Chapter 4. Build efficient and responsive governments

This chapter puts forward two crucial ideas: the need for a whole-of-the-government coordination and integration of inclusive growth actions, across multiple levels of government; and to inclusive policy-making, defined as the practice of identifying and incorporating citizens’ views and actual needs into the design, implementation and evaluation of policies. At the national level the chapter discusses inclusive policy-making, defined as the process, including with experimentation, by which governments enable the incorporation of citizens’ needs and views into the design, implementation and evaluation of policies which will help better target government programmes and increase their efficiency.

Inclusive policy making requires capacity from governments to deal with complexity in policy making, assess differentiated policy impacts from broader viewpoints while eliminating discrimination and behavioural bias, and identify complementarities and trade-offs between and within policies and policy objectives. It also requires that public policy-making is protected from undue influence, where a public decision is captured by a narrow interest group to reflect its own interest. Integrity, openness and accountability in decision-making ensure that the needs, preferences and concerns of stakeholders, including underserved populations are reflected in decision-making. These components are measured by a number of indicators, including trust in national government and satisfaction and confidence across public services. A set of best practices on inclusive growth governance in sectoral areas (e.g. innovation, skills and labour market institutions) is presented together with some governance practices that cut across several policy areas.

The Inclusive Growth Framework for Policy Action on Inclusive Growth consolidates some of the key policy recommendations to sustain and more equitably share the gains of economic growth from related OECD work, around broad principles to build efficient and responsive governments through:

(i) aligned policy packages across the government;

(ii) integration of distributional aspects upfront in the policy design; and

(iii) assessing policies for inclusiveness and growth impacts.


Inclusive policy-making

Trust in governments is weak

People's trust in public institutions has decreased, coupled with falling civic engagement und political efficacy. People’s trust in institutions matters for the smooth functioning of the economy, the democratic process as well as people’s well-being (Algan and Cahuc, 2013). It is essential for the success of public policies that require broader social and political consensus, and it reduces incentives for policy-makers to seek short-term gains. On average, only 38% of people across the OECD declare trusting their government, as compared to 42% ten years ago (Figure 4.1). In countries where data are available for several public institutions, the parliament is consistently reported as the least trusted entity compared to the legal system and the police (Murtin et al., 2018; OECD, 2017a; OECD, 2017b).

Figure 4.1. Lower trust in government across OECD countries
Average confidence in national government in 2014-16, and the change since 2005-07

Note: Data for Iceland and Luxembourg refer to 2008 rather than 2006. The simple average covers all OECD countries.

Source: OECD calculations based on Gallup World Poll,


Growing distrust has been coupled with falling civic engagement. Voter turnout has steadily declined across the OECD, especially among groups who are themselves less well-represented by the political classes - the young, the less educated and those with lower incomes. Self-reported voter turnout is 14 percentage points lower for people in the bottom income quintile compared to those in the top quintile, and is around 17 percentage points lower among youth (18-24) than among older people (above 65, OECD, 2017a; OECD, 2017b). How people vote has been affected as well: in Europe, lower trust in institutions has gone in hand with higher votes for populist parties (Algan et al, 2017).

People’s sense of political efficacy has only gone down. Political efficacy, or the feel of having a say in what government does, impacts on whether citizens’ feel included in the political process, are motivated to engage and ultimately trust those governing them. On average, only one in three people in the OECD feel they have influence on what the government does, with this share ranging between 20% or less in Italy, Slovenia and France to 60% or more in Chile, Greece and Lithuania. Like voting, political efficacy is not distributed equally across different population groups: the less educated, less wealthy, unemployed and older people feel less empowered to influence their institutions (Murtin et al., 2018; OECD, 2017b).

Box 4.1. Measuring trust

The OECD has been developing new tools to measure people’s trust and confidence, including interpersonal trust, in support of policy recommendations. As part of the OECD Better Life Initiative launched in 2011 and OECD mission to promote better policies for better lives, the OECD has initiated the OECD Trust Strategy at the 2013 OECD Ministerial Council meeting on Jobs, Equality and Trust to provide guidance, including methodological and measurement advice, to restore confidence in public institutions. These efforts are in line with the Sustainable Development Goals (SDGs), notably the Goal 16 that aims to “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable, and inclusive institutions at all levels”. In addition, the OECD survey of Adult Skills, PIAAC, includes questions on trust to analyse the extent to which skill acquisition and trust are related.

At the same time, several initiatives have been carried out in OECD countries to measure trust, based on comparable and statistically sound information. For example, the National Statistical Offices in New Zealand, Canada, Korea or Australia that include trust measure in their surveys. Progress has been made towards collecting and using trust indicators in line with the OECD statistical standards of validity and reliability.

Despite this progress, the measurement of trust concerns a few issues including the measurement of behavioural bias (that is, the difference between self-reported and experimental measures), interpretation limits suggesting that a distinction between trust in government and public institutions remains unclear, limited data availability in terms of timeliness and comparability across countries, and the lack of insights about what information trust measures really capture and how that can be integrated in the policy design.

Beyond the OECD sources of data used in this report, most of the data can be retrieved from unofficial sources such as the Gallup World Poll, the World Values Survey, the European Social Survey or the European Quality of Life Survey. However, the coverage varies across countries and over time as well as its representativeness (i.e. typically around 1000 persons per country). In response to these measurement challenges, the OECD launched the TrustLab, an international programme that collects information on trust relying on traditional survey-based measures, and also behavioural and experimental data. In 2017, the OECD launched in 2017 the Guidelines on Measuring Trust that support National Statistical Offices to measure trust effectively and comparably across countries. On that basis, the OECD has incorporated the measurement of trust in numerous areas such as the OECD How’s Life report and the Better Life Index and the OECD Inclusive Growth Framework for Policy Action.

The decline in trust in institutions precedes and extends beyond the great recession. Trust has fallen by more than 15% points in Greece, Portugal, and Spain – some of the OECD countries that were hit hardest by the crisis. By contrast, in Germany, Poland, and Slovak Republic, which are some of the countries where trust has increased the most, the average resident is generally better off than she was in 2005 (OECD, 2017a). Nevertheless, the decline in trust extends beyond the Great Recession and sole economic drivers. In the United States, where opinion polls have collected measures of confidence in the federal government since the 1950s, trust has been continuously falling for over 50 years, from close to 8% in the early 1960s to less than 20% today (OECD, 2017g; OECD, 2017b; OECD, 2013a). Part of the declining trust may be subject to measurements issues, such as perception or cultural bias. The OECD has worked on measures of trust to help understand better the underlying concerns of citizens (Box 4.1).

Restoring trust through better services delivery

Better governance can help to enhance trust and improve citizens’ perceptions of institutional and representative performance:

  • High-quality public services are essential to people’s lives and closely related to trust (OECD, 2017a). On average, more than two-thirds of citizens across the OECD are generally satisfied with service provision in their local area for health care, education, public transportation, and the police. Interestingly, people that have actually used a specific service over the past year report higher levels of satisfaction. However, differences in service satisfaction between countries are large, and satisfaction with certain institutions is markedly lower overall (e.g. only 49% across OECD countries trust the judicial system). Improving service quality and simplifying access could hence be a channel to improve trust.

  • Improving government integrity has been found to be one of the most important determinants of trust in government and is therefore a policy priority (Murtin et al., 2018; OECD, 2017a). More than half of OECD residents consider corruption to be widespread in their government, ranging from 18% in Sweden to 89% in Italy (Figure 4.2). Since 2006, the perception of government corruption rose by 3 percentage points on average across the OECD, in line with the fall in trust in institutions. While only relying on data on the prevalence of corruption, as perceived by people, may provide an incomplete measure of the phenomenon, the sheer size (and trend) of this measure underscores that corruption is of significant concern to citizens.

  • Other government characteristics that have been found to go hand in hand with high trust include government reliability, i.e. its capacity of reaction to adverse events, as well as its responsiveness and openness to citizen input (Murtin et al., 2018; OECD, 2017a; OECD, 2017b). Perceived fairness regarding treatment of minorities in public service interactions are also correlated with trust.

Restoring trust by making policy-making more responsive

Only less than half of OECD countries have developed frameworks on comprehensive citizen participation in the policy cycle. Countries have made significant progress in promoting stakeholder participation, both in the process of setting national priorities, in developing new laws and regulations, designing, implementing and evaluating public policies (Figure 4.2). Integral approaches to citizen participation in public life are seen as increasingly important for acceptability of policies and prevention of policy capture. However, only few OECD countries have developed this type of framework. Developing such a framework would favour the use of participatory practices by defining which mechanisms to use (the what), at which each stage of the policy cycle (the when), which stakeholders to involve (the who) and how citizen engagement should be encouraged to do participation right and ensure effective and efficient delivery of high quality of public policies and services, increase accountability, enhance transparency and regain people’s trust in public institutions.

Figure 4.2. More than half of OECD residents perceive their governments to be corrupt
% of people considering corruption to be widespread across government, 2006 and 2016

Note: The OECD average is the simple average based on the 32 countries with data for both time periods, and excludes Greece, Iceland and Luxembourg.

Source: OECD calculations based on Gallup World Poll.


Box 4.2. Types of stakeholder participation

Stakeholder participation, as defined by the OECD Recommendation of the Council on Open Government, refers to all the ways in which stakeholders can be involved in the policy cycle as well as in service design and delivery, including information, consultation and engagement. Information: an initial level of participation characterised by a one-way relationship in which the government produces and delivers information to stakeholders. It covers both on-demand provision of information and “proactive” measures by the government to disseminate information. Consultation: a more advanced level of participation that entails a two-way relationship in which stakeholders provide feedback to the government and vice-versa. It is based on the prior definition of the issue for which views are being sought and requires the provision of relevant information, in addition to feedback on the outcomes of the process. Engagement: when stakeholders are given the opportunity and the necessary resources (e.g. information, data and digital tools) to collaborate during all phases of the policy-cycle and in the service design and delivery.

Governments are increasingly carrying out open government reform agendas to ensure more responsive policy making. The OECD Recommendation on Open Government defines open government as “a culture of governance that promotes the principles of transparency, integrity, accountability and stakeholder participation in support of democracy and inclusive growth” fostering inclusive institutions that enable effective citizen participation, pluralism and a system of checks and balances contributing to inclusive growth (OECD, 2016a; OECD, 2016b). All OECD countries have established open government initiatives. While in 49% of them, there is a single open government strategy, in the other 51% open government initiatives are integrated in other strategies (Figure 4.4). 76% of the countries that stated having an open government strategy were actually referring to an Open Government Partnership (OGP) Actions Plan which are not a comprehensive national strategy. These plans serve as a crucial implementation tool for a variety of unconnected initiatives.

Figure 4.3. Availability of a document with citizen participation in the policy cycle

Source: OECD (2016b), Open Government: The Global Context and the Way Forward, OECD Publishing, Paris.


Figure 4.4. Availability of a single open government strategy

Source: OECD (2016b), Open Government: The Global Context and the Way Forward, OECD Publishing, Paris.


Digital frameworks provide opportunities - governments need to map, understand and integrate citizens’ demands and needs in the design and delivery of public service strategies. In 2016, about 36% of individuals from OECD Member countries submitted filled forms via public authorities’ websites. However, there are persisting differences in the use of digital government services across various population groups. When comparing the level of education of users of digital government services substantial differences can be found (Figure 4.5). On average across OECD countries in 2016, about 54% of individuals with higher education submitted filled forms via public authorities’ websites, against 17% of individuals with low levels of education. This difference in the use of digital government services by education level is less important in Nordic countries (such as Denmark, Finland and Norway) while it is more important in Estonia, Greece, Hungary, Ireland, Latvia and Portugal. The level of income also seems to influence the level of digital interaction with public authorities (Figure 4.5; Figure 4.6). On average in OECD Member countries, about 49% of individuals in the top income quartile (richest) used the Internet to submit filled forms via public authorities’ websites, against about 25% of individuals in the fourth income quartile (poorest).

Figure 4.5. Individuals sending filled forms via public authorities’ websites in the past year
OECD countries, by education level, 2006 and 2016

Note: Data for OECD non-European member countries are not available. Mexico: 2015 rather than 2016.

Source: OECD, ICT database; and Eurostat, Information Society database.


Figure 4.6. Individuals sending filled forms via public authorities’ websites in the past 12 months
By income level, 2016

Note: Data for OECD non-European member countries are not available as well as data for Iceland, Italy, Sweden and the UK.

Source: OECD, ICT database; and Eurostat, Information Society database.


Figure 4.7. Open-Useful-Reusable Government Data Index (OURdata)
OECD countries, 2017

Note: Data for Hungary, Iceland and Luxembourg are not available. Denmark does not have a Central/federal data portal and are not displayed in the Index. Detailed methodology and underlying data are available in the annex online. Information on data for Israel:

Source: OECD Survey on Open Government Data .


Open Government Data policies can help to shape people-centred policies. By ensuring Open Government Data (OGD) availability, accessibility and reuse by public, private and civic actors, governments can enable the collaboration with a number of actors to improve the design of public services with a citizen-driven approach. The OECD OURdata Index (open-Useful-reusable data Index) is one of the tools (together with national OGD policy reviews and analytical work) developed by the OECD to support member and partner countries in the promotion of OGD policies to create public value, measures the efforts made by governments to foster government data availability, accessibility and re-use. According to the 2017 OURData Index governments still need to improve their focus on using open government data to engage a comprehensive set of stakeholders from the whole OGD ecosystem to collaborate and crowdsource inputs for policy making and service delivery. The use of OGD remains therefore an untapped opportunity to empower people by letting their needs lead decisions on services and policies (Figure 4.7).

A strong stakeholder engagement can help to implement policies, tools and projects that are closer to the broader public interest. Improved stakeholder engagement allows governments to collect better evidence as a basis for their decisions. Involving a wide spectrum of interested parties and reaching out also to those that are not necessarily used to, able or willing to “get involved” should help to collect more diverse ideas and opinions, making the decisions more responsive to the society’s needs at different levels and leading to a higher quality of decision-making based on a better and sounder evidence. Through engagement, stakeholders develop a sense of ownership over policy choices, reforms and projects’ outcomes. In addition, stakeholders’ engagement can bring voice to those that are most vulnerable to economic uncertainty and social exclusion e.g. elderly, unemployed, deprived or unserved segment of the population. Innovative forms of service delivery have targeted the need of these groups and restructure delivery around their needs lowering the social, economic and physical barriers that prevented users to access services.

Most OECD countries have implemented a requirement to engage stakeholders in developing both primary and secondary regulations. Many countries have mechanisms for involving stakeholders in regulation design, however there is quite some diversity on the actual instruments used (Figure 4.8). An increasing number of countries are using a law or even a constitutional requirement to commit civil servants to stakeholder engagement, illustrating the importance that countries give to this issue (OECD, 2015a).

Meaningful stakeholder engagement continues to face significant challenges, especially for including low-income populations. These challenges can be regrouped under the following three main categories, including (i) low administrative capacity, given lack of planning, weak mandate or incentives or a non-supportive administrative culture; (ii) hard to reach societal groups, in particular deprived segments of population (whether on the basis of social or economic backgrounds, ethnic, cultural or gender based identity or location factors); and (iii) weak incentives to participation, including issues of availability, accessibility, relevance or perceived impact of the time and effort required to engage.

Figure 4.8. Requirements to conduct stakeholder engagement - primary and subordinate regulations

Note: Based on preliminary data from 34 countries and the European Commission.

Source: Forthcoming Regulatory Policy Outlook and 2014 Regulatory Indicators Survey results.


Figure 4.9. Types of consultation

Note: Early stage refers to stakeholder engagement that occurs at an early stage, to inform officials about the nature of the problem and to inform discussions on possible solutions. Later stage consultation refers to stakeholder engagement where the preferred solution has been identified and/or a draft version of the regulation has been issued. Based on data from 34 countries and the European Commission.

Source: OECD (2015b), OECD Regulatory Policy Outlook 2015,

Figure 4.10. Obligation to provide feedback on comments

Note: Based on data from 34 countries and the European Commission.

Source: OECD (2015b), OECD Regulatory Policy Outlook 2015,

Despite a formal requirement to engage stakeholders, it has yet to become part of the day-to-day work of policy makers and citizens. For that to happen, stakeholders need to be engaged before the final regulatory development phase to ensure meaningful inputs into the rule-making process. Currently few countries systematically consult with stakeholders before they made a decision to regulate in order to explore possible options to address possible problems, for example through the use of green papers. Furthermore, all affected parties should be considered in order to guarantee inclusiveness and a level playing field. Countries use various types of consultation processes involving different types of stakeholders (StatLink 2

Figure 4.9). Limiting consultations to the “usual suspects” through targeted consultations (i.e., over-relying on meetings with special groups) might discriminate against SMEs, new entrants, and foreign traders and investors (Figure 4.10; OECD, 2015a; OECD, 2015b).

Mainstreaming gender equality and diversity in public life

Diversity of views and experiences in public sector organisations can help expand the pool of talent available to contribute to organisational performance, and can lead to policies and services that better reflect citizens’ needs. Equal representation of women and men in public employment is an important indicator of progress towards building a more diverse and inclusive workforce in the public sector. In 2015, gender balance was the main goal of diversity strategies in 15 European Union countries of which 11 are OECD countries. Across the OECD, the representation of women in public employment is larger (58%) than in total employment (45%). This picture is consistent with the representation of women in central government, where they account on average for 53% of employees (2015). Greece, Italy, Denmark, Belgium and Spain have a relative gender balance (51% to 52% of women). Hungary has the highest share of women in central government (72%), followed by Poland (69%) and the Slovak Republic (68%). On the other side of the spectrum are Japan (18%), Korea (29%) and Switzerland (31%).

There is no gender parity across institutions and sectors. In fact, one of the reasons contributing to an almost gender equal share of public employment is that some key public sector occupations, such as teachers or nurses, are heavily female dominated differently from other occupations. This highlights a persisting gender-based occupational segregation. Higher the positions, the fewer women work in them. Although gender balance at the most senior levels is an important indicator of the role that women play in decision-making and policy making, with a greater chance of inclusive outcomes, the leaky pipeline at management level appears consistent across the public sector and very little progress have been reported in recent years. In the 28 European Union countries for which data are available, women held 35.3% of the highest administrative positions in national government in 2016 – a minimal increase of 5.1% over 2013. As for the second most senior level, women accounted for 41.1% of posts, a tiny increase of 2.5% over 2013. Behind these average figures, there are variations from country to country, particularly at the highest levels of the civil service (OECD, 2016d; OECD, 2017e). Looking at individual country trends, very few countries achieved gender parity. In Poland, Greece, Iceland and Latvia the share of women in senior positions is the highest (between 50% and 54%). The smallest shares are found in Japan (3%), Korea (6%) and Turkey (8%). Iceland and Norway are the countries where the share of women in senior positions has increased the most since 2010 (by 12 and 11% points). In Denmark, Portugal and Spain, the share of women in senior positions has decreased by about 3-4% points. In central government, the extent to which women hold senior positions varies considerably.

Steering policies towards gender parity in the most senior levels of administration can help to attract more women into these positions. Hiring targets for women are in place in 10 OECD countries and 6 OECD countries have promotion targets for women. In many countries the public sector also offers more flexible working conditions compared to the private sector. For example, in 16 OECD countries the public sector offers more child or family care arrangements than the private sector.

New forms of open governance are emerging with significant potential for more inclusive policy-making. The role of government is constantly evolving as citizens and other stakeholders are better informed with digitalisation and demand that policies and decisions reflect their preferences, needs and views. This has contributed to a new form of governance that goes beyond traditional participatory approaches and to transform accountability lines, emphasising the sharing of power and decision-making, information and mutual respect between governments and stakeholders. The OECD Recommendation of the Council on Open Government defines it as any interested and/or affected party, including: individuals, regardless of their age, gender, sexual orientation, religious and political affiliations; and institutions and organisations, whether governmental or non-governmental, from civil society, academia, the media or the private sector.

Preventing and tackling policy capture for policies to benefit the worst-off

Policy capture can strongly challenge responsive policy-making. Policy capture is by definition the opposite of inclusive policy-making, but it also perpetuates or even exacerbates social and economic inequalities and thereby endangers inclusive growth (OECD, 2016c). Public policies determine to a large extent the distribution of costs and benefits in an economy. Tax exceptions, subsidies, private sector participation in government services, emission standards, public health policies and education grant programmes, to name but a few, directly influence who gets what. Public decisions over such policies are therefore at risk of being unduly influenced away from the public interest towards the interests of specific groups or individuals. Whenever policies are captured, the obtained undue benefits can be reinvested in further influence-seeking, thereby maintaining or exacerbating inequalities of all types.

Policy capture fuels a vicious cycle of inequality, and undermines the capacity to reform and weakens the economic growth potential of economies. Indeed, where a weak integrity system is making the capture of policies a viable option, obtaining “legal” protection against competitive pressure through undue influence may be the most efficient way of obtaining rents for companies (OECD, 2016c; OECD, 2017e). Recent data from the Eurobarometer shows that there is a widespread perception that the only way to succeed in business is to have political connections, that favouritism hampers business competition and that too close links between business and politics lead to corruption (Figure 4.11; OECD, 2016c; OECD, 2016e). In turn, the same survey shows that most respondents say that the financing of political parties is not sufficiently transparent and supervised. Political finance, however, is one of the ways private interests can influence policy-making (OECD, 2017d; OECD, 2017e).

Figure 4.11. The value of connections to government

Source: European Commission (2017), Standard Eurobarometer 87.


Addressing the vicious cycle of policy capture is key to recover trust of citizens. Reports from investigative journalism (such as the Panama or the Paradise Papers) that are increasingly unveiling (often legal but morally) questionable benefits accruing to elite suggest that citizens increasingly perceive policy-making as exclusive and serving only vested interests where well-connected elites benefit at the cost of the public interest. A survey conducted by the World Economic Forum amongst youth around the world, shows that 48.6% of respondents see corruption and lack of transparency as the most important factor contributing to inequality in their countries (Figure 4.12; Figure 4.13).

Strategies against policy capture need to go beyond anti-corruption. The complexity and sometimes legal nature of policy capture strategies require measures that go beyond narrow anti-corruption policies and underscore the value of improving inclusiveness and accountability, and of promoting values as a guide beyond formal rules (OECD, 2017d; OECD, 2017e). A strategy against capture therefore requires actions by policy makers that complement and reinforce each other in four key areas:

  • Levelling the playing field: Engaging the participation of stakeholders with different interests ensures an inclusive decision-making process that is more resilient to capture, as it becomes more difficult for one interest group to influence the decisions without triggering resistance by the other groups. Levelling the playing field requires for instance guaranteeing equal access to lobbying opportunities, fair rules on political financing of elections and campaigns, but also including users of public services in an easy manner, like setting water tariffs, into their regulatory process. The Water Industry Commission for Scotland for instance has established a Customer Forum to illicit and input preferences, evidence and feedback into its Strategic Price Review of Water Charges from 2021 to 2027.

  • Enforcing the right to know: To enable an effective participation and stakeholder engagement, and to facilitate social control over decision-making processes, external actors need to have access to relevant and reliable information in an easy and accessible way; for instance information about who has been involved in a public decision-making process, or whether public officials have ties to private firms, e.g. a politician who has worked or has been invited to conferences of the pharmaceutical industry while being involved in decisions related to the health sector.

  • Promoting accountability through competition authorities, regulatory agencies and Supreme Audit Institutions (SAI): External control, as well as competition policies and regulation of markets with market failures are essential for an environment conducive to accountability in both the public and private sector. For instance, ensuring competition can prevent the risk that established firms lobby for market entry barriers to protect their businesses, and independent regulators can prevent firms who are delivering public services from abusing from the monopoly power. It is important to ensure a “culture of independence” in nurtured to drive the appropriate behaviour as explained in the OECD guidance on the broader governance of regulators (OECD, 2017). Also, SAI can externally audit the policies related to SDG 10 and their results, and thereby contribute to hold the government to account. Shielding the responsible agencies themselves from undue influence is crucial, of course, as they are particularly likely to become targets of capture;

  • Applying organisational integrity policies: Decisions that could be captured are taken by individuals acting in an organisational environment; therefore, defining clear standards of conduct, promoting organisational cultures of integrity, and ensuring a sound control and risk management framework provide guidance on how to design organisational resilience to capture. For instance, a clear gift and conflict-of-interest policy can avoid that public officials become trapped in a relationship of reciprocity, where it becomes increasingly difficult to say “no” to those who in the past have invited them to conferences, dinners or sent them bottles of wines.

Figure 4.12. A cycle between inequality and policy capture

Source: OECD Secretariat.

Figure 4.13. Youth see corruption and lack of transparency as key factors of inequality

Note: In response to the question: What are the most important factors contributing to inequality in your country?

Source: World Economic Forum (2017), Global Shapers Survey 2017.


Effective governance of inclusive growth agendas

Creating mechanisms to coordinate policy-decisions across the board

In today’s global interconnectedness, challenges have grown in complexity for national and subnational levels of governments. Governments’ challenges have become multidimensional in their nature and, sometimes, global in their impact. Governments are facing these challenges in an unprecedented context of fiscal stabilisation and in an environment in which trust in government is still below pre-crisis levels (OECD, 2017a). Consequently, traditional sector-based approaches to policy-making are increasingly less effective in improving results including on inclusive growth as they do not reflect strategic considerations from other policy sectors, nor do they incorporate practices and tools to implement integrated responses. As a response, integrated diagnostic tools offer the best support to reform efforts that can respond successfully to today’s multidimensional policy challenges facing governments.

Underpinning these integrated approaches are key enablers including:

  • Political vision, democratic commitment and leadership to define and support the development of long term priorities and policy decisions and to clarify institutional responsibilities across the public sector in support of inclusive growth.

  • Evidence-informed policy-making: to root governance and policy initiatives in practices that worked in similar contexts, though ensuring appropriate set up for evidence take up, and tools such as monitoring and evaluation and strategic foresight, while ensuring that the public agenda and policy priorities are set in an open an inclusive way and following integrity standards.

  • Whole-of-Government co-ordination: to ensure that governments' departments and agencies are working together across silos to achieve a shared goal.

  • Innovation and change management: to incentivize the generation and implementation of new ideas while ensuring that the human and cultural administrative dimensions are being taking into account to guarantee the success and sustainability of reforms.

Screening policies for their inclusiveness impacts: the role of evaluation

Looking at the government process through a gender lens leads to better informed policy-making and more equal outcomes for society. A countries’ ability to promote gender equality relies on their capacity to design policies that can effectively respond to the gender needs of society. A clear example is provided in the case of Iceland, where gender analysis has helped ensure policy outcomes that align with government goals in relation to gender equality. Many tools exist for gender differentiated impact of policies, facilitated through the use of tools such as gender impact assessments, gender budgeting and the collection of gender-disaggregated and gender-sensitive data. The example of Sweden, a country that adopted strategic gender equality and mainstreaming policies tailored to each branch of power – executive, legislative and judicial – is an inspiring example of how gender mainstreaming can become a concrete, whole-of-government commitment and framework of action.

Despite the growing interest and commitment of OECD Member and partner countries, challenges continue to affect the inclusive design, implementation and evaluation of policies and programmes across the board. To be most effective, a gender lens should be applied to each strategic phase of the policy and budget cycles. Most countries which currently engage in gender budgeting report that they do not necessarily apply gender budgeting tools at all the stages of the budgeting process.

High level political commitment, the application of a gender lens to each stage of the spolicy and budgeting cycle mechanisms can help ensure that governments design and deliver policies that lead to more equal outcomes for men and women. Weak systems for accountability and scrutiny in relation to policies and their gender outcomes is still a challenge for effective gendered evaluation of policies. Legislatures have an important role to play both as champions of gender equality and in ensuring effective oversight of government. In 2016, 22 OECD countries had formed parliamentary committees focused on gender equality. However, their existence alone is not sufficient to guarantee more gender sensitive policies and budgets. In Mexico, out of 1523 initiatives discussed in the Congress in the years 2015-2016, only 42 (2.75%) came before the Gender Equality Committee and almost all of them were focused on amendments to the General Law on Women’s Access to Life Free from Violence and the General Law for Equality between Women and Men (OECD, 2017a; OECD, 2016f). This example demonstrates the common pitfall of gender equality committees focussing largely on women-specific policies. To be most effective, these committees should look at how broader policies impact men and women differently (Box 4.3).

Box 4.3. A case study: The use of gender impact assessments to improve policy design in Iceland

In 2015, the budget committee of the Icelandic Parliament proposed a significant modification to a legislative proposal regarding income tax. The proposal aimed to simplify the income tax system through removing the right of higher-income partners to benefit from unused tax credits of lower-income partners. While the committee was initially in favour of preserving the entitlement, the Ministry of Finance and Economic Affairs applied a gender lens to its analysis of the proposal and brought to light that this measure predominantly benefitted men who are the higher-income partner in 75 out of 100 marriages in Iceland. Specifically, the proposal would increase men’s disposable income, increasing the gender income gap, contrary to the goal of economic equality between men and women pursued by Iceland. Thanks to the information from the gender impact assessment of the policy, the initial proposal of the budget committee was amended.

Source: OECD (2016f).

Inclusiveness of all population groups, not just women as homogenous groups, is now at the core of policy-making. A telling illustration is given by the 2030 Agenda, whose overarching objective is “no one left behind”. Its Goals and targets are intended to be universal – applying to all countries, and to all population groups within countries. The 2030 Agenda encourages focusing on the poorest (target 1.1 calls for policies to “eradicate extreme poverty for all people everywhere”) and those in the most vulnerable situations, including children and young people, ethnic minorities, migrants, disabled and other disadvantaged groups based on other relevant characteristics. Some specific goals and targets are explicitly directed towards certain groups, such as target SDG 8.8 on labour rights for migrant workers, or target SDG 11.2 on access to public transport for women, children, persons with disabilities and older persons. In 2015, when world leaders adopted the United Nations Resolution 70/1, “Transforming our world: the 2030 Agenda for Sustainable Development” they therefore emphasised the importance of accessible, timely and disaggregated data.

Box 4.4. Behavioural insights and inclusive growth

Behavioural insights use an evidence-driven, inductive approach to incorporate lessons derived from behavioural and social sciences to improve the design and delivery of public policies. By focusing on how people make decisions in real-world contexts, policies can be shaped to remove biases that restrict good decision making in order to improve well-being and promote equitable, balanced and inclusive growth.

Behavioural insights have been applied to fighting unemployment, facilitating inclusion, and reducing poverty. OECD (2017) notes a strong focus on promoting outcomes for end-users through “nudges” that help overcome cognitive and behavioural biases and through more complex interventions such as “boosting” individual’s skills and knowledge.

For example, the Singapore Workforce Development Agency (WDA), a statutory board of the Ministry of Manpower (MoM) conducted a behavioural experiment to increase the job placement rate for job-seekers in Singapore. The result was a 17% increase in the number of workers finding placements, compared to the control group, which could result in 4 000 more job seekers finding jobs per year if implemented across all WDA career centres in Singapore.

Employment and Social Development Canada (ESDC), the government department responsible for social programmes and the labour market at the federal level, introduced behavioural insights principles into the on-line Job Posting pages to facilitate greater use of on-line platform facilitating better matching between jobs and job-seekers. The different “nudges” that were tested created more uptake and use of the platforms, ranging from 67% to 122% increase in clicks compared to the control group.

The UK Department for Business, Energy, and Industrial Strategy (BEIS) and Behavioural Insights Team (BIT) found that low adult literacy and math skills contribute to ill-health and social exclusion. In a 10-week trial, text message nudges were used to increase attendance by adult learners in school by 7% and decrease drop-out rates by 36%. The Consultative Group to Assist the Poor (CGAP) supported the World Food Programme (WFP) Kenya to assess and provide behavioural remedies to counteract problems with digital cash transfers for food aid. The result was an increase in the number of payments completed using the new debt card-based digital cash transfer scheme one year after the intervention, including 32% using the card more than once a month and 16% more than three times a month.

The Western Cape Government (WCG) Department of Community Safety worked with ideas42 and researchers from the University of Cape Town to identify other, behaviourally-informed solutions to improving safety in South Africa’s low-income communities. A prototype “Safety Tool” app was designed and tested to help young people choose safe weekend and evening activity options, and make plans around those options. The results of the experiment showed that the app had a powerful effect: at the end of the intervention, the treatment population was found to be half as likely to participate in unsafe activities as the control population.

Source: OECD (2017f), Behavioural Insights and Public Policy: Lessons from Around the World, OECD Publishing, Paris.

Leaving no one behind requires the use of disaggregated data in the design, implementation and evaluation of policies. Data based on national averages miss most of the opportunities to identify inclusion challenges. While in most cases survey data can be disaggregated by age, gender and some measure of socio-economic background (e.g. education, occupation or, more rarely, income), comparative evidence on other social markers (e.g. disability, ethnicity, sexual orientation) is sparser. Responding to the demand for better information on inequalities in well-being will require taking steps for improving the breadth and comparability of the available micro-data; and for integrating different data sources to provide a portfolio of statistics joined up via a set of core variables.

New approaches to inclusive growth policies and tools should include behavioural insights. The application of behavioural science in policy making is growing globally with over 130 public bodies institutionalising this approach in policy making (Box 4.4). Behavioural approaches can be instrumental in merging different policy disciplines, open government initiatives and integrity policies for a more “user-centric: approach for inclusive policy making in a number of ways. Firstly, behavioural approaches can be used to identify the needs and perceptions of citizens that reduce or eliminate bias in common stakeholder engagement tools and attract greater citizen participation. For instance, a behaviourally informed chatbot has been used by the Government of Jersey to engage citizens in key policies such as on the environment and tax. The traditional government surveys usually have a response rate of 4%, while the behaviourally informed chatbot has a response rate of over 50%, with repeated participation. Secondly behavioural insights techniques can trial and test interventions before they are implemented to ensure they achieve the policy objective with the actual and not assumed behaviours of the target population. Evaluations that determine the true drivers of behaviour (especially in “hard to reach” target groups) can provide real data and evidence on the problems seeking to be addressed. They can inform decision-makers on the appropriate course of action which may be legislative, regulatory or alternatives, such as making information more salient or structuring national programmes to illicit behavioural incentives for change.

Strengthening accountability

Social accountability plays a key role as it ensures that the voices of people are heard. It is also acknowledged that the role of citizens in policymaking has transformed the relationship between the government and the citizenry and that it is key for governments to enhance citizens’ trust. For instance, the existence of mechanisms such as free, fair and transparent elections, a functioning party system, access to public information as well as the inclusion of a wide range of stakeholders (CSOs, youth, elderly, minorities, people with disabilities) in policy design, and service delivery and more importantly, policy evaluation are key to hold governments accountable. Furthermore, access to justice and legal empowerment are also fundamental to give people the awareness and tools to more effectively participate in open government and consultation initiatives but also shed light on corrupt practices and push for legal and regulatory protection Finally, the role of media and journalism, by acting as watchdogs and as a means to provide information can also be described as being key for accountability in order to ensure that a wide range of individuals irrespective of their race, colour, sex, language, religion, political or other opinion, origin, disability, or sexual orientation can have access to timely and accurate information without discrimination or bias.

Effective scrutiny of government policies and performance by a wide range of stakeholders, including citizens, lies at the heart of democratic accountability. As the budget is the central policy document of government, parliaments need to engineer processes which allow for effective budgetary scrutiny while fostering accountability and fiscal discipline. The legislature must be empowered to independently review the budget and related documents, to debate and influence budget policy, and to hold the government to account. Evidence of the legislature reasserting its budgetary role can be found across the OECD, with legislatures among other things setting up new oversight committees and committee procedures, enlarging budget staff, and demanding improved and more complete budgetary information from government. One particularly striking trend has been the rise of specialised budget research units within parliaments and independent parliamentary budget offices. Legislatures are also taking on new roles which promote increased fiscal responsibility such as approving ex ante fiscal frameworks.

The OECD Recommendation of the Council on Budgetary Governance [C(2015)1] highlights the role of parliament. Forthcoming OECD Best Practices for Parliamentary Budgeting seek to underpin these broad principles and to provide guidance on how legislatures can most effectively engage across the budget cycle, promoting legislatures that are both empowered and fiscally responsible. The Recommendation states that the “national parliament has a fundamental role in authorising budget decisions and in holding government to account” and that countries should: “provide for and inclusive, participative and realistic debate on budgetary choices by offering opportunities for the parliament and its committees to engage with the budget process at all key stages of the budget cycle, both ex ante and ex post as appropriate.” The Recommendation also highlights the role of parliaments in ensuring that performance, evaluation and value for money are taken into account in the budget process (8.a). OECD legislatures have moved from a mainly financial focus in budget scrutiny to increasingly integrating performance information in budgetary discussions (OECD, 2015c).

As a representative and deliberative body, the legislature provides a forum to debate different viewpoints from across society. Committee hearings are among the traditional processes that allow for the legislature to hear from a range of stakeholders. Legislatures are also seeking more modern methods to encourage public participation and collect evidence from more diverse audiences, such as, crowdsourcing platforms, video interviews, web-chats and surveys, focus groups and other events.

Independent fiscal institutions (IFIs) or other structured, institutional processes support the credibility of budgeting. The credibility of national budgeting – including the professional objectivity of economic forecasting, adherence to fiscal rules, longer-term sustainability and handling of fiscal risks – can be supported by independent fiscal institutions (IFIs) or other structured, institutional processes for allowing impartial scrutiny of, and input to, government budgeting. Diverse examples of IFIs have existed for decades (e.g. Belgium, 1936, the Netherlands, 1945, Denmark, 1962, Austria, 1970 and the United States, 1974). The Recommendation of the Council on Principles for Independent Fiscal Institutions aims to assist countries to design an enabling environment conducive to the good performance of an IFI and to ensuring its long-run viability. The experience of countries with more long-standing institutions shows that – even if government’s do not always agree with IFIs’ analysis – these institutions are important partners for finance ministries and legislative budget committees in promoting credible fiscal policies (OECD, 2014).

Improving transparency and integrity of the policy-making process is important, recognising its importance for informed decision-making but curbing the risk of undue influence and unfair competition. Remedies to secure unbiased and inclusive policy-making include increasing transparency and integrity in lobbying and better managing conflict of interest. Regulation can be used to address concerns that lobbying has been high on many governments’ agendas including lobbying registry, code of conduct and public employment regulation. The Recommendation of the Council on Transparency and Integrity in Lobbying [C(2010)16]called on countries to introduce regulations to increase transparency in the interaction between public officials and lobbyists thus reducing policy capture. In addition, institutional measures such as external audit and verification are critical in this regard alongside asset and private interest disclosure by public officials. Options are also available for regulating political finance on a context specific basis, including by promoting the use of online technologies for greater transparency and scrutiny, allocating sufficient human and financial resources to the electoral monitoring bodies and mapping potential integrity and compliance risks.

Governments are increasingly implementing open government initiatives that promote inclusiveness - such as digital government, access to information, budget transparency, openness and accessibility as well as citizen participation in service delivery including youth and disadvantaged groups in policy making, inclusive and participatory budgeting or initiatives on gender equality. These initiatives not only allow for governments to have a clear understanding of a wide range of citizens’ needs and demands, allowing better targeted and defined public policies and, thus reducing inequalities in society, but also, provide the tools and avenues from citizens to hold government accountable. An open government approach can increase the interaction between governments and their citizenry and ensure accountability. Improving the accountability of the public sector was the second main objective of all countries when implementing open government strategies and initiatives and the most important for countries such as France, Iceland and Israel (Figure 4.14Figure 4.14).

Figure 4.14. Initiatives on open government being or been implemented

Source: OECD (2016b), Open Government: The Global Context and the Way Forward.


government initiatives and implementing them at sector level. For instance, a lack of incentive among government institutions to co-ordinate and insufficient financial and human resources are among the most frequently cited challenges for institutions responsible for horizontal co-ordination of open government strategies and initiatives (Figure 4.15).

At the sectoral level, similar concerns have been raised. In OECD countries, 63% of the Ministries of Health and 41% of the Ministries of Finance claimed that lack of or insufficient financial resources as one of the five main challenges in successfully implementing initiatives on open government at the sector level (Figure 4.16). The lack of financial resources negatively impacts the proper implementation of these initiatives at the national and sector level and might jeopardise the success of the overall open government strategy. Not fully implemented, they can be negatively perceived by citizens leading them to trust less on government actions.

Figure 4.15. Main challenges indicated by countries to co-ordinate open government initiatives

Note: Countries were asked to name their main three challenges in co-ordinating open government initiatives. This figure shows only the number one challenge that countries listed.

Source: OECD (2016b), Open Government: The Global Context and the Way Forward.


Figure 4.16. Challenges to implement open government at the sector level

Note: Ministry of Finance n=37 countries (30 OECD countries), Ministry of Health n=32 countries (25 OECD countries). Japan's Ministry of Finance did not provide an answer to this question.

Source: OECD (2016), Open Government: The Global Context and the Way Forward, OECD Publishing, Paris.


Open government initiatives need to be implemented to allow countries to fully reap the benefits of the open government towards effective public governance and to achieve increased accountability and inclusive growth. One way to ensure a proper implementation is to acknowledge the challenges faced when co-ordinating open Managing multi-level governance and decentralisation

A whole-of-government approach at the central government level will have greater potential impact on inclusion if all levels of government are on board. Many of the policies that have significant impact on Inclusive Growth are managed at least in part by subnational governments. Across the OECD, 137 thousands of subnational governments are responsible for around 63% of public staff spending, 49% of public procurement, 59% of public investment and 40% of total government expenditures. Responsibilities related to inclusion (i.e. education, social protection, health, housing and community amenities) account for almost 60% of subnational government expenditure on average in the OECD. Increasing decentralisation trends across OECD countries lead to increased emphasis on the need for sound multi-level governance arrangements.

For the last two decades, many OECD countries have experienced growing decentralisation trends strengthening the decision power of regions and local governments, the tiers closer to citizens. The Regional Authority Index (RAI), which is the most comprehensive measure of the real degree of power of subnational governments, shows that 52 out of 81 countries around the world have experienced a net increase in decentralisation (Hooghe et al., 2016). Decentralisation has increased through two main channels: the reinforcement of local autonomy as well as the strengthening of existing or new regions. This trend has touched all unitary and federal countries which no longer have substantive differences in terms of their degree of decentralised spending or tax autonomy (OECD, 2017g; OECD, 2013a).

There is no single model of decentralisation that is most conducive to Inclusive Growth. The OECD works extensively on the pre-conditions needed to make decentralisation work, notably the need to adapt institutions to places (OECD, 2015). This may imply a need for “asymmetric decentralisation”. Asymmetric structures can arouse controversy –uniformity is often easier to defend on equity grounds– but when power and other resources are unevenly distributed, asymmetric approaches may result in more inclusive politics and give voice to those who previously felt marginalised (OECD, 2015). Asymmetric decentralisation has received growing attention from several countries confronted with severe disparities in local capacities and various territorial, political or international cultural contexts. The results of such asymmetric treatments are difficult to assess since they can improve or worsen the efficiency and effectiveness of the public sector as a whole. Asymmetric responsibilities may strengthen or weaken the allegiance of differentially treated communities to the nation state as a whole (OECD, 2017g; OECD, 2013a). However, the results of this process are context-dependent. Countries need to assess carefully the challenges and the potential gains and costs that such a process can drive; which responsibilities and how can they be devolved are crucial questions that need to be addressed to improve the efficiency and effectiveness of the public sector as a whole (OECD, 2018).

OECD countries are increasingly experiencing asymmetric decentralisation arrangements. Subnational governments have differentiated responsibilities that can vary by capacities, population or characteristics like ethnicity, identity or geographic characteristics. Asymmetric arrangements have been particularly used to address urban challenges; around two-thirds of metropolitan areas in the OECD now have a metropolitan governance body (OECD Metropolitan Governance Survey, 2014). With these, countries are responding to metropolitan challenges that have a direct impact on local well-being by, for instance, improving the governance of transport or environmental policies.

Decentralisation reforms can be beneficial to productivity growth and inclusion but their ultimate effect depends on the broader policy environment. Decentralisation reforms have been implemented for a wide variety of reasons, among them, the need to improve the efficiency and quality of public services and to enhance regional and local productivity and growth. Some evidence suggests indeed that decentralisation and growth are positively correlated (OECD/UCLG, 2016). For example, a 10 percentage point increase in the subnational tax revenue share is associated with approximately 2% higher GDP per capita in the long run. At the same time, decentralisation is associated with somewhat higher inequality (OECD Decentralisation and Inclusive Growth, 2018). Overall, the effect of decentralisation on growth depends on the broader policy environment and the quality of the institutional framework within which subnational governments operate. The OECD has developed a list of guidelines that help make decentralisation work, based on practical experience from countries OECD Decentralisation and Inclusive Growth, 2018.

Multi-level governance mechanisms that reshape and improve interaction between public authorities can ensure coherent and effective policy decisions. Appropriate multi-level governance arrangements can make decentralisation sustainable by strengthening the institutional capacity of subnational bodies and enhancing policy dialogue and co-ordination between levels of governments (Allain-Dupré, 2018). Platforms for vertical co-ordination have been established in several OECD Member states, in particular federal countries: 28 countries in the OECD have put in place some structures of co-ordination. Often these structures are related to environment, infrastructure, transport, technology, and development. Despite their expense and the time needed to establish them, standing commissions and intergovernmental consultation boards that create a permanent conduit for co-operation and communication across parties and levels of government can facilitate reform when the time comes. Creating a culture of co-operation and regular communication is crucial to effective multi-level governance and long-term reform success.


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