown only by “adding layers”

Merging bodies with similar missions; eliminating duplication and
segmentation

Functions assigned by law; internal organization established by a more
flexible secondary regulation. End of the traditional “pyramid model” for
Ministries

Reducing the Ministries from 22 (in 1995) to 18 (present) to 12 (in April
2001)

Introducing “Agencies”: non-ministerial bodies with technical and
executive tasks

“Central Government Local Offices”: merging several State local offices
into a single “interministerial” body
14
F. Bassanini - Government Reform in Italy
Reorganization of Central Government
reform of the Prime Minister’s Office

Making the role of stimulating, guiding and coordinating
more effective
 A leaner but stronger, more flexible structure
 Additional specific responsibilities of P.M.O.:
Government reform, regulation, P.A., dialogue with supra- and intra- national
Authorities (EU, Regions, Municipalities)
 Transferring all
other executive tasks
to “sector” administrations
15
F. Bassanini - Government Reform in Italy
Reorganization of Central Government
from 18 to 12 Ministries
1 – Ministry of Foreign Affairs
2 – Ministry of the Interior
3 – Ministry of Justice
4 – Ministry of Defense
5 – Ministry of Economy - Ministry of the Treasury and Budget
and Finance
- Ministry of Finance
6 – Ministry for
Production Activities
- Ministry of Industry, Trade and Crafts
- Ministry of Foreign Trade
- Ministry of Communications
- P.M.O. Tourism Dept.
7 – Ministry of Agriculture
16
F. Bassanini - Government Reform in Italy
Reorganization of Central Government
from 18 to 12 Ministries
8 – Ministry of the
Environment and
Protection of the Territory
- Ministry of Environment
- Ministry of Public Works (part)
- P.M.O. “Servizi Tecnici” Dept.
9 – Ministry of Infrastructure
and Transport
- Ministry of Public Works (part)
- Ministry of Transport
- P.M.O. Dept. for Urban Areas
- Ministry of Employment and Social Security
10 - Ministry of Employment,
- Ministry of Health
Health and Social Policies
- P.M.O. Dept. of Social Affairs
11 - Ministry of Education,
Universities and Research
- Ministry of Education
- Ministry of Universities and Scientific Research
12 - Ministry of Heritage
and Culture
- Ministry of Heritage and Culture
- P.M.O. Dept. of Sport
- P.M.O. Dept. of Entertainment
17
F. Bassanini - Government Reform in Italy
Civil Service Reform
distinguishing Politics from Administration

«Politicians are responsible for Policies»:
Ministers define policies and strategies, assess results, appoint
general directors but have no further direct involvement in
administration

«Public managers are responsible for Administration»:
public managers are given broader powers but also greater
responsibilities, and higher salaries linked to results and
performance
18
F. Bassanini - Government Reform in Italy
Civil Service Reform
the “privatization” of Civil Service
 Civil law for civil servants
public administration has the same powers as private
sector employers
 Jurisdiction for civil service disputes
since 1998 transferred from the Administrative to the
Civil Courts
19
F. Bassanini - Government Reform in Italy
Civil Service Reform
the “contractualization” of Civil Service

Labor Contracts:

collective bargaining (at national and local levels) replaced the law in
determining employment conditions, salaries and tasks. The “integrative
negotiation”
promoting efficiency and professionalism through individual integrative
contracts


«A.R.A.N.»
an Agency created to represent the State in labor negotiations in place of the
Minister (but following Government guidelines)

Reform of labor representation
for each public sector (Ministries, Education, Health …) bargaining with the
State is allowed only to those Unions having more than 5% of the consensus in
that sector
20
F. Bassanini - Government Reform in Italy
Civil Service Reform
the Resistances
Strong contradictions and incoherencies remain in:
 The behaviour of Trade Unions:
 the choice, in principle, in favour of professionalism and merit, responsibility
and decentralisation is sometimes contradicted
 The behaviour of Politicians, administrators and public
managers:
 no global vision in salary increases
 strong defence of privileges and of the “maze of charges”
 Parliament choices:
 The choice, in principle, in favour of collective bargaining, meritocracy and
quality is contradicted by the constant enactment of rules creating
favouritism: “ope legis” promotions, permanent hiring without concours of
pro-tempore workers etc.
21
F. Bassanini - Government Reform in Italy
A performance-oriented
public administration
the new approach

Before: a formal/juridical approach to government:
compliance with laws and procedures without regard to quality and results

Now: a consumer-oriented approach


quality service and customer satisfaction
new performance control complementing traditional legal control
public service charters
promoting professional growth: a special training program

Public administration “close to citizens and businesses”:

favors the allocation of investment capital
acquires relevance “beyond the national borders”
partially sheds its authoritative nature




22
F. Bassanini - Government Reform in Italy
A performance-oriented
public administration
the new public management

An interministerial body of public managers, with few
exceptions

Access by concours, a formal competitive examination
(no more than 5% of managers may be chosen from outside the Civil
Service for a fixed term)

No more “jobs for life”: individual contracts (fixed term: 27 years) determine assignment, duties and salaries

Managers’ salaries vary depending on responsibilities and
performances
23
F. Bassanini - Government Reform in Italy
A performance-oriented
public administration
the Resistances

Administrations and judges still show a legalistic and
statist culture

The defence of irremovability and irresponsibility of top
civil servants in the name of administrative neutrality

The fear of the spoils system (it exists in the USA, but not
in Italy…)

The refusal of the culture of evaluation and merit
24
F. Bassanini - Government Reform in Italy
Simplification
the problems
 Regulatory inflation:
over 35,000 primary laws (of State and Regions)
 Regulatory costs:
unnecessary burdens on the public, on businesses and
even on public administrations
 Regulatory pollution:
ambiguity, contradictions, overlapping, layers of rules
generate uncertainty on the existing law
25
F. Bassanini - Government Reform in Italy
Simplification
a specific policy on regulatory reform

Regulatory impact analysis
to measure the cost of new regulations on the public and business

A central “Regulatory Simplification Unit”
a task force of 65 experts and staff in P.M.O., exclusively monitoring
“regulatory quality”, drafting simplification decrees and consolidated
texts

Consultation
the “Osservatorio per la semplificazione”: a consultative body with
representatives from Ministries, Regions, Local Authorities and
social parties
26
F. Bassanini - Government Reform in Italy
Simplification
the tools

“Self-declarations” replace more than 95% of the certificates

“Notification of the beginning of an activity” and silent consent
(in 194 cases) replace authorizations and licenses

One “conferenza di servizi” (combined services conference)
replaces many administrative acts

One-stop-shop (on line): a single procedure to start up a new
productive plant, replacing 43 previously needed authorizations (see
specific slide)

Few consolidated texts replace thousands of laws and decrees

Annual simplification laws enabling government to abolish or
simplify existing procedures, authorizations and licenses.
27
F. Bassanini - Government Reform in Italy
Simplification
some initial results

180 procedures ruled by primary law have already been
“delegislated” (ready to be abolished or simplified by Government
decree)

71 procedures already simplified by Government (50% in the year
2000, with the support of the new central unit). They include the onestop-shops for: new productive plants, car drivers, import-export trade

8 consolidated texts drafted (on local Governments, cultural
heritage, administrative documentation, building activities,
expropriations, university, civil service, justice expenses); 3 of them
already in force

relevant progress in regulatory capacity shown by the draft report of
the OECD regulatory review
28
F. Bassanini - Government Reform in Italy
Progress in regulatory
capacity indicators, 1998-2000
100
80
60
ITA-1998
ITA-2000
40
20
0
Transparency
Use of
Regulatory
Impact Analysis
Structured
decision
processes
Index of review
activity
Communication
of regulatory
requirements
Source: OECD, Public Management Directorate, 2000.
29
F. Bassanini - Government Reform in Italy
Simplification
# of certificates issued per year
70.000.000
70.641.741
60.000.000
50.000.000
51.661.396
40.000.000
30.000.000
30.658.516
20.000.000
10.000.000
0
1996
* Data 2000: 8-month
projection of the year 2000
1998
Source: Italy – Department of Public Administration
2000 *
30
F. Bassanini - Government Reform in Italy
Simplification
# of certified signatures issued per year
40.000.000
38.871.110
35.000.000
30.000.000
25.000.000
20.000.000
20.199.919
15.000.000
10.000.000
7.116.993
5.000.000
0
1996
1998
2000 *
Source: Italy – Department of Public Administration
31
* Data 2000: 8-month
projection of the year 2000
F. Bassanini - Government Reform in Italy
Simplification
the opinion of the public
Do you know that in most cases
all you need is a self-declaration?
Do you think it is useful?
8%
8%
yes
yes
no
no
92%
92%
Source: ISPO
32
F. Bassanini - Government Reform in Italy
Simplification – the one-stop-shop example
“not only a single access, but also a single answer”

Since 1999 a single procedure to start up a new business,
replacing 43 authorizations previously needed

Before: 2-5 years to get a final answer

Now: normally no more than 3 months in most cases, max 11
months
(average time: 57 days in a sample of 100 operational one stop shops)

One single office to deal with businesses and a new role for
Municipalities in the development of their territory
 An
e-structure, accessible through the net
33
F. Bassanini - Government Reform in Italy
The new public budgeting
from financial to economic budget

Before: a segmented spending model with more than
6.000 expenditure units

Now: about 1.000 basic budget units, matching each
Ministry’s target and responsibility

Only one administrative office responsible for each
basic unit

New economic budget showing the link between the use
of resources and achievements
34
F. Bassanini - Government Reform in Italy
The new public budgeting
new spending procedures

Drafting the budget: no longer the traditional criteria of
incremental spending

An effective cost analysis to back the annual financing law
and the spending legislation

More effective constraints on Government expenditure bills
and parliamentary amendments

An electronic mandate

Towards a permanent electronic market for public purchases

Planning hiring of civil servants
35
F. Bassanini - Government Reform in Italy
The new public budgeting
public sector personnel cost (% of GDP)
13 12,8 12,7
12,5
12
11,5
12,7
12,5
12
11,6 11,5
11,4
11
10,8 10,7
10,5
10
10,5
10,2
9,8
9,5
9,5
9,1
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
9
Source: OECD and Italy DPEF 2000-2003
36
F. Bassanini - Government Reform in Italy
The new public budgeting
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
public deficit (% of GDP)
-12
-11,1
-10
-8
-6
-10,1
-9,6
-9,2
-8,5
-7,7
-6,6
-4
-2,8
-1,9
-2
-2,7
0
-1,3 -1 -0,7
0,2
1,3
2
Source: ISTAT and Italy DPEF 2000-2003
37
F. Bassanini - Government Reform in Italy
The new public budgeting
public debt (% of GDP)
129
125,3
124
124,9
124,6
122,4
119,1
119
118,7
114,9
114
112,1
109
108,7
106,6
103,5
104
99,7
101,5
99
98
95
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
94
Source: ISTAT and Italy DPEF 2000-2003
38
F. Bassanini - Government Reform in Italy
The new public budgeting
primary expenditure in Italy and EU (% of GDP)
45
45
44
44
43
43
42
42
41
41
40
40
39
39
38
38
37
37
Italy
EU
1998
1990
Source: ISTAT and European Commission
39
F. Bassanini - Government Reform in Italy
e-Government

IT: the best resource for a leap forward in quality change

Electronic management of administrative documents,
procedures and archives

12,000 billion liras (5,2 bill. USD) for investments in 20002002 (11,000 already allocated, 1,300 coming from the
UMTS licenses)

Electronic ID card (under experiment)

The “Government Portal”: a single gateway for public
administrations

Towards electronic public procurements
40
F. Bassanini - Government Reform in Italy
e-Government
some first results

«Electronic Revenue Service»: 100% income
tax returns (40 millions per year) are filed and
reviewed electronically

Land Register (80% of documents are filed and
reviewed electronically)

Electronic signature (having legal value from
1998): more than 1 million signatures already
certified by 8 companies

A Single Administrative Network
41
F. Bassanini - Government Reform in Italy
The Italian Action Plan for
e-Government

Citizens will obtain any public service by simply
applying to any front-office administration in charge

Citizens will communicate variations in their personal
information to the administration only once

Each administration will be able to gather the
information needed, wherever stored (all public
services on line)

All the public services for which it is technically
possible will be delivered on line
42
F. Bassanini - Government Reform in Italy
Action Plan points






Information portals
Portals for supply of
services
National networks
Local administrations on
line
Integration of personal
data
National index of personal
data
43







Exchange of
information system for
local land-registries
Electronic identity cards
Promotion of digital
signatures
Informatic Protocols
e-procurement
Foundation courses
Specialist courses
F. Bassanini - Government Reform in Italy
The Future of Reform
The crucial phase of implementation
the Reform has almost been achieved in its laws
and decrees, but laws alone cannot change citizens’
lives
What are now the main challenges?
44
F. Bassanini - Government Reform in Italy
The Future of Reform
Changing the culture
Acquiring and disseminating new approaches:
 to technological and organizational innovation

to simplification (releasing unnecessary administrative
burdens)
to quality of service and performance

to citizen-user satisfaction

to rewarding professionalism and merit

to promoting, encouraging and energizing citizens and
businesses

45
F. Bassanini - Government Reform in Italy
The Future of Reform
Communication
disseminating and
sharing information to
explain to citizens their new rights
46
F. Bassanini - Government Reform in Italy
The Future of Reform
Investing on Public Administration

in training, to improve knowledge and
awareness of the main interpreters of the Reform

in IT, to exploit the enormous opportunities of
digital revolution

in financial incentives, to promote quality of
services and professional growth
47
F. Bassanini - Government Reform in Italy
The Future of Reform
The «Maastricht approach»
EURO example: Italy is a country capable
of finding hidden human resources to
face the most difficult tasks
48
F. Bassanini - Government Reform in Italy