Chapter 1. Focus - Fit for the future: Strengthening government resilience

OECD governments have responded at unprecedented scale and speed to the COVID-19 crisis. The pandemic, and the economic and social effects of the measures to contain it, are the largest shock most OECD countries have experienced since the Second World War. They have been required to implement policy and operational responses of unprecedented scale, speed and scope to contain the pandemic. Health care systems have had to be extensively scaled up to treat the ill. Efforts to slow transmission rates have required restrictions on civic freedoms and economic activities on a scale rarely seen in democratic states in peacetime. The restrictions on economic activity have generated major disruption to incomes and employment, requiring governments to provide massive fiscal support for citizens and businesses.

The response to the COVID-19 shock has been an exceptional test of government capabilities. Governments have been front and centre in keeping economies and societies afloat. They have had to make difficult policy decisions quickly, and develop new analysis and co-ordination mechanisms to enable this. They have implemented major surges in health, social protection and other areas, providing a test for budgeting, public employment, procurement, regulation, digital and infrastructure systems. They have devised new models of public communication to implement evolving public health measures. They have also had to instantly redesign large areas of their operations to work remotely. This has all had to be delivered while meeting expectations that the maximum levels of transparency, accountability, oversight and integrity possible should be maintained.

Economies and societies will continue to face substantial risks of major shocks even once COVID-19 recedes. Governments will need to be resilient enough to absorb these shocks and develop policies that strengthen societies’ ability to face them. They will also need to rebuild their buffers. While many uncertainties remain about the future course of the pandemic, vaccines are expected to reduce the public health impacts of COVID-19 during 2021 and beyond (Cohen, 2021[1]). The OECD forecasts global gross domestic product (GDP) growth of 5.8% in 2021, with world output expected to exceed pre-pandemic levels before end-2021 (OECD, 2021[2]). Governments and societies will have the opportunity to begin recovering, restoring freedoms and rebuilding prosperity. However, the route out of the crisis may not be straightforward. The potential impacts of COVID-19 variants are not fully known. Even once COVID-19 itself is contained, its effects will have ramifications into the future including through additional public and private debt, lost education and schooling, lost businesses and jobs, and the unequal impact COVID-19 has had across society. Trust in government may be at risk of further damage from real or perceived mismanagement, reduced transparency in decision making and possible new corruption scandals.

Moreover, societies will continue to face a range of other shocks even once COVID-19 is contained. In particular, the climate and biodiversity emergency presents urgent and potentially severe risks. Global warming is likely to reach 1.5°C between 2030 and 2052 if it continues to increase at the current rate (IPCC, 2018[3]). Climate-related risks to health, livelihoods, food security, water supplies, human security and economic growth are projected to increase if global warming reaches 1.5°C, and worsen with higher levels. Climate action failure, extreme weather, biodiversity loss, natural disasters, human-made environmental disasters and water crises are all potential sources of shocks. Other risks such as debt and unemployment crises, cyber-security and IT failures, and terrorist attacks also remain. The after effects of COVID-19 may weaken government resilience to future shocks.

Outcomes will depend on how well governments drive recovery and safeguard against future shocks and stresses. Given the range of potential shocks, many paths into the future are possible from this juncture. Some paths would see a return to prosperity within vibrant democratic frameworks. Others could lead to stagnating growth, entrenched inequality and even risks to the sustainability of the democratic model of governance.

It is critical that governments proactively strengthen their resilience to future risks. They must also aim to have governance systems in place to devise and implement policies that strengthen societies’ resilience in the COVID-19 and post-COVID environment. They must safeguard citizens, build and maintain public trust, and support the healthy functioning of democratic systems, which are key to societies’ capacity to absorb shocks. The OECD’s definition of resilience is “the capacity of systems to absorb a disturbance, recover from disruptions and adapt to changing conditions while retaining essentially the same function as prior to the disruptive shock” (OECD, 2019[4]), (OECD, 2014[5]). Figure 1.1 gives a graphical depiction of this concept of resilience, as a four-stage process, extending both before and after a disruption. The first stage is planning in advance of any disruption, in which strategies are sought to preserve a system’s core function in the face of shocks, and threats to the system are sought. The second stage, during the disruption, is absorption, in which activities intended to minimise the scale and length of its impact are carried out. The third is recovery, which includes efforts to regain lost system function as quickly, cheaply and efficiently as possible. The fourth is adaptation, which involves learning from the absorption and recovery stages, and working to change how the system functions, in order to better deal with future threats (Linkov, Trump and Hynes, 2019[6]).

This chapter applies the concept of resilience to government. Ideally, governments work by acquiring inputs (employees and funds, and also assets and infrastructure, and data and information1), and then combining and transforming these inputs through a set of processes (policy making, budgeting, regulation, procurement, human resource management, open and digital government, etc.) to produce public goods and services for citizens (health, education, security, efficient markets, etc). A resilient government is one which can face a wide range of disturbances that affect the availability of its inputs or the functioning of its processes, but can continue to deliver similar services and outcomes for citizens immediately after the disturbance, and then recover and adapt such that it minimises the impacts of future disturbances.2 Resilience is likely to be a matter of degree, rather than a binary quality. Moreover, it may vary in the face of differing types of shocks, or for different areas of government.

This concept of government resilience matches the types of questions citizens naturally ask about their government. To understand it, consider a government which faces some shock, such as an earthquake or a recession. To assess their government’s resilience, citizens might ask: does it have the people, funding, assets and knowledge to limit the suffering of citizens in the immediate aftermath? Does it have the processes in place to react quickly? If some functions and capabilities are degraded, can it find new ways to deliver? Does the government support recovery after the immediate crisis? Can the government adapt, by learning lessons and reacting better to future shocks and disasters?

Unfortunately, not all future threats can be fully foreseen and planned for. The world contains a range of complex, interconnected and interdependent systems (financial, environmental, governmental, etc.). Disturbances and changes in one system can quickly affect others through a variety of connections, both known and unexpected, in unforeseen ways. In some cases, such as COVID-19, small initial changes can have rapid, outsized effects. In the worst case, this combination of interconnectivity and unpredictability can lead to rapid, cascading, multiple failures (Hynes et al., 2020[7]). To manage in this complex, interconnected and risky world, governments must ensure they are as resilient as possible, and can safeguard citizen wellbeing and public trust in the face of future crises. Ultimately, resilience is thus key to supporting resilient societies and healthy democratic systems.

This chapter examines how governments have coped with the exceptional real-life stress test of COVID-19, and identifies key lessons on how they can improve their resilience. The overarching recommendation is that they must safeguard their ability to respond to crises at speed and scale, but do so without risking trust and transparency. Section 1.2 examines government resilience in OECD countries, using emerging evidence and information on how governments have absorbed the impact of COVID-19. OECD governments have drawn on reserves of funds, people, skills and infrastructure to scale up delivery in key sectors such as health and social protection. They have also innovated rapidly and adapted processes in policy making, procurement, regulation and communication to meet the needs of the crisis. However, they were imperfectly prepared. In some cases, innovation has resulted from a lack of advance planning or a need to fix suboptimal systems. Moreover, evidence suggests standards of transparency, consultation, oversight and/or control have been partially suspended to better support speed in many aspects of the COVID-19 response.

Building on this evidence, Section 1.3 presents a two-pillar agenda for strengthening government resilience as countries recover from the COVID-19 crisis and adapt for the future. The first pillar consists of internal reforms to government systems, to improve governments’ ability to mitigate future threats, and respond at scale and speed when needed. Key reform areas are optimising the use of recovery packages, building buffers into government operations, supporting anticipatory innovation and problem solving skills, and ensuring integrity and oversight. The second pillar consists of outward-looking reforms to support trust and transparency in government and better support the healthy functioning of democratic systems. Key reform areas are improving representation and interest aggregation, ensuring fairness and inclusion in policy making, and tackling mis- and disinformation. The chapter focuses on central government, that is, ministries and organisations with a national role and responsibilities. It does not cover parliaments and elected bodies, local government or the judiciary.

The COVID-19 crisis has been an extreme stress test of government resilience. This provides an opportunity for unusually direct insights into the resilience of different aspects of government. Although it is unclear which stage of the “plan-absorb-recover-adapt” cycle the pandemic has reached, it is likely that the worst impact of the “absorb” period is passing in many countries as vaccination progresses. This section therefore looks backward to examine emerging evidence on the “mitigate” and “absorb” aspects of government resilience to shocks, i.e. the extent to which governments, in the face of COVID-19 disruption, have demonstrated the ability to manage their inputs and alter their processes to minimise the scale and length of the shock.

OECD governments took unprecedented action in 2020 to help their citizens and economies to absorb the cascading impacts of the COVID-19 crisis. At the onset of the crisis, early modelling suggested that without measures to slow its transmission, the growth of the virus would quickly outstrip governments’ ability to provide health care (Ferguson et al., 2020[8]; Rice et al., 2020[9]). To contain the spread of the virus, governments rapidly implemented “lockdowns” between February and April 2020 (Figure 1.2). These involved unprecedented peacetime restrictions on civil liberties, alongside previously unthinkable disruptions to economic life, including bans on public events and gatherings, closures of schools and workplaces, and broad stay-at-home orders. During March and April 2020, almost all OECD countries set up income support schemes for workers’ whose places of employment were closed, as well as large-scale packages to support firms. Additional public health measures were put in place slightly more slowly. By June 2020, most OECD countries had contact tracing systems (Figure 1.3). There was some loosening of lockdown restrictions during the second and third quarters of 2020, but in many OECD countries, measures were scaled up again in the latter part of the year in response to rising infections. As of mid-May 2021, lockdown measures were somewhat less intense than during the initial months of the crisis, and slowly loosening. OECD governments were continuing to provide widespread economic support.

Delivering these responses has been highly challenging for governments. They have had to make choices fast, and then immediately deliver large, complex and novel policies and programmes, while maintaining as far as possible controls, transparency and accountability mechanisms. Moreover, these responses have had to be delivered in the face of major disruptions to normal government inputs and processes. Most visibly, this includes the closure of government offices and the need to redesign most aspects of government to work remotely.

This section examines how well different government systems have absorbed the impacts of COVID-19. By examining emerging evidence, data and observation on how COVID-19 responses were delivered, it draws initial conclusions about areas of resilience or vulnerability. COVID-19 has affected various OECD countries differently, and each government has adopted its own approach. The analysis and findings that follow will not be true for every government, and the areas of resilience or vulnerability experienced will differ in each country. Nonetheless, trends and common experiences are readily apparent when governments’ responses during COVID-19 are compared. Two trends in particular emerge repeatedly across the evidence on how governments have absorbed the shock of COVID-19.

First, governments have emphasised speed and scale in their COVID-19 response, but often in ways that pose risks for transparency and trust to an unnecessary extent. This is largely due to imperfect preparedness. Governments have drawn down on their buffers and spare capacity to provide the raw inputs for their COVID-19 response (e.g. infrastructure, workforces, public funds). Government processes have then turned these inputs into the outputs citizens needed, often at speed and at scale. In each of the processes examined below, the evidence presented indicates that governments have innovated and altered their processes rapidly to deliver COVID-19 responses. However, in several cases, the evidence also indicates that governments have lowered standards of consultation, transparency, oversight and/or control to improve the scale and speed of their response. This is apparent to differing degrees in policy making, regulation, public finances and procurement. Some alleviation of standards is inevitable during emergency responses, but it is not always clear that these have been limited in time and scope and planned in advance, nor that governments have clear plans for a return to normal, and/or are applying ex post controls such as evaluations. This increases the risks of suboptimal government delivery, either because of poor design or because of capture by special interests or corruption. This may create risks for public trust in government.

Fundamentally, the scale of innovation and change required to respond to COVID-19 partly reflects imperfect preparedness. Crises cannot be perfectly predicted, and the ability to innovate and manage them as they occur is essential to government resilience. Some aspects of the response discussed below highlight the flexibility, agility and capability of public agencies in the face of a crisis which could not be perfectly foreseen. However, some of the innovations used to tackle COVID-19 could have been undertaken in advance. As described below, several of the issues which have hampered the COVID-19 response, such as the need for better integration of digital systems or improved procurement information, were apparent in many countries before the crisis. In many cases, the wider value of some of the innovations forced on governments during COVID-19 is shown by their plans to retain them in the longer term. Moreover, the evidence below also suggests that many governments had not planned how to manage consultation, transparency, oversight and/or control processes in an emergency. This has forced rapid and sometimes ad hoc changes, creating risks for integrity, transparency and trust. Observational evidence suggests that where innovation and preparation was more advanced prior to COVID-19, such as in public communication and remote working infrastructure, the shock has been less disruptive.

Second, digital technology has been critical to supporting resilience across a wide range of government inputs and processes. Digital technology means that flows of information between government staff, and between government and citizens, do not need to take place in a specific physical location. In the context of COVID-19, this minimises the need for government operations to take place in-person, helping to suppress virus transmission. The following section repeatedly notes governments replacing physical infrastructure with digital technology in their processes. More broadly, digital technology improves resilience by increasing the speed and breadth of information flows, increasing inputs of information in government processes. There are several examples below of governments using digital technology to improve the information used in a wide range of processes and aspects of their response. Emerging evidence suggests governments with better digital systems pre-crisis have often performed better in absorbing the impact of COVID-19.

Crisis management is a core government competence. Nearly all OECD countries have experienced one or more major crises within the past 20 years for which they were not adequately prepared (OECD, 2018[12]). Several entailed previously unidentified risks (e.g. the 2010 North Atlantic volcanic ash cloud), or risks of unexpected magnitude or complexity (e.g. the 2011 Great East Japan Earthquake). Similar to the COVID-19 crisis, these events led to decisions to suspend critical infrastructure networks, in ways that disrupted economic activity and affected entire populations. The OECD has issued formal recommendations on how governments should adapt the institutional organisation of crisis management (OECD, 2014[13]).

At the outset of the pandemic, few OECD countries had structured capacity to gather scientific advice about how governments should adapt to novel and complex crises. Some of the systems created since have raised transparency concerns. In 2018, only half of OECD countries had a specific government department or institution whose purpose was to identify novel, unforeseen or complex crises (OECD, 2018[12]). Most countries where data are available lacked formal institutional mechanisms at the national level that were clearly identified as having a role in co-ordinating scientific advice during crises. Very few countries had permanently established scientific advisory mechanisms, that is, standing bodies responsible for the provision and co-ordination of scientific advice in the management of novel and unexpected crises. One such body is the UK Scientific Advisory Group for Emergencies (SAGE), which is responsible for ensuring that timely and co-ordinated scientific advice is made available to decision makers. Who participates in SAGE meetings depends on the nature of the emergency and the issues under consideration, and members are drawn from government, academia and the private sector (UK Government, 2021[14]). A further issue is that, for pandemics in particular, the scientific data and information needed as evidence to support rapid decision making was frequently distributed across different public agencies and academic institutions. There were different sources of competing advice, and the protocols and frameworks that existed were not necessarily easily applied across all these sources (OECD, 2018[15]).

Ensuring the transparency and integrity of special advisory bodies, such as scientific committees, is important for their effectiveness and public trust (OECD, 2014[16]). In the aftermath of the 2009 “swine flu” pandemic, scientific and public debates prompted accusations of commercial bias and that governments and public institutions were misled into stockpiling a drug with limited efficacy. An analysis of how the Danish group of experts developed the plan to tackle the pandemic showed that they were lobbied by the industry both directly and more subtly (Vilhelmsson and Mulinari, 2017[17]). Recent investigations have shown that following reports of shortages in the United Kingdom, Spain, the Netherlands and Poland, the EU purchased and stockpiled a significant quantity of antivirals, despite limited evidence of their effectiveness (Hordijk and Patnaik, 2020[18]).

Many countries put in place ad hoc institutional arrangements to gather scientific advice as the COVID-19 crisis developed. A key challenge has been ensuring proper governance of evidence, such that policy makers and the public can trust that government is receiving clear, neutral and credible scientific advice. From the available information, a minority of countries have set up formal processes (such as peer reviews) to ensure the quality, authority and legitimacy of scientific advice. Many countries have controlled the nature and quantity of information released to the public, with legitimate questions being asked on the governance of the scientific advice leading to decisions, and the transparency of this decision-making system. Members of scientific task forces have seldom been obliged to disclose potential conflicts of interest (OECD, 2021[19]). It is likely that issues with the governance of scientific advice stem at least partly from gaps in crisis preparedness.

Governments which locked in lessons from similar crises, and drew on partnerships, have often been more resilient to COVID-19. The OECD Recommendation on the Governance of Critical Risks (OECD, 2014[13]) recommends that countries develop the institutional capacity to learn from past crises, enact reforms to address the operational gaps they revealed and test to ensure these capabilities will function when needed. Korea’s response to COVID-19 demonstrate the value of this institutional capacity. After the 2015 MERS coronavirus outbreak in Korea, the government made 48 reforms to boost public health emergency preparedness. These included guidelines for screening facilities, comprehensive testing and contact tracing, and supporting people in quarantine to make compliance easier (Kim et al., 2021[20]). These systems have helped to quickly contain the spread of COVID-19, and allowed economic and social activities to resume earlier than in many other OECD countries.

Governments which have been able to draw on volunteers have found them an important additional human resources in crisis response. In large-scale and complex crises, government employees cannot necessarily manage alone. Developing trusted partnerships with the private sector, civil society and volunteer organisations with operational capacities to contribute to crisis management is key (OECD, 2015[21]). During the COVID-19 pandemic, many OECD countries organised volunteer initiatives to provide rapid surge capacity support. These were often in community resilience functions, including staffing vaccine distribution sites and delivering food and medicine to people in isolation. For example, Israel leveraged a cadre of over 10 000 volunteers to support the collection of test samples and call centre operations (Kim, 2020[22]). Volunteers also provided important logistical support in Israel’s vaccine rollout, which has been by far the fastest in the world in terms of the share of population receiving a first dose.

Central government institutions had to rapidly redesign processes for decision making and cross-government policy co-ordination during 2020, as pre-existing structures were not always fit for addressing the multidimensional impacts of the COVID-19 crisis. The OECD defines the centre of government (CoG) as the body or group of bodies that provide direct support and advice to heads of government and the council of ministers, or cabinet. CoGs have played an important role throughout the crisis in strategic planning, cross-government co-ordination and stakeholder engagement in policy making. COVID-19 has created an unprecedented need for timely data and information, and new policy co-ordination challenges for governments. It has required CoGs to access and analyse vast quantities of complex data and information in order to inform decision making and prioritise action – see Chapter 4 and also OECD (2020[23]). The cascading nature of the crisis has required policy to continuously evolve in response to new information about its health, economic and social impact.

At the outset, CoGs faced a range of challenges to the effective co-ordination of policy responses across government. The most common included the lack of appropriate laws and regulations to allow the government enough flexibility to respond to the crisis, and the lack of appropriate structures to co-ordinate responses. Many governments also faced gaps and/or overlaps between the roles of different institutions rolling out emergency responses, competing priorities between institutions, and a lack of protocols and structures to obtain and review expert and scientific evidence (OECD, 2021[19]).

To improve their decision-making processes and co-ordination, most OECD countries adapted the capacities and/or responsibilities of their CoGs (Figure 1.4). Among the 26 OECD countries for which data are available, 77% of CoGs supported more cross-ministerial co-ordination activities and 73% involved more stakeholders in co-ordination meetings. Just under half (46%) gained increased responsibilities or set up a new COVID-19 unit or co-ordinator. However, in most cases these increased responsibilities did not come with additional resources. Only 27% of CoGs had a change in the financial resources available to them, and only 23% a change in staffing levels. This created significant pressure to deliver an expanded set of priorities with the same resources.

Governments evolved and innovated in their cross-government co-ordination mechanisms during the crisis. Box 1.1 gives a number of examples. Countries have commonly developed complementary approaches to traditional emergency management procedures, led or supported by the centre of government. Almost half of OECD governments deployed new institutional arrangements to manage the pandemic, either in the form of a dedicated unit or an appointed co-ordinator. There is also some evidence of government departments that had previously worked in silos coming together to take more effective and rapid decisions (OECD, 2020[23]).

While objective data on the effectiveness of these changes are not yet available, many governments expect to retain the changes they have made to the functioning of their CoG during the planning of the recovery period (Figure 1.4). Co-ordination is likely to remain an issue due to the complexity of delivering recovery plans. Among OECD countries for which data are available, most governments expect to continue having more stakeholders participating in meetings called by the CoG. Many countries also expect to continue with increased cross-ministerial and inter-governmental co-ordination, and new or increased responsibilities for the CoG. From a resilience and complex risks management perspective, governments should reflect on the scale of innovation which was required, and how they could improve resilience by developing more responsive policy-making structures with more co-ordination and fewer institutional barriers. Chapter 4 presents more details on CoGs.

Active engagement of external stakeholders in policy making has often been limited during COVID-19, potentially reducing the quality of policy design and citizen trust. Although 73% of CoGs increased the number of stakeholders joining co-ordination meetings, there are no data on the extent to which groups other than scientific experts were involved. Most (77%) consulted stakeholders on the design of COVID-19 response strategies, but only 35% actively involved stakeholders in their design (OECD, 2021[19]). Among government initiatives to publish data on COVID-19 and responses, 77% are primarily for situational awareness. There is limited evidence that open government data initiatives drove concrete action beyond public communication efforts during the COVID-19 pandemic (OECD, 2021[24]). The potentially limited scope of external consultation may be due to governments prioritising speed over transparency and oversight. COVID-19 has been a fast-moving crisis, and speedy decision making is a legitimate and important goal for governments. Nonetheless, imbalances in democratic engagement can damage long-term resilience by affecting both policy quality and public trust.

The OECD COVID-19 Innovative Response Tracker (OECD, 2020[25]) has identified multiple examples where public consultation has been able to effectively and rapidly bring in expertise and design solutions, even in a crisis. Often these have been enabled by digital technology. A number of countries ran “hackathons” in the early stage of the crisis, and some demonstrated quick results. In Latvia, this resulted in methods to quickly produce face shields at scale to supply Latvian hospitals (OECD, 2020[26]). In Estonia, this contributed to building a digital solution for monitoring personal protective equipment (PPE) stocks and demand (OECD, 2020[27]). In Colombia, the City of Bogota worked with scientists, transport and public health experts to design transport solutions during the early stages of the crisis (OECD, forthcoming[28]).

In some cases, deficiencies in governments’ ability to manage and share data hampered their responses to COVID-19. The crisis has underlined that data and information are critical inputs to effective government. The effectiveness with which governments use information technology (IT) in analysis, decision making and delivery varies. In 2020, a cross-country OECD study of digital government practices concluded that “progress towards a comprehensive and dedicated approach that addresses data as a strategic asset seems to be lacking” (OECD, 2020[29]). It found just over half of countries had a public sector organisation responsible for leading or co-ordinating the implementation of data policies. However, only one-third had established dedicated roles for this purpose (e.g. a national chief data officer), and as reported in Chapter 9, most countries did not have a single exhaustive data inventory for the central government. Around a fifth of countries continued to rely on ad hoc agreements for data sharing between public agencies.

There is no comprehensive evidence on the effect of shortcomings in data sharing on the ability of governments to absorb the COVID-19 shock. However, 46% of CoGs developed new protocols to support better data sharing regarding COVID-19. Some examples show issues with data generation, access and sharing within governments has hampered delivery for citizens. For example, more rapid and co-ordinated delivery of health services and vaccination bookings have been possible in countries with basic data registers and other public sector data sources (e.g. pension systems, health records). In countries lacking such systems, population register numbers are instead being used as identifiers for citizens to book vaccinations (OECD, forthcoming[28]). This underlines the need to develop coherent data governance frameworks for secure and streamlined data access.

OECD governments drew on their fiscal buffers, mobilising massive amounts of public funds to help manage the health and economic impacts of the crisis. The ability to do this has been a key element of resilience. All OECD governments provided discretionary budgetary responses, to support to households and/or firms adversely affected by restrictions on economic activity and to increase provision of health services (Figure 1.5). The initial set of emergency fiscal packages announced in 2020 included a mix of public expenditure and tax measures, combined with balance sheet items including government loans, guarantees and equity injections (Box 1.2). The composition and scale of support varied substantially, possibly reflecting differences in the scale of the shock, the sectors worst affected and what governments could afford. In countries including Germany, Italy and Japan, fiscal support was primarily provided in the form of liquidity support for businesses. Channels included equity injections, loans, asset purchases, debt assumptions and guarantees. Fiscal support implemented or planned among OECD countries comes to around 16.4% of GDP via additional spending or foregone revenues and 10.5% of GDP via balance sheet measures (also referred to as “liquidity support measures”, these include equity injections, loans, asset purchase or debt assumptions, and contingent liabilities).

These budgetary measures required co-ordinated responses across levels of government. Regional and municipal governments deliver public services in many OECD countries, and were affected by both increased demand for services and lower revenues from COVID-19 restrictions. In Australia, the national government negotiated agreements to reimburse state and territory governments for the additional cost of health care services due to COVID-19. In Spain, the government enabled municipalities to use funds from the 2019 budget surplus for social services and provided financial transfers to autonomous communities for health, social and emergency services (OECD, 2020[30])

While no performance information is yet available for most fiscal responses, low take-up rates of balance sheet measures may suggest that their design was not optimal. According to preliminary estimates by the OECD, although the size of these announced balance sheet measures was large, actual spending was more modest, due to low take up, particularly in some European countries. For example, as of December 2020, take up of loans under government guarantee schemes was less than 10% of the scheme size in Australia, Canada, and Germany (Figure 1.6). The significant gaps between the stated size of these schemes and their actual take up are partly due to varying financing needs across countries and a greater use of other policy measures, but also conditions associated with the scheme and operational bottlenecks (Falagiarda, Prapiestis and Rancoita, 2020[33]). In order to avoid similar discrepancies between announced recovery plans and their implementation, governments will need to strike the right balance right between planning, design and delivery modalities, and establishing appropriate monitoring and evaluation to adjust course when needed.

Independent fiscal institutions, such as fiscal councils, played an important role supporting transparency and accountability in budgeting. In some cases, this included functions that would more typically be performed by parliaments. In many OECD countries, parliaments were temporarily suspended at the onset of the pandemic, just as governments were rapidly mobilising their responses to combat the spread of COVID-19. During this period, independent fiscal institutions performed many roles, including monitoring the activation of escape clauses relating to fiscal rules, costing emergency legislation, providing rapid analysis of the potential impact of budgetary responses to the pandemic, and promoting transparency and accountability for the emergency procedures that were available to governments and legislatures during the pandemic (OECD, 2020[35]). In Germany, the Independent Advisory Board to the Stability Council provided a statement on compliance with the structural budget deficit limit. In the United States, the Congressional Budget Office prepared estimates of the cost of legislative bills. In Austria and Canada, rapid analyses were published by the Fiscal Advisory Council and Parliamentary Budget Officer respectively. In Ireland, the Parliamentary Budget Office published briefs on emergency legislation to support transparency while a caretaker government was in place. Budgeting issues are explored further in Chapter 5.

Governments substantially increased public employment, and drew on reserves of skills and motivation among existing staff to manage the crisis. Across the public sector as a whole (i.e. the civil service and wider public sector employment), public sector organisations had to meet significant spikes in demand for services. This was done both by re-assigning staff and hiring large numbers of new staff for areas of emerging priority, especially health care, social services and employment services. In some cases, like contact tracing, large numbers of new and/or temporary staff were needed.

Public services reacted flexibly and innovatively to source and induct staff. Figure 1.7 shows the approaches they developed and used. To reallocate existing staff, 29 out of 37 OECD countries used temporary reallocation of staff within their current ministry, and 25 reallocated staff across ministries and agencies, often using a central human resources (HR) authority to manage this. To hire new employees, 25 OECD countries responded to crisis needs by accelerating their hiring processes, 21 simplified their hiring processes, and 17 used new online tools to facilitate hiring. Once hired, 26 countries used online on-boarding and training tools to train staff quickly in a remote environment (Figure 1.7). Good practices for resilience also included a focus on the human aspects of HR management, including supporting the mental health of staff and maximising the flexibility of leave policies (OECD, 2020[36]).

Governments were able to rapidly redesign much of the public sector to operate remotely, due to innovation and investment in digital technology infrastructure prior to COVID-19. From the outset, human resource management was pushed to the frontlines of the pandemic response, with governments needing to keep staff safe and healthy. One of the most common and visible aspects of their response was a massive shift to remote working. The pandemic transformed the work and workplaces of public sector organisations, with many having to become largely virtual and remote, often overnight. At the height of the first wave of the pandemic, more than 60% of the central government workforce was working remotely in most OECD countries – a scale without precedent (Figure 1.8).

The ability to move rapidly to large-scale remote working and service delivery was a key source of government resilience during the initial shock of COVID-19, and critical to continuity of government functions. It was possible partly because most OECD governments (22 of 34) already had the digital technology systems required for remote working in place prior to COVID-19 (Figure 1.9). While this was not specifically done for crisis preparedness, it gave governments a high level of redundancy in their operations, allowing any location to function as a “government office”.3 The experience with remote working demonstrates the importance of both maintaining buffers and ahead-of-time innovation to government resilience and shock absorption.

In areas other than digital infrastructure, governments still had to make significant changes to absorb the crisis and enable remote working: 23 OECD countries had to invest in new or highly transformed videoconferencing tools, 13 had to reconsider leave policies for staff who were unable to telework and 14 had to significantly revise their definition of essential workers (those who would still have access to offices, or be required to work). A striking example of the scale and speed of change is provided by the Bank of England. Between March and May 2020, its IT and HR systems were re-engineered to allow core banking functions to operate remotely, with “hundreds of billions of pounds worth of operations delivered from peoples’ bedrooms, attics and kitchens, whilst isolated on their own, or caring for children and other relatives” (Hauser, 2020[38]).

Resilience could have been improved by implementing changes in public employment processes prior to COVID-19. While rigorous evaluations of the effectiveness of these changes are not yet available, governments are embedding aspects of flexibility into public employment systems to support longer-term resilience. A large majority of governments intend to retain the more flexible practices (See Figure 6.8 for more details). As with other aspects of government responses, they could have been even more resilient had they made these innovations in advance of COVID. Public employment and human resources issues are explored further in Chapter 3.

Governments and independent economic regulators rapidly introduced a wide array of regulatory changes and easements to support COVID-19 policy responses and ensure the continuity of key services. Governments and independent economic regulators rapidly designed and implemented thousands of emergency regulatory measures to support the detailed implementation of government policies. This included emergency regulations to contain the epidemic, ensure the availability of essential goods to test for and fight the virus, and support continuity of supply in critical regulated sectors such as energy, e-communications, transport and water. They also included containment measures (such as quarantine requirements, travel restrictions and closures of schools), health system measures, and employment and social initiatives. Economic regulators put in place measures to protect public health and essential workers, support vulnerable consumers, and ensure the financial security of market actors. Details of regulatory measures can be found at the OECD Tackling Coronavirus country policy tracker (OECD, 2020[39]).

Governments and regulators also introduced a range of regulatory easements to reduce burdens on regulated entities and support service delivery. This was particularly important where legacy regulations threatened the delivery of essential services and goods. For example, Korea removed barriers that could limit the opening of innovative drive-through and walk-through testing facilities (OECD, 2020[40]; OECD, 2020[41]). Regulators extended or suspended deadlines, performance targets and incentive regimes and introduced regulatory exemptions. For example, Canada temporarily adjusted requirements for airlines to pay compensation (OECD, 2020[42]). Some regulators allowed co-operation between companies that might have been considered anti-competitive in normal times. Many regulators suspended or minimised inspections, focusing only on those deemed essential and sometimes moving to virtual inspections. The United States announced that it would not enforce when masks were put on the market without prior approval, if certain conditions were met (OECD, 2020[41]).

Governments and regulators fast-tracked many new regulations, and cut back on impact assessments and stakeholder consultation. Prior to the crisis, only around one-third of OECD countries had established some form of exception to the requirement to carry out regulatory impact assessments (RIAs) in emergency responses (OECD, 2018[43]). Various flexible approaches were therefore employed towards RIA for emergency regulations. These ranged from exemptions (e.g. Australia, Belgium) to ensuring that policy documents at least discussed qualitative impacts (e.g. the United Kingdom). The usual procedures to scrutinise the quality of RIAs for emergency regulations were often not followed or were shortened, although some oversight bodies have required follow-up once evidence becomes available (OECD, 2020[40]). Shortened legislative procedures were used to implement many regulations, making use of fast-tracking or emergency legislation (OECD, 2020[42]).

Stakeholder engagement practices used shorter consultation periods and more focused consultation activities. In some cases, economic regulators put consultations on hold, recognising the limited ability of stakeholders to take part. Regulators took a risk-based approach in deciding which stakeholder engagement processes to postpone, prioritising the most time-critical processes (OECD, 2020[42]). There have been examples of international co-ordination of responses and exchanges of practice through networks of regulators, including through the OECD Network of Economic Regulators. However, despite strong calls for governments to recognise the importance of international regulatory co-operation, their initial responses tended to be unilateral (OECD, 2020[44]).

Transparency and oversight has often been supported by making regulations temporary or subject to ex post review. Fast-track procedures can create risks for democratic oversight and transparency, as well as reduced effectiveness. These risks have been offset in many cases by the use of temporary regulations, sunset clauses and review requirements to ensure that emergency regulatory measures do not avoid scrutiny indefinitely. Most administrations have reported that their emergency measures are intended to be temporary. Many regulatory easements have end dates (with the possibility of extensions) to avoid unnecessarily long disruptions to markets and competition. Some governments added sunset clauses to emergency legislation, so laws either automatically expire or a decision has to be made to extend them. A number of governments added mandatory post-implementation review (PIR) requirements to emergency regulations. These mechanisms were not widespread before the crisis: just under half of OECD countries had some form of sunset requirements in place, and only eight had post-implementation review requirements (OECD, 2018[43]).

Governments and regulators will need to embed resilience as a key consideration for their regulatory frameworks, to ensure they can absorb future systemic shocks (OECD, 2019[4]). Building flexibility into regulatory management tools in a structured way, in advance, will increase their “crisis preparedness” and help governments to manage trade-offs between speed and transparency better. Flexibility can be built into RIA processes by exempting or requiring less detailed RIAs for certain emergency regulations, whilst ensuring timely ex post review (OECD, 2020[45]). Flexibility can be built into stakeholder consultation policies to enable more targeted but meaningful engagement in future crises (OECD, forthcoming[46]). Regulatory oversight bodies should consider how to adapt their practices during future crises to ensure that they can scrutinise and support potentially high-impact regulations. Regulatory responses to COVID-19 will be explored in more detail in the 2021 OECD Regulatory Policy Outlook. Chapter 7 also covers regulatory issues.

Many governments entered the crisis with established crisis public communication practices, which have supported their responses. Governments needed to provide accurate and timely information about the evolving health situation, lockdowns and social distancing measures to the public. In 2019, communicating during a crisis was the top cited challenge for public communication in most OECD CoGs (56%) and ministries of health (50%) for which data were available. Many had proactively prepared to address the co-ordination and human resources challenges it poses, with 26 of 27 OECD countries having central crisis communication co-ordination mechanisms. Eighteen out of 27 CoGs (67%) and 13 out of 17 ministries of health (76%) had defined crisis communication procedures. The same number of CoGs could provide surge support to such activities – see Chapter 4, and also OECD (2020[47]).

When citizens’ expectations are at their height, the authorities need to find the right words to make sense of what is happening, especially when a crisis is so severe that it challenges trust in the government. Making meaning refers not only to providing information, but creating a narrative that responds to public expectations (OECD, 2018[12]). This cannot fully be prepared for ahead of a crisis, and even some governments which had processes in place found it challenging. 12 of 26 CoGs (46%) identified the lack of a unified narrative and/or coherence in public communications across government as one of the most challenging issues in co-ordinating the response at the outset of the crisis (OECD, 2021[19]).

Digital communication has been important in supporting governments to disseminate messages quickly and effectively. Prior to the crisis, 15 of 27 (56%) of OECD CoGs reported that crisis communication was the leading objective for their use of digital tools. As COVID-19 emerged, OECD governments rapidly launched open government data initiatives to disseminate information about the crisis. The OECD has identified 76 such initiatives globally, with data repositories and dashboards being the dominant products. Of these, 83% provided information on the initial pandemic response while 77% sought to improve situational awareness for decision makers and the public (OECD, 2021[24]). Digital tools also proved helpful in communicating with diverse and harder-to-reach groups, including youth. Finland collaborated with civil society, media and social media influencers to share reliable information on COVID-19 measures, provided by public authorities. Over 1 800 influencers participated and 97% of respondents considered the information to be relevant (Ping Helsinski, 2020[49]).

Traditional crisis communication has often been implemented in a top-down manner, with messages delivered from governments to citizens (OECD, 2016[50]). During COVID-19, some countries have innovated by developing two-way crisis communication, to foster dialogue and help governments understand citizens’ questions and concerns. For example, Slovenia established a call centre for citizens to engage with public health professionals. This allowed citizens to receive immediate responses to health and safety issues, and gave government a more thorough and immediate knowledge of citizens’ concerns.

Global supply constraints in medical and other essential goods limited governments’ ability to absorb the shock of COVID-19. Their responses were also hindered by information constraints in public procurement systems. Shortages of basic medical goods have been among the most dramatic and distressing aspects of the COVID-19 crisis. Governments were required to procure large quantities of goods and services rapidly and unexpectedly, including vaccines, personal protective equipment, ventilators, hand sanitisers, face masks and health services. Early data illustrate the scale of spending: for example, in the United Kingdom, contracts related to COVID-19 amounted to GBP 21 billion in 2020 (Tussell, 2021[51]), roughly 1% of GDP. The rapid surge in demand, with many public and private buyers purchasing the same goods and services at the same time, led to global supply constraints.

Procurement systems did not necessarily face pressure from the total volume of spending. The surge in demand for essential goods and critical services during the COVID-19 crisis may have been offset by a slowdown in procurement in other areas of government. For example, Chile’s procurement spend increased by 7% in 2020, but there was a 29% decline in signed public contracts, as contracts became larger but fewer (ChileCompra, 2021[52]). In France, the first three quarters of 2020 saw a 25% decrease in the number of tenders published compared to the same period in 2019 (AdCF, 2020[53]).

However, a key challenge for procurement systems during COVID-19 has been a scarcity of “business intelligence” i.e. information about the needs of public entities, contracted suppliers, and available products and markets. Before the crisis, 19 of 32 OECD countries with data available did not have business intelligence among their e-procurement functions (OECD, 2018[54]). With many public buyers needing the same medical goods and services at the same time, any information gaps about demand or potential sources of supply hindered the efficiency of government responses.

Governments had to innovate their public procurement processes and IT rapidly to address information deficits and manage more efficiently within global supply constraints. Early in the pandemic, a lack of co-ordination increased the risk of duplication of purchases, and risked causing stockpiling in some locations while there were shortages in others. As a result, the use of co-ordinated approaches in public procurement evolved and intensified, including sharing information about prices and suppliers between countries and/or public buyers. For example, Chile identified and profiled key contracts and suppliers, and published a list of suppliers of critical products with information on their products and stocks. Examples from several countries (Canada, Ireland, Italy and the United Kingdom) demonstrate that close communication with suppliers, and national, regional or global partners helped all actors to be aware of potential solutions to supply shortages (OECD, 2020[55]).

Collaborative procurement approaches, such as centralised purchasing or joint procurement, were implemented in almost two-thirds (63.5%) of OECD countries. Even countries with more decentralised public procurement systems supported joint purchasing and other forms of collaboration to tackle COVID-19, for example in Germany, where health procurement is generally conducted in a decentralised manner (OECD, 2020[55]).These approaches can help to ensure immediate responses, sustain competition by avoiding emergency direct awards of contracts and avoid duplication of stock.

Some countries quickly developed e-procurement solutions. Lithuania created special IT tools to manage health sector institutions’ needs for supplies and services, in order to obtain actual data on procurement needs (OECD, 2020[55]). The pandemic has accelerated digital-by-default public procurement systems. For example, in Colombia, the use of the e-procurement platform SECOP II increased by 40% in 2020 (Portafolio, 2021[56]). Several countries are expanding the use and functionalities of existing or new e-procurement platforms. In some cases, better collection and tracking of information on emergency contracts and suppliers would have helped them to co-ordinate procurement, strengthen their capacity to anticipate procurement needs and minimise the risks of mismanagement of public funds.

The COVID-19 crisis created substantial integrity challenges for public procurement (OECD, 2020[57]). Previous emergencies have shown that when governments have to urgently procure large quantities of goods and services, the risk that they do not meet quality standards and/or are procured corruptly rises. Increased global competition for necessary supplies could also lead to buyers corrupting sellers in order to receive essential goods and services – the reverse of what normally happens. Governments also had to manage ongoing public contracts as well as their crisis procurement for COVID-19. Public procurement legislation often provides exceptional measures for paying ongoing contracts in emergencies but such derogations to established practices can open the door to corrupt practices, if they are not subject to transparent guidelines communicated to all contracting authorities. Public procurement issues are explored further in Chapter 8.

The management and operation of public assets and infrastructure proved resilient, but some infrastructure has had to be retrofitted and upgraded. Institutional frameworks and governance tools were essential to enable the provision of infrastructure services to be adjusted to respond to shocks to demand and supply. While some infrastructure services, such as transport, were disrupted in order to contain the spread of the disease, they were replaced by others, such as digital and communications infrastructure. Other infrastructure services and assets – including health, water and energy – became key enablers for emergency responses (OECD, 2020[55]).

Resilience in the management and operation of infrastructure was key to maintaining the continuity of public services. Several OECD countries ramped up temporary or portable health care units and partnered with the private sector meet the increased demand for health infrastructure. Some identified critical services and introduced strategies to overcome obstacles to ongoing infrastructure contracts. For example, Japan and Colombia adopted more efficient co-ordination mechanisms across all levels of government and between public and private stakeholders. This reinforced collaboration in the provision of infrastructure services and supported rapid dissemination of new information and emergency measures. The United Kingdom adopted guidelines to ensure continuity in the provision of services contracted under private finance initiatives (OECD, 2020[55]).

Infrastructure services were disrupted by lockdown and other measures, and in some cases by the need to upgrade and retrofit infrastructure to meet new health and safety requirements (OECD, 2020[55]). Navigating compensation to private sector providers for losses in revenue and cost overruns generated by lockdowns and restrictions also posed challenges. One potential underlying lesson may be the need for more comprehensive plans for managing, monitoring and mitigating risks throughout an asset’s life cycle. Rigorous assessments of total infrastructure life cycle costs could help governments overcome challenges in adapting to rapidly changing contexts. Increased awareness of and planning for infrastructure resilience will also support overall government resilience to a wide range of external shocks by improving the quality of infrastructure and enabling the continued delivery of essential services. Infrastructure governance is explored further in Chapter 10.

Digital government assets and infrastructure played a critical role in securing the continuity of services and remote operations. The speed with which countries facilitated the provision of existing and new digital services was related to their ability to use existing tools to transfer services to digital channels (OECD, forthcoming[28]). For example, in 2019 only 48% of OECD countries made half or more of their digital services available through single digital identity systems (OECD, 2020[29]). Where these are available, their use has increased rapidly. Chile’s digital identity system saw a 50% increase in the number of active digital identities during February-August 2020, and a 400% increase in transactions using digital identities during February-July 2020. The UK national digital notification system took 4 years to reach 1 billion message, then only 6 months – from May to November 2020 – to reach 2 billion. In Canada, the national government’s Shared Services Canada pivoted quickly to enable an overnight shift to work remotely, securing access and accommodating 250 000 civil servants. The challenges countries have faced in securing remote operations and resilient service delivery is reinforcing the role of digital and data-driven government. In Korea, the Korean New Deal envisages a post-COVID-19 digital recovery pathway to secure proactive and contactless operations and services by 2025, based on intensified use of data-driven and smart technologies in the public sector (Government of Korea, 2020[58]).

To build resilience during the recovery and adaptation stages of the COVID-19 shock, governments must ensure they remain able to act at speed and scale, while better safeguarding against threats to trust and transparency. The actions and responses of governments during the crisis have revealed areas of both resilience and vulnerability in their ability to absorb shocks. As described above, governments have been able to draw effectively on their resources of public funds, assets, employees and skills. They will need to rebuild these buffers in order to have capacity for future shocks. Governments have demonstrated their ability to innovate quickly under pressure, such as in policy making and public procurement. However, they have often performed best where innovation and preparation took place ahead of time, for example in digital technology and remote working. Governments have shown flexibility in applying standards for evidence, participation, transparency and oversight in order to react quickly to the crisis. However, this has come at the expense of creating long-term risks to effectiveness, fairness, integrity and public trust, especially given the unexpected duration of the pandemic. These risks appear to have been better contained in areas where emergency procedures have been set out in advance, such as in public communication and some areas of regulation.

Through the recovery and adaptation stages, the aim must be to lock in the lessons learned from COVID-19 and ensure greater resilience to future crises. Based on the discussion above, Figure 1.10 outlines a two-pillar agenda for building government resilience to future shocks. The first pillar is ensuring government’s ability to address shocks at scale and speed. These require internal-facing reforms to government operations, to lock in the benefits of reforms made during COVID-19, address areas where problems arose and mitigate future crises. In the immediate term, governments should use the major injections of public funds involved in COVID-19 recovery packages to build future resilience. The focus should first be on a green, inclusive recovery that mitigates the most pressing environmental risks, and adopts an all-hazards approach to resilience. Governments should also rebuild and maintain their buffers and surge capacities of public funds, employee skills, information and essential goods ahead of future shocks. They should consider how to support more proactive, anticipatory innovation, both to help mitigate future crises and lower the need for innovation under pressure during future shocks. Finally, governments should address the integrity risks created by rapid decision making and spending during the crisis, and better safeguard public spending and decisions.

The second pillar is building trust and transparency in government operations. These are outward-facing reforms aimed at improving how governments interact with wider society, to better support the healthy functioning of democratic systems. Governments must undertake inclusive policy making, drawing in wider views and opinions on tackling trade-offs and risks during recovery. They should ensure that the tools and analyses used in policy-making processes explore the various dimensions of inequality in society, and provide actionable information to address it and avoid doing harm. Governments should also build public trust by ensuring that the interests of all are taken into account in a visible and balanced way, in particular through the reform of lobbying systems. Finally, governments should better tackle mis- and disinformation, in order to be able to provide a shared platform of facts on which civic debate on future policy can be based.

The two pillars are interlinked and reinforce each other. Work to deliver a green recovery, build buffers and support anticipatory innovation and skills will support trust in government over the long term, by supporting better responses to future crises. Work on fairness and inclusion, representation, and tackling mis- and disinformation will support better responses when future crises arise by improving the quality of and public support for policy responses. Improving oversight and integrity is a cross-over issue, as reforms in this area can have direct effects on trust in government.

Governments should improve resilience by delivering a green recovery. 83% of recovery spending so far will have an unclear or negative environmental impact. COVID-19 recovery plans are expected to be one of the largest single injections of public funds on record. The post-World War 2 Marshall Plan represented approximately 2% of the GDP of the United States and the recipient countries combined. In comparison, the United States is proposing a USD 2 trillion COVID-19 recovery package (Davenport, 2021[59]), equal to around 9% of US GDP. The EU’s long-term budget and recovery instrument together total EUR 1.8 trillion (European Commission, 2021[60]), amounting to around 13% of EU GDP. Both what these funds are spent on, and how government systems are adapted to spend them, can deliver long-term gains in government resilience.

The 2020 OECD Ministerial Council Statement recognised the need for governments to focus on restarting hard-hit economies by boosting growth, income and employment while promoting cleaner, more inclusive and sustainable economies (OECD, 2020[61]). Among OECD countries, the highest policy priorities for the recovery period are typically restoring growth to pre-pandemic levels, protecting the most vulnerable and building a green economy (Figure 1.11). Over the long term, these objectives should be mutually reinforcing. Designing recovery packages with decarbonisation objectives in mind will increase resilience to pressing environmental risks, and help ensure a more sustainable growth trajectory. This thinking is visible in many plans. For example, the EU’s package provides major funding for fair climate and digital transitions, and future preparedness, recovery and resilience. The US plan aims to support job creation through investing in infrastructure and supporting jobs in wind and solar power, and electric cars.

However, most of the planned spending will not drive a green recovery. OECD countries and key partner economies have so far allocated USD 336 billion to environmentally positive measures within their COVID-19 recovery packages, only 17% of the total sums allocated so far. The remaining 83% of funding either does not consider environmental dimensions or, worse, reverses progress on some of them (OECD, 2021[62]). This mirrors the potentially ineffective allocation of earlier COVID-19 support packages noted in Figure 1.6.

Governments should adopt green budgeting practices to ensure their resilience to environmental risks. Ensuring spending is targeted effectively on priority areas will require improving their capacity to focus spending on priorities and to reallocate funding across budget areas. The design of recovery plans could benefit from the architecture put in place to support spending reviews, with a stronger focus on expenditure performance, evidence and prioritisation, and a more collaborative approach across ministries. Over the past 10 years, the use of spending reviews has spread from 16 to 27 OECD countries (OECD, 2019[63]). One example is the “Insight into Quality Program” in the Netherlands, with pilot “public value scans” (Government of the Netherlands, 2020[64]). Governments can also mobilise green budget tagging and green budgeting to ensure a focus on long-term environmental goals is maintained. They can use green budgeting tools to assess how budget measures and stimulus packages affect green objectives, and prioritise investments that support a low-carbon recovery (OECD, 2020[65]). Green budgeting practices are becoming mainstream in some OECD countries, such as France, which published its first Green Budget in 2020 (République Francaise, 2020[66]).

Governments should ensure infrastructure projects support future resilience and contribute effectively to climate change adaptation and mitigation. Among surveyed OECD countries which have already approved COVID-19 recovery packages, 71% identify infrastructure investment as an important component. In Chile, Costa Rica, Hungary, Ireland, New Zealand and Slovenia, 30% or more of the stimulus has been allocated to infrastructure investments (OECD, 2020[67]). Strategic planning which aligns these investment plans with long-term growth and wellbeing policies can maximise returns on climate resilience, social inclusion, sustainable growth and gender equality. OECD countries are increasingly aligning their infrastructure strategic vision with broader objectives (Figure 1.12). For example, Canada and Ireland are updating their investment plans to fully align infrastructure investments with social and environmental policy goals. Canada is funding short-term projects to repair and upgrade existing infrastructure, as well as disaster mitigation and adaptation projects (Infrastructure Canada, 2020[68]).

Appropriate maintenance and upgrades of existing infrastructure will also improve resilience. Inadequate maintenance can result in rapid deterioration of asset quality, require costly rehabilitation and interrupt essential services. Infrastructure systems that can cope with highly uncertain future operating conditions require a dynamic approach to infrastructure planning, and decision-making approaches that can accommodate uncertainty, allow for flexibility, and enable adjustments to reflect changing conditions or new information (OECD, forthcoming[69]).

There may be a tension between recovery and adaptation in infrastructure. The inclination to promote “shovel-ready” infrastructure investments in recovery packages must be balanced against the need for environmentally sustainable and climate-resilient infrastructure. Project prioritisation and selection must strike a balance between harnessing infrastructure to contribute to growth, while also reducing the vulnerability to future natural and human-made threats. Governments should use assessment methods that consider projects’ contribution to environmental, social and resilience policy goals. For example, the EU Recovery and Resilience Facility provides EUR 672.5 billion in loans and grants to member states for investment and reforms, underpinned by national plans that must set out the expected results and ways to assess the progress towards the environmental, social and policy goals (European Commission, 2021[70]).

More broadly, governments must take account of the evolving technological and economic environment to enable a green recovery. The performance of long-lived, capital-intensive infrastructure is sensitive to shocks and changing economic and political circumstances. More robust future thinking and strategic foresight can help governments adapt their strategic planning to heightened uncertainty and promote sustainable investments. For example, the Dutch Futures Lab in the Netherlands is a cross-governmental initiative which assesses infrastructure projects under multiple scenarios, to identify circumstances or events that might affect the value-for-money of infrastructure investments. This creates a shared understanding of key uncertainties and a basis for more coherent response to major long-term challenges (Marsden et al., 2018[71]).

Public procurement should bolster long-term government resilience and tackle environmental risks, both through what is purchased and how systems are operated. A significant portion of recovery packages will be disbursed through public procurement, which represented 30% of total government expenditure prior to COVID-19. As in the private sector, public procurement has long pursued just-in-time strategies, focused on cost optimisation and relying on the efficiency of global value chains. From a resilience perspective, COVID-19 has shown that efforts to deliver public services as efficiently as possible may reduce their resilience. A shift towards “just-in-case” strategies may have benefits, by building buffers and reducing the cost of disruptions if supply chains fail. For example, the UK green paper on transforming public procurement calls for a national procurement policy to support supplier diversity, innovation and resilience (UK Cabinet Office, 2020[72]).

Public procurement strategies can directly support recovery and environmental objectives. For example, Denmark is running a social housing renovation programme which creates jobs, while also addressing environmental objectives by ensuring that the retrofits address aspects such as insulation and energy efficiency. France has included a public housing renovation programme to enhance energy efficiency in its recovery plan. More agility in interactions with the market and procurement strategies supporting innovation could unleash businesses’ potential to deliver diversified solutions. For example, Ireland established a central database that businesses can use to provide details about the goods or services they can supply or donate. Canada and Luxembourg set up similar platforms to facilitate interactions between buyers and suppliers for key goods and services (e.g. test kits, ventilators, nursing services, IT support). The United Kingdom called on medical device companies and manufacturers to come up with innovative solutions for ventilators (OECD, 2020[55]).

Stimulus packages and public investment are essential for the recovery, but when the time is appropriate, governments will eventually need to rebuild fiscal buffers to safeguard their ability to provide financial support in future crises. Strong and timely fiscal support from the start of the pandemic has played a vital role in supporting incomes and preserving jobs and businesses. A premature and abrupt withdrawal of support, as in the aftermath of the global financial crisis, should be avoided while economies are still fragile and growth remains hampered by containment measures. Continued income support for households and companies is warranted until vaccination allows a significant easing of restraints on high-contact activities. Stronger public investment in health, digital and energy infrastructure will also be needed to enhance resilience and improve the prospects for sustainable growth. Ensuring debt sustainability will be a priority only once the recovery is well advanced, but planning for management of the public finances that leaves space for public investment should start now (OECD, 2021[2]).

Rebuilding fiscal buffers requires monitoring and managing fiscal risks and contingent liabilities. Budgetary responses to COVID-19 have changed the fiscal risk environment for governments, placing greater emphasis on the need for effective monitoring and reporting of fiscal risk. While governments have shown that they were prepared to use balance sheet measures to complement the budgetary response to COVID-19, effective fiscal risk management frameworks and practices are a crucial part of that response. Over time, there may be a risk that some of the government loans issued as part of the response might not be repaid or that governmental guarantees are called upon. The incentives for effective monitoring and reporting practices are greatest in countries where the appropriations for grantees were for the current fiscal year, such as France, Germany and the United Kingdom.

Governments must retain redundancy and spare capacity in their delivery options, by building digital infrastructure but also retaining the infrastructure to deliver key government functions by other modes. As already described, digital infrastructure has proven a key source of resilience in many areas of government operation during COVID-19, and has at least partially replaced physical infrastructure. The crisis has catalysed an increase investment, and in some cases is driving upgrades to digital infrastructure. For example, in Greece, the COVID-19 crisis has resulted in a stronger generalised push towards digitalisation in public administration, including for government services not directly affected by COVID-19 (OECD, 2020[73]). Governments are also facilitating the use of digital assets to provide wider public services. For example, the United Kingdom has committed to providing more than 1.3 million laptops and tablets to help disadvantaged pupils and students access remote education during the COVID-19 outbreak (UK Department for Education, 2020[74]).

From a resilience perspective, the lesson is that governments should retain multiple effective modes of delivery for key processes. Government resilience requires redundancy and spare capacity in how government operates. The characteristics of the COVID-19 crisis, requiring governments to physically distance staff as much as possible, made digital channels the most effective mode of delivery. They would be a less effective solution in a crisis which requires government staff to work together in specific locations and/or which directly disables digital infrastructure (e.g. earthquakes, floods or cyberattacks). Governments should aim to further build out their digital competence and capabilities (OECD, 2020[29]) but also retain their non-digital infrastructure (e.g. physical offices, landline communications) to provide redundancy and mitigate different kinds of crises. Governments should thus maintain multiple coherent service delivery channels, such as digital, in-person and telephone (“omni-channel” service delivery). As discussed further below, retaining traditional in-person channels of delivery also supports citizens who are less willing or able to use digital services, and can improve proximity and visibility of government for citizens.

Governments need to ensure better buffers of “essential goods”, and consider carefully how to secure adequate supply in crises. Stockpiling alone cannot guarantee resilience, as future crises are not fully predictable, and so neither are the goods needed to deal with them. Governments should consider three lines of action to secure the provision of essential goods, to be actioned together before crises hit and create shortages. The first is strategic oversight, grounded on foresight scenarios and risk assessment to identify types and quantities of essential goods needed in case of crises, plan and co-ordinate agile responses along the supply chain, and communicate with citizens and stakeholders. Second, they should support the availability of essential goods, by leveraging their buying power, supporting private sector innovation and capacities, and stockpiling and pooling resources across borders. Third, governments should ensure their populations have access to essential goods, including through reinforcing the resilience of critical infrastructure required for production, trade, transport and distribution, and by co-ordinating last mile distribution. Regulatory policies are also essential, as agile regulation is key to facilitating surge production, allowing newcomers to enter the market to produce essential goods, and fostering international regulatory co-operation.

Governments can improve resilience by ensuring they have better systems in place to identify and support resilience-enhancing innovations before crises occur. As discussed above, the COVID-19 crisis has seen governments innovating in many aspects of their operation, including policy making, human resources management, procurement, and data analysis and dissemination. In a complex world, not all risks are predictable, and innovation is a legitimate and necessary part of how governments absorb crises. However, as emphasised above, many of the areas in which innovation has been needed since the outbreak of COVID-19 were identified prior to the crisis. Many of these innovations are now being retained in the recovery period, suggesting they have benefits beyond enabling the emergency response to COVID-19, and could have been implemented earlier.

Governments can improve resilience by improving their strategic foresight skills: creating functional and operational views of the future that allow for better anticipation and advance planning. More fundamentally, they should seek to improve resilience by encouraging innovation outside of crisis periods, and in particular, the wider use of anticipatory innovation approaches. Anticipatory innovation involves policy makers outlining the parameters of the futures they want or futures to avoid, and then experimenting in a real-world environment to determine effective policy to move towards the preferable scenarios (Tõnurist and Hanson, 2020[75]). For example, The Netherlands organises regular, repeated dialogues in which policy makers and stakeholders examine specific future environmental scenarios and issues, identify their different ambitions, and explore how to realise them. The United Kingdom has experimented with a “digital sandbox” for innovative financial sector firms. This digital testing environment allows firms to test and develop mechanisms to counter issues such as preventing fraud and supporting vulnerable customers (UK Financial Conduct Authority, 2020[76]). Applied effectively, including in concert with new technology, these approaches could enable more of the innovation needed to absorb crises to take place before they happen.

Governments can improve their resilience by cultivating skills and capabilities among public sector employees to solve complex problems and innovate. While no one skillset makes workers resilient, public services can focus on developing a workforce rich in the skills that contribute to resilience.4 Governments cannot fully predict the shocks and crises they will face in the future, so can maximise resilience by investing in their workforces “general purpose” skills and capabilities to solve complex problems i.e. understand the problem faced, think creatively to define potential solutions, test these and co-operate with others to put them in to practice.

Governments should lock in the increased co-ordination achieved during COVID-19, identifying practices and staff skills that have been effective in increasing flexibility, agility and effectiveness in decision making. Governments should also ensure public servants understand the machinery of government and complex service delivery systems, and proactively build the relationships needed to co-ordinate with key actors in other areas of government.

Many of the key known risks which governments will face in the coming decades are transnational in nature. Governments will need to be able to effectively engage with each other to design and implement shared solutions. Resilience will thus require governments to have effective international engagement, co-operation and dialogue skills. Skills in languages and cross-cultural communication will also be important.

Governments must address any integrity risks created by lowered standards of oversight and consultation during COVID-19, and build future resilience by establishing emergency systems in advance to mitigate future crises. As described above, the COVID-19 crisis has obliged governments to take quick decisions and actions in many areas, including policy, regulation, budgeting and public procurement. The rapid, high-volume outlays of economic support, stimulus packages and social benefit programmes have created a stress test for integrity systems, particularly internal control, oversight, audit and risk management. This has both amplified existing risks to integrity systems and created new ones. Past crises have shown that emergencies and subsequent responses create opportunities for integrity violations in areas including emergency procurement, allocation of economic recovery and social benefit programmes, and delivery of services (such as contracting and administration of vaccines). Fraud and corruption can seriously endanger the effectiveness of government responses. Scandals and perceptions of undue influence and unethical practices can undermine trust in government and endanger citizen support for reforms.

These risks need to be managed through short-term and longer-term measures to safeguard public integrity in the design and implementation of policy responses (OECD, 2020[57]; OECD, 2020[77]). During the initial pandemic response, in a number of countries, government bodies issued advice and guidance for individuals and businesses to help safeguard relief funds from fraudulent schemes, including Canada, the United States and France (Tasker, 2020[78]; Kreidler, 2020[79]; Le Figaro, 2020[80]; ICAEW, 2020[81]). In the United States, the Recovery Accountability and Transparency Board created an analytical platform that could identify recipient anomalies, and then tasked the inspector general for the particular programme to address issues. This helped to prevent both fraud and corruption, while also building the capacity of the inspector general functions within line ministries (Zagorin, 2020[82]) A public platform, Recovery.gov, allowed journalists and citizens to track taxpayers’ money and see how the government was spending it.

Looking to the longer term, building a mature integrity system that promotes a culture of integrity, along the lines of the OECD Recommendation of the Council on Public Integrity (OECD, 2017[83]), is key to future resilience. Several aspects of safeguarding integrity and accountability are of relevance:

  • Preparedness and planning for managing risks and tolerances: Planning and preparedness should pre-emptively take into account the need for oversight, control and risk management, as these objectives are often perceived to conflict with programme objectives. To minimise ad hoc decision making, particularly in times of crisis, planning can include defining the risk tolerances and acceptable trade-offs management is willing to make, such as easing specific controls to facilitate timely disbursement of funds (i.e. planned resilience).

  • Internal control: The effectiveness of planning and preparedness measures depends in large part on the extent to which management responsibility over controls is articulated, adopted and effectuated. Resilient organisations have a form of governance that is characterised by distributed control. In the integrity context, as seen during the current crisis, this manifests in a need to enhance management control and ownership over the internal control environment.

  • Information management: How information is managed and used is widely accepted to be a key determinant of organisational resilience. Many OECD member and non-member countries often fail to disseminate the results of risk assessments, particularly of emerging risks. Although governments in most countries conduct risk assessments, not all of them have developed the policies, practices and culture to use the results effectively. Communicating the results of risk assessments to the key stakeholders who can use that information to shape policies or make management decisions can help to improve the resilience of integrity systems.

  • Ensuring that decision making is evidence based: The crisis has demonstrated the value of investing in IT infrastructure and data-driven approaches, for addressing both everyday challenges and acute shocks. Many of the countries which were best prepared to set up transparency portals, track stimulus funds and harness data for oversight were those that had already invested in the necessary infrastructure, capacity and skills.

As future shocks occur, the most resilient governments will be those with effective and fair mechanisms to engage citizens in designing and co-implementing solutions. As emphasised above, standards for transparency, evidence and participation have been lowered in many areas of government during the COVID-19 crisis. They have also been changed, for example by using timely but unofficial evidence, or through consultation with rapidly established expert and scientific panels. As the shock of COVID-19 begins to recede, governments must adapt how they operate in order to build public trust and better support the functioning of healthy democratic systems. This section outlines key reforms to do this.

Public trust in government plays a critical role in government effectiveness and resilience. Measures of trust capture people’s confidence that institutions will continue to deliver, safeguard the public interest, and protect current and future generations. Numerous studies have identified trust, both in institutions and in other people, as a key ingredient of social and economic progress (Algan and Cahuc, 2014[84]). People’s trust in government institutions helps the implementation of policies, by supporting prioritisation of action, generating initial support more rapidly, increasing compliance with new practices, reducing enforcement costs, etc. In the COVID-19 pandemic, societies with higher levels of institutional trust have achieved greater compliance with measures needed to stop the spread of the virus (Bargain and Aminjonov, 2020[85]). In turn, this has allowed a greater focus on efforts to soften the socio-economic consequences of restrictive measures and to learn lessons that could inform policy responses to future shocks.

There is a growing consensus that lack of trust in government in recent years has been undermining the legitimacy of public institutions, nurturing political polarisation and favouring populist movements (Devine et al., 2020[86]). Public trust in government suffered significant damage following the 2008-09 global financial crisis and only in some countries has it recovered to pre-crisis levels (OECD, 2019[87]). A sense of inequity and unfairness both in economic and social terms, and in political and representativeness terms, pre-dates the COVID-19 crisis. In 2018, only 40% of people surveyed in 26 OECD countries felt that they could have any influence in what the government does (Chapter 12). The OECD reported a “clear sense of dissatisfaction and injustice” over social policy. Across 21 OECD countries, 60% of people felt that the government did not incorporate the views of people like them when designing or reforming public benefits (OECD, 2018[88]).

2020 has created more challenges for public trust in government, and for civil liberties and democratic systems more generally. After an initial “rally round the flag” effect in the early stages of COVID-19, most countries have seen an erosion of trust in government and public institutions during 2020 – see Chapter 12, and also Eurofound (2020[89]) and Ipsos (2021[90]). Corruption and fraud scandals overshadowed government responses in many countries. Some commentators have suggested that the unprecedented curbs on civil liberties in 2020 (curfews, movement restrictions, limiting or banning gatherings) went beyond what is permissible under international law for limiting rights during public health emergencies (Narsee, 2021[91]). A recent citizen survey ranked governments as both less ethical and less competent than businesses, the media and non-governmental organisations (Edelman, 2021[92]). There have been widespread social protest movements in many countries, including OECD countries (Rachman, 2021[93]; Trian, 2021[94]).

Rebuilding and maintaining their citizens’ trust will require governments to understand and act upon its main determinants. The OECD assesses five drivers that can improve trust in government: 1) responsiveness in delivering public services; 2) reliability in anticipating new needs and safeguarding people, 3) integrity; 4) openness; and 5) fairness (OECD, 2017[95]). Wide variation in these drivers has been found across countries and across different government functions. For example, prior to the pandemic, only 23% of people in Italy were confident their government would be reliable in dealing with shocks such as natural disasters or the spread of contagious diseases, while the figure was 54% in Finland in 2020 (Figure 1.13).

Increased responsiveness and reliability will help countries to build a resilient recovery and enhance people’s trust. In Korea and Finland, OECD data show that government’s responsiveness and reliability are the main drivers of trust (OECD/KDI, 2018[96]) (OECD, 2021[97]). Reliability of public services is also related to the actual or perceived long-term sustainability of policies, which in turn enhances people’s trust and support for reforms. For example, recent evidence from Korea, Spain and Sweden shows that most people believe that mitigating climate change will make future people’s lives better and that debt could be used for that purpose, but at the same time they are not willing to support future-oriented policies since they have little trust that governments will actually deliver on climate policies (Fairbrother et al., 2020[99]).

Countries’ experiences during the COVID-19 crisis offer evidence for the robustness of the OECD trust policy framework in identifying concrete policy actions to preserve trust during the pandemic, and also areas that governments should pay attention to in order to build resilience. Governments will need to increase support for policies and reforms for the recovery by informing and engaging the public, and anticipating and discussing the distributional impact of policies on different groups of people. Specifically, in recovery and adaptation from COVID-19, governments should build resilience by adapting how they operate in three key areas: 1) ensuring openness and responsiveness in how interests are represented and aggregated in public policy; 2) ensuring inclusion and fair treatment in policy design; and 3) tackling mis- and disinformation.

Parliaments play a key role in representing and aggregating societal interests, and will be important during the recovery. Parliaments already play a substantive role in authorising expenditures and revenue raising. In two-thirds of OECD countries, parliament either debates or approves medium-term budgetary frameworks, and in over half of countries, parliament debates long-term perspectives (OECD, 2019[63]). However, as governments commit to large-scale recovery packages and reforms, engaging with parliament beyond their traditional fiscal role will be important. Engaging parliaments in the full budgetary cycle, and particularly in medium-term and long-term sustainability analysis will help to sustain the credibility of multi-year commitments as well as consensus on the major forward-looking policy options.

Parliaments imperfectly represent society. Globally in recent years, on average across OECD countries, just under one third of parliamentarians were women (OECD, 2019[100]) and around one fifth were under the age of 40 (OECD, 2018[101]). As such, improving representation will require broader approaches to engage citizens, understand diverse viewpoints and needs, and build public trust.

Governments should increase efforts to involve citizens in policy making, both to increase trust and help prioritise reforms during the recovery. The recovery offers a rare opportunity to improve policy in a wide range of areas. Inclusive policy making, which allows diverse interests, needs and preferences to shape future policies, should be a priority. Inclusive policy making includes mechanisms for citizen consultation and participation, opening up government data and using data ethically, using digital technologies and data to design and deliver public services that respond to citizens’ needs and expectations, and developing initiatives to promote transparency and accountability. Additional measures could be developed to change how citizens experience public participation, the use of data and digital services, and public communication.

Promoting open government should help to improve quality of design, and also ensure that policies align with the public’s needs, values and priorities. Decisions surrounding long-term government and social resilience involve values, complex trade-offs, and long-term decisions. Representative deliberative processes like citizens’ assemblies can be helpful innovations and well suited to this challenge, when appropriately designed. The OECD Database of Deliberative Processes has identified almost 300 examples of representative deliberative practices (OECD, 2020[102]). These have shown that citizens can shape long-term spending decisions, such as the Melbourne People’s Panel, which identified the priorities for the city’s 10-year, AUD 5 billion plan. The cities of Nantes in France, Milan in Italy and Bristol in the United Kingdom have each convened a group of randomly selected citizens to deliberate and develop informed recommendations for their COVID-19 recovery plans.

Governments will need to recognise the digital divide in willingness and/or ability to interact with government online. OECD countries have high levels of internet coverage: 97% of the population have access to a 4G network and 87% of households have broadband connections. However, pre-COVID, only 58% of adults had used digital technologies to interact with public authorities over the past 12 months. Only 70% of 55-74 year olds, and 72% of those in the lowest income quartile had accessed the Internet in the last three months (OECD, 2019[103]). Resilience will require governments to offer multiple effective channels for engaging with citizens and for service delivery, while also investing in digital literacy from early stages of education.

Governments should improve the transparency and governance of lobbying procedures. Recoveries from previous shocks suggest that lobbying by interests with connections to policy makers can lead to biases in public policy. During previous economic stimulus efforts, firms which actively lobbied were more likely to receive support, and also to receive more and quicker support (Blau, Brough and Thomas, 2013[104]). In some countries, political connections tend to influence the allocation of financial assistance and, following bailouts, politically connected companies underperform relative to non-connected firms (Faccio, Masulis and McConnell, 2006[105]; Igan and Lambert, 2018[106]). Biased support packages and policies have a negative impact on social and economic resilience after crises (Hasen, 2012[107]).

Lobbying by businesses most affected by a crisis is a legitimate way to grant access to emergency response decisions. However, the need for rapid responses during the COVID-19 crisis has highlighted pre-existing risks in the governance of lobbying. Information from lobbying registers and media reports indicate influence and lobbying activities related to COVID-19 increased considerably during the first months of the crisis (Office of the Commissioner of Lobbying of Canada, 2020[108]). Early reports suggest that stimulus packages may have created advantages for businesses with existing relationships with lenders and the resources to navigate institutional and administrative complexities in some settings (Warmbrodt, 2020[109]; Tankersley, Cochrane and Flitter, 2020[110]). Some lobbying focused on advancing positions that some interest groups had been promoting before the crisis (Vogel, 2020[111]). These risks are exacerbated by a lack of proactive publication of information about who aimed to influence key decisions and how. Less than half of countries have transparency requirements covering most of the actors that regularly engage in lobbying (Figure 1.14).

Building public trust will involve adapting government functions to allow more balanced and transparent aggregation of interests, to prevent recovery from being undermined by inefficient programmes or inequitable policies.

  • While a proportionate level of flexibility should be permitted in crises, a minimum level of inclusiveness needs to be established and maintained. Expedited consultation can take place with stakeholders particularly affected, as well as more frequent and more informal consultations.

  • Post-implementation reviews, already planned for many regulatory measures, can help to maintain trust.

  • Governments should apply transparency measures to all actors aiming to influence decision-making processes. Online registries, such as the Canadian Registry of Lobbyists, are an important tool (Officer of the Commissioner of Lobbying of Canada, n.d.[113]).

  • Governments need to take a comprehensive approach to defining lobbying and lobbyists, to cover all forms of influence on policy making, including think tanks, research, grassroots organisations and advisory and expert groups.

  • Countries should provide public officials with an integrity framework for lobbying and other influence practices.

  • Improving standards and guidance will help lobbyists to engage in a way that does not raise concerns over the integrity and inclusiveness of policy making.

These issues are treated in more detail in the report on the implementation of the OECD Recommendation on Principles for Transparency and Integrity in Lobbying (OECD, 2021[112]).

Governments should seek to improve inclusion and fairness in citizen outcomes. Policy design and implementation should actively tackle inequality. Dissatisfaction with government and the feeling that government decisions are not serving the public interest, is being matched by growing income inequality between citizens. Pre-pandemic, the average disposable income of the richest 10% of the population across OECD countries was around 9.5 times that of the poorest 10%. This had increased from 7 times 25 years ago. There is a growing risk of income inequality becoming entrenched. Children whose parents did not complete secondary school have only a 15% chance of making it to university, while among those with at least one parent who achieved tertiary-level education the figure is 60% (OECD, 2018[114]).

Inequality has increasingly taken on an intergenerational dimension. As Figure 1.15 shows, since the “baby boomer” generation, each new generation has seen its chances of belonging to the middle-income class fall (OECD, 2019[115]; OECD, 2020[116]). COVID-19 is likely to have worsened this, through systematic, deep and disproportionate impacts on employment, education and wellbeing of young people (ILO, 2020[117]). Gender has also persisted as an important category of inequality. Pre-COVID, the gender pay gap averaged 12.8% across OECD countries ( (OECD, 2019[118]; OECD, 2017[119]). COVID-19 is again likely to have worsened this, with women having shouldered much of the extra care burden at home while also facing high risks of job and income loss (OECD, 2020[120]).

Governments seeking to build trust, resilience and healthy democratic systems need to ensure their policy-making processes more actively address the primary dimensions of inequality. Technical tools already exist to allow governments to better understand the differentiated impact of policies on different groups of citizens, such as fiscal incidence analysis (Lustig, 2018[121]). Other tools, such as gender budgeting, can help to ensure policy actively addresses inequality (Stotsky, 2016[122]). Governments should ensure that disaggregated information about how policies will affect different groups in society is systematically integrated into policy design and evaluation. For example, Canada has examined how government spending and policies to recover from the COVID-19 crisis will affect people across social groups, acknowledging intersecting identity factors such as gender and age.

Efforts to build government resilience and support healthy democracies should seek to better institutionalise and future-proof responses to mis- and disinformation. Many OECD countries were inadequately prepared to deal with disinformation during the crisis. Among 27 OECD member countries, only 11 CoGs had official documents, policies or frameworks in place to guide their responses to mis- and disinformation at the outset of the crisis. Only 4 of 18 ministries of health had similar documents or benefited from government-wide ones (OECD, 2020[47]). While this does not mean that governments had not been engaging with the topic, they may have been inadequately prepared to face the wave of health misinformation since the onset of the pandemic. In many countries, governments were initially hesitant to communicate decisively, including about the uncertainties surrounding the pandemic and this left room for misinformation to proliferate. Reports suggest that misleading rumours about how contagion occurred and the efficacy of social distancing led some people to continue activities that contravened guidance (Seitz, 2020[123]), and led others to damage infrastructure (Satariano and Alba, 2020[124]). More broadly, mis- and disinformation can undermine the operation of democratic systems by hindering the ability of the public to engage in communication characterised by the use of facts and logic, moral respect, and democratic inclusion (McKay and Tenove, 2020[125]).

Combatting the divisive role of mis- and disinformation requires government action on multiple fronts. Effective public communication can promote confidence in the effectiveness and safety of vaccines by providing accurate, trusted and timely information (OECD, 2021[126]) and by working with “trusted voices” to amplify the reach of reliable content. For example, Canada is working closely with faith and community leaders to create and relay messages according to local needs, encouraging two-way dialogue with the public (Government of Canada, 2020[127]).

Public communicators can play a key role in tracking and responding to false or misleading narratives. For example, the United Kingdom has established a Rapid Response Unit to identify and address COVID-19 related misinformation. The unit helps public communicators recognise, monitor and respond to potential harmful content strategically. Building resilience will also require governments to mobilise and engage with citizens and stakeholders through whole-of-society approaches. Prior to the crisis, 20 CoGs in OECD countries were already consulting with external partners to combat misinformation. For example, Italy has established a task force to formulate interventions against misinformation with media and civil society (OECD, 2020[128]).

Efforts must also include broader policy measures to strengthen the media and information ecosystem (OECD, 2020[128]). Governments need new mechanisms to enforce regulations to tackle the spread of mis- and disinformation on new and evolving communication platforms, including promoting transparency and competition. This will require a holistic, whole-of-government effort to manage trade-offs, and support freedom of speech and expression effectively. Policies to support a diverse and independent media sector through tax incentives and subsidies, such as in Austria, Canada, France and Sweden, may also be of value. Many have also supported public service broadcasters. Finally, working on the demand side of information will be crucial; for instance, media literacy initiatives can help children and adults to understand different media and messages, evaluate information, and be more cautious before amplifying potentially inaccurate or misleading content (Matasick, Alfonsi and Bellantoni, 2020[129]).

Governments should consider strengthening their frameworks for managing citizens’ personal data, allowing citizens more transparency and control. The contact tracing systems used to help manage the COVID-19 pandemic have involved collecting and processing citizens’ personal data in unprecedented ways. This has underlined issues of privacy, safeguards and controls in how governments use citizens’ data. Building trust will involve securing individuals’ agency over their own data. Governments should ensure they have clear and open rules in place for data management and digital tools, to give more transparency and control to citizens over what data governments hold about them and how it is used. To complement their existing data protection and privacy regulations, governments have been increasingly working on values-based instruments such as data ethical frameworks (e.g. in the United Kingdom and the United States). It may be helpful to adopt more formal data ethics frameworks to support their practical implementation, such as the OECD’s Good Practice Principles on Data Ethics in the Public Sector (OECD, 2021[130]).

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Notes

← 1. The conceptual framework of Government at a Glance includes public employment and public finance, respectively, as the labour and capital inputs to government. This chapter additionally discusses the importance of assets and information as explicit inputs. The COVID-19 crisis is bringing to the fore that this more expansive definition of “capital” inputs may be needed to analyse government functioning in future. During COVID-19, governments have required data and information to make policy and decisions (e.g. infection rates, job losses) and a range of assets to deliver (e.g. hospitals, stockpiles, internet infrastructure).

← 2. Government at a Glance’s conceptual framework presents the operation of government in a form analogous to an economic production function. This suggests a more technical rendering of the concept of a resilient government i.e. a resilient government is one which can effectively substitute inputs for each other, and/or identify new production processes, such that it can continue to produce the same outputs for citizens when disruption occurs. Both renderings of the concept are applied in sections 1.2 and 1.3 of this chapter.

← 3. Note that this spare capacity was generated partly by substituting public inputs with private inputs i.e. many public servants provided their own office spaces, internet connections, etc, during 2020.

← 4. Recommendations based partly on the OECD Government after Shock event. The event involved over 5 500 citizens, practitioners, stakeholders and government leaders in over 65 local and thematic conversations, to think critically about the implications of the COVID-19 crisis, and explore how to steer government and society towards preferred futures. This was followed by a global forum with government leaders (OECD, 2020[131]).

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