Slovenia has until quite recently enjoyed successful economic development, but now faces an urgent need to consolidate its fiscal position and put the economy back on the path to sustained growth. As in other OECD countries, this involves a delicate balancing act. Significant short-term savings in government expenditure must be found, but at the same time the conditions for long-term growth need attention. This puts the spotlight on the efficiency and effectiveness of the public administration. A more efficient public administration can contribute to fiscal consolidation. But the public administration also needs to be more effective and “fit for purpose” in support of government strategy, beyond the immediate search for savings. Without a well-functioning public administration, it will be very difficult to establish and implement the right strategies and policies for Slovenia’s long-term well-being. A great deal is therefore at stake with public administration reform in Slovenia.

Slovenia’s small and open economy raises its sensitivity to global developments, and the recession in 2009 generated a strong fiscal deterioration and worrisome upward trend in the public debt, although both the public debt and deficit are expected to remain below the OECD average. Urgent fiscal consolidation measures have included the reduction of public sector employment and the public sector wage bill in order to reduce operational expenditure. At the same time, a well-functioning public administration is critical to helping the government set a workable strategy for recovery and long-term growth, and to identify and implement the policy measures in support of this. The effectiveness of the public administration as well as its efficiency needs attention at this stage, requiring actions to strengthen strategy planning and its link to budgeting; rationalisation of internal functions and structures; establishing a more coherent Centre of Government and strengthening the political/administrative interface; and addressing contextual issues such as legislative complexity that undermine flexibility and the implementation of reforms.

Since independence in 1991, Slovenia has successfully transitioned to an advanced economy. It is, however, challenged by a constrained resource base that limits its potential for economies of scale, by import dependence, and by sensitivity to the economic difficulties experienced by its key trading partners. In 2009, Slovenia suffered a severe economic recession, resulting in a strong deterioration in public debt. Since then it has implemented a series of urgent fiscal consolidation measures driven by expenditure reduction-measures focused on reducing public sector employment and the public sector wage bill. Slovenia’s fiscal consolidation strategy is ambitious in its aims. The effects of the strategy on the efficiency and effectiveness of the public administration will need to be taken into account.

The OECD review of public governance in Slovenia was commissioned in March 2011 by the Slovenian Ministry of Public Administration and the Government Office for Development and European Affairs, in support of more effective and efficient public governance and a sharper Slovenian response to the issues raised by the fiscal and economic crisis. The Slovenian Government had already been developing a range of reforms to strengthen public governance, which the review takes into account.

This chapter presents Slovenia’s economic and public finance position. It starts by considering the key features of Slovenia’s economy, and how these have affected its ability to navigate the global economic and fiscal crisis. It goes on to consider the size and structure of government revenues and expenditure, against the background of Slovenia’s public debt and the need for fiscal consolidation. Due to its impact on the public administration, particular attention is paid to the fiscal consolidation strategy that Slovenia has enacted as a means to restore public finances.

This chapter examines the linkages between Slovenia’s strategic planning and budgeting systems, and the ways in which these can be improved. It starts by considering why these linkages are so important. It goes on to examine the areas in which Slovenia may consider further action to strengthen the linkages: effective strategy development and implementation; embedding performance budgeting; and further simplification of the budget process.

This chapter considers Slovenia’s machinery of government, that is to say, the systems and structures of government and the linked issue of HR management. It starts with a review of how Slovenia might reorganise and rationalise its machinery of government. It goes on to examine how a more strategic approach can be taken to workforce reduction, and how the use of performance management systems to achieve results can be strengthened. Finally, it assesses how Slovenia can further develop a whole-of-government vision and strengthen its central HR function.

This chapter analyses the governance structures and decision-making processes at the Centre of Government and within individual ministries. It considers three issues of key importance to the effectiveness of these structures and processes. The first is the political and administrative interface. The second is the institutional framework and responsibilities of the Centre of Government. Finally, the chapter examines the related issues of co-ordination, collaboration and co-operation within the central public administration.

This chapter considers the issues that will need to be addressed in order to ensure that reform actually happens. It considers three specific challenges for Slovenia. The first is a reliance on legislation and a general context of overregulation. The second is Slovenia’s constitutional context and the system of public referenda. Finally, the chapter considers the role of the social partners and the influence of trade unions.