ANALYSIS FASTER, SIMPLER, MORE EFFICIENT:
A TIME OF DISRUPTIONS FOR THE PUBLIC SECTOR FRANCO BASSANINI CHAIRMAN
CASSA DEPOSITI E PRESTITI Franco Bassanini is one of the most renowned modernisation experts in Europe: former Italian cabinet minister for Public Administration and Government Reform (1996-2001), he has brought one of the most ambitious public sector reforms in recent years to a successful conclusion. Today he is chairman of the Cassa Depositi e Prestiti S.p.A., and European governments regularly seek his advice. He was member of the Executive Board of the ENA (École Nationale d'Administration) and member of the French Attali Commission. Currently he is the president of the Astrid Foundation, an Italian think tank dedicated to public sector modernisation in Europe.
How would you sum up the challenge of modernising the public sector?
Which drivers did you focus on to achieve that?
For European countries, it’s very simple: it’s a key challenge in terms of coping with globalisation. Allow me to explain: for years governments ran up debt to finance their public services. Today everything has changed. Our economies are competing with those of developing countries. Europe will only come out on top if it finds the correct balance between the cost and quality of the services provided to citizens and businesses.
All of them! We simplified legislation, privatised certain sectors and decentralised decision making. At the same time we reinvented the missions of public institutions and simplified the procedures for citizens and businesses – with the “single point of contact” concept and by putting numerous services online. The reform was an all-encompassing project. Ultimately we succeeded in reducing the cost of the public sector by more than two percent of GDP – while at the same time improving the quality of the services provided.
Are public services too expensive? I would put the question differently. Public spending can be defined as the amount of financial resources that the government removes from the private production of goods and services. If this translates into high quality services, the balance is right. However, if the services are mediocre, it becomes counterproductive and penalises businesses – and thus the country – versus emerging market economies.
How did public sector reform start in Italy? In the middle of the 90s the country found itself in an untenable situation. The public debt had reached 120% of GDP, with an annual deficit of 11%. The cost of the public sector thus needed to be drastically reduced.
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In your opinion, do cost reduction and quality improvement necessarily go hand in hand? We should be careful not to generalise in this regard. It was possible in Italy because we had a great deal of catching up to do, starting with a public sector that was both too expensive and too inefficient. Now the focus should above all be on improving the quality of the services provided. In France, for example, efforts should be made to reduce costs while maintaining the good quality of many public services.
Which are the primary areas for improvement in the years ahead? The first area is institutional: responsibilities have to be clearly defined and divided among the various public