Mark
Executive summary Since 2007, the OECD has undertaken a substantial and growing body of analytical work under the aegis of its "Making Reform Happen" (MRH) project, which seeks to better understand both the obstacles to reform that governments face in different policy domains and the most effective ways of overcoming them. This volume presents some of the findings that have so far emerged from ongoing work within the context of MRH. Its principal aim is to see how an understanding of past reform experiences may be of use to policy makers seeking to design, adopt and implement reforms in the years to come. The chapters that follow examine the particular challenges to reform and explore possible ways to meet those challenges in nine different fields of public policy: competition and market opening; pensions and labour markets; tax policy; environmental protection; education; health care; public administration; regulatory policy and fiscal consolidation. They reflect the experiences of the OECD and its member countries in each domain, with reference to both OECD-wide trends and specific cases, in the belief that a better understanding of past successes and failures should enhance prospects for better design and implementation of future reforms.
Reform beyond the crisis This chapter draws out some of the principal lessons that emerge from reform experiences in OECD countries. It seeks to identify both common patterns across policy domains and factors that appear to be specific to particular types of policy reform. The chapter begins with a consideration of the challenge of cross-country policy learning in an environment characterised by broadly similar reform challenges but widely differing reform contexts, a fundamental issue that confronts all the authors in this collection, as well as officials and policy makers in OECD countries who seek to learn from each other’s experiences. The discussion then turns to some of the cross-cutting lessons for policy makers that nevertheless seem to be emerging from the "Making Reform Happen" work. The chapter goes on to deal with specific policy domains, highlighting some of the main points that emerge from the individual chapters in this book. A further section explores the meaning of these findings in light of the global economic and financial crisis and looks at the challenge of reform after the crisis. The final set of issues addressed concerns the implications of these findings for the work of the OECD.
Opening markets to competition This chapter offers an overview of OECD experience in the field of product-market reform and seeks to identify lessons that may assist policy makers in advancing such reforms where unnecessary restraints on entry or competition remain in place. It begins with a summary of market-opening reforms in the OECD before turning to look in greater detail at reform experiences in respect of both internationalisation (foreign trade and foreign investment) and domestic liberalisation. This is followed by a look at the process of product-market reform, including interactions with interest groups, consumers and other stakeholders, the creation of effective institutions to drive and implement reforms, and the complementarities that can be realised when reforms are pursued in a co-ordinated fashion across a number of domains. The major lessons that emerge from this analysis are then summarised in a brief conclusion.
Advancing pension and labour-market reforms This chapter aims to isolate the factors that may impede the adoption and implementation of reforms to pension systems and labour-market institutions, and to identify the conditions, sequencing and packaging of successful reforms. The chapter begins by setting the economic and political scene for implementing pension and labour-market reforms. It briefly discusses the factors that make such reforms necessary and, in some countries, more or less unavoidable. The perceptions that individuals in these countries have of the economic risks and their attitudes towards the feasibility of reforms are also analysed. In an effort to take stock of reform processes so far, the main pension and labour-market reforms implemented (or attempted) in OECD countries are then reviewed. The analysis of these reforms (or reform failures) is crucial to identifying the main elements leading to a successful reform process. Previous research on the political economy of reforms has identified several economic and political factors that may be decisive for success. These are summarised next, focusing on empirical testing of the relevant theories. Finally, in the light of these results, the chapter ends with a brief outline of feasible reform strategies.
Making fundamental tax reform happen This chapter begins with a discussion of the objectives of tax reform before proceeding to explore the most important environmental factors that influence the reform process, focusing on the circumstances that explain when these objectives and environmental factors may become an obstacle to the design and implementation of tax policies. The second part of this chapter discusses strategies that might help policy makers to successfully implement fundamental tax reforms.
Making reform happen in environmental policy This chapter seeks to identify lessons that may be of use to policy makers seeking to advance environmental policy reform. Owing to the breadth of this field, it considers reforms in a number of environmental policy domains that are relevant to a number of different OECD countries. They include energy and climate change, water allocation and pollution, waste management, agriculture and fisheries. In many OECD countries, these environmental topics have been the subject of policy reform rather than just incremental change, but the reforms that have been so far implemented are far from complete, so they provide a suitable study focus for this chapter.
Making reform happen in education This chapter discusses factors that influence education reform. It starts by describing the features of the education sector that are shared with other areas of public policy and those features that set education apart. This is followed by three case studies that examine in detail the implementation of education reforms in Denmark, Finland and Portugal. The final section draws on both the case studies and the larger literature on policy reform to identify some conclusions about what drives – or impedes – the implementation of education reform.
Effective ways to realise policy reforms in health systems This chapter investigates the factors that can help or hinder the reform of health systems in OECD countries. "Reform", here, refers to changes to health systems which aim to improve their performance in one or more dimensions. The chapter is written mainly from a prescriptive point of view – what should governments do to increase the prospects for successful reforms? It is also written mainly from the perspective of economics, although a few selected references are made to political science literature. The first part of the chapter considers the need for reform in health systems. It goes on to set out a general framework for examining the determinants of success and failure in health reforms and to focus on the governance of reforming health systems, identifying some enabling and disabling factors that are likely to be partly under the control of governments. The second part of the chapter presents five case studies of the factors associated with successful and unsuccessful reforms, based on five recent OECD Reviews of Health Systems – in Finland, Korea, Mexico, Switzerland and Turkey. Two final sections discuss the findings that emerge from the case studies and draw some conclusions.
Modernising government This chapter analyses a number of key challenges for implementing public administration reform. It highlights these challenges and discusses possible tools to address them, drawing on past and present reform experiences in several OECD countries. It is based on OECD analyses of public administration reforms and other literature, looking primarily at two policy domains: decentralisation and public employment reforms. The focus is on the reform process rather than the nature of the reforms themselves. The chapter is structured as follows: the first section provides a general description of public administration reforms and the general challenges faced by reformers. It briefly overviews experiences in public administration reform in the last three decades in several OECD countries. The rest of the report is organised according to the three phases of the reform process: planning, implementation and sustainability. Although these phases do not always – or even usually – unfold in such a neat sequential pattern, it is analytically useful to distinguish them in this way, since they present different challenges. For each of these phases, the key challenges for implementing public administration reforms are identified, and a set of possible tools to address these challenges are described, together with specific examples of tools some OECD countries have used to address similar challenges.
Enabling regulatory reform This chapter examines the role of institutions in the promotion of regulatory reform, exploring the link between the existence of specific institutional arrangements and the endorsement of timely and appropriate practices of regulatory management. It highlights how the widespread use of regulatory impact assessment has facilitated the introduction of mechanisms of systematic consultation with those affected by reforms. The chapter then discusses the role played by regulatory management in improving the overall functioning of the government and in ensuring the coherence of its action, thus providing a wider perspective for the definition of reform opportunities. The chapter’s last section provides an overview of the literature developed to explain the importance of international organisations in supporting reforms, underlining in this framework the specific methods used by the OECD. In particular, it draws attention to the role of the OECD in improving the regulatory environment in member countries. It emphasises that the OECD does not rely on conditionality in order to promote reform but on "soft methods of co-ordination", which represent a slower, but not necessarily less effective method of disseminating best practice and supporting the timely adoption of reform initiatives.
Achieving and sustaining fiscal consolidation This chapter begins with an examination of the factors that condition the propensity for governments to take on debt: political and governance factors, public attitudes to debt, the role of financial markets and the general imprecision about which debt targets should be pursued. It then examines the evidence, based largely on pooled regressions over large country samples, regarding the exogenous and policy-related factors which have affected the success of fiscal consolidation efforts. The chapter goes on to examine the role of fiscal institutions: rules and autonomous agencies in fiscal retrenchment. The chapter’s final section sums up and assesses how the political economy context has changed with the financial crisis, giving some pointers as to what may be needed to re-establish a consolidation path and make it less prone to setbacks.
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