SGI Studies SGI 2018: Policy Performance and Governance

Policy Performance and Governance Capacities in the OECD and EU Sustainable Governance Indicators 2018 Policy Performance and Governance Capacities in the OECD and EU Sustainable Governance Indicators 2018 Contents 6 Foreword 8 Key Findings 12 Empirical Findings SGI 2018 14 Quality of democracy 26 Governance 40 Policy performance 52 Conclusions 58 Measuring Sustainable Governance 62 Three analytical pillars 72 Methodology 74 Survey structure 76 The SGI website 78 Results and data at a glance 82 Countries and indicators – a sample 86 Country profiles SGI 2018 224 Country experts 226 Regional coordinators and advisory board 228 About the authors 230 Legal notice 5 Sustainable Governance Indicators Foreword Declining quality of democracy and governance As the challenges associated with globalization, have repeatedly underscored the fact that coun- aging societies, digitization and climate change tries featuring a high quality of democracy and grow in number and complexity, OECD and EU high standards of good governance are best-po- countries should demonstrate greater resolve sitioned to formulate and implement sustainable in the proactive implementation of reforms. policy solutions to the urgent challenges we face However, findings for the recent edition of the as a society. The developments identified in the Sustainable Governance Indicators (SGI) point current SGI edition are thus even more alarm- to rather dispiriting developments instead. ing: In addition to deteriorating democratic Indeed, the SGI 2018 show that the framework standards, we see leadership in several countries conditions for long-term governance in many neglecting important aspects of good govern- OECD and EU countries have, in recent years, ance. As a result, the capacity to solve problems deteriorated. As the bar for democratic stand- in many OECD and EU countries has, on average, ards continues to be lowered and political diminished in recent years. polarization grows, it is becoming increasingly difficult to carry out sustainable reforms. Growing partisan polarization and the rise of populist forces across the globe are the main Whereas the model of a pluralistic liberal drivers of these developments. Difficulties in democracy remained in the eyes of many ob- reaching a broad social consensus on policy servers throughout the start of this century solutions are exacerbated by this polarization destined for triumph, it has instead come under in party politics. Populist parties in particu- mounting pressure. As the 2018 edition of our lar often exploit emotions in their campaigns Bertelsmann Transformation Index (BTI) shows, designed to sabotage efforts to formulate and this is true for many developing and transfor- implement relevant policy solutions. As a result, mation countries. But it is also true for highly parties find themselves in a “permanent cam- developed industrial states, where we see dis- paign” mode that makes fact-driven compromise tressing trends in the erosion of democratic across party lines more difficult. Accordingly, and constitutional standards, particularly in the increasing polarization in many countries terms of press freedoms. Of the 41 OECD and has led to a deterioration in several govern- EU countries surveyed by the SGI, no less than ments’ ability to communicate their policies 26 states feature a deterioration in the quality and the efficiency with which planned political of their democracy compared with the SGI of projects are implemented. In addition, many four years ago. For 19 of these states, including governments involve fewer societal actors in Hungary, Poland, Turkey, Mexico and the United the planning phase of reforms. Some govern- States, the downward trend is relatively sharp. ments – for example in Hungary, Poland or Turkey – deliberately bypass legally determined The normative principle of a pluralistic liberal consultation procedures or exclude govern- democracy underpins the work of the Bertels- ment-critical actors from these processes. mann Stiftung. In recent years, SGI findings In the near future, we can expect that the ob- 6 Foreword served trends will have a negative impact on the ing the gap between the governed and those in economic, social and ecological sustainability of power. Pursuing the simplistic solutions offered many OECD and EU countries. Indeed, Turkey’s by populist parties and eschewing principles current economic and currency crisis can be of good governance will undermine any suc- attributed to the country’s eroding quality of cess in this regard. Good practices for effective democracy and poor governance under Presi- governance include the clear communication dent Erdogan. Furthermore, the clear setbacks of credible goals that are accompanied by an observed in the United States in all three SGI implementation strategy that involves the pillars – policy performance, quality of democ- broad-based consultation of societal actors. racy and governance – show that no sustainable policy solutions can be expected under the er- In addition to the elements of good governance ratic presidency of Donald Trump. highlighted here, the new edition of the Sustain- able Governance Indicators offers a tremendous Aart De Geus In terms of achieving sustainable policy results, volume of data to be leveraged by professionals Chairman and CEO, the Nordic countries as well as Switzerland and in politics, academics and the media. Bertelsmann Stiftung Germany continue to excel. And while these Executive Board countries continue to feature the highest quality of democracy among the countries surveyed, they are also subject to the pressures of growing political polarization. These developments will surely render governance more difficult in the future. Nonetheless, there are some positive developments identified by the SGI that can serve to inspire other countries. France, for example, has taken an extremely positive turn in terms of governance quality under its new pres- ident, Emmanuel Macron. Macron’s refreshing political style shows that improved government efficiency, clear and consistent communication and the early involvement and consultation of societal groups can go hand-in-hand, even in a strongly polarized political system. Canada also receives high marks for the similar policy ap- proach taken under Justin Trudeau’s leadership. Dr. Stefan Empter Senior Director Given the context of growing populist forces, Program governments must be more resolute in mitigat- Shaping Sustainable ing the lines of conflict in society and reduc- Economies 7 Sustainable Governance Indicators Sustainable Governance Indicators 2018 – Key Findings in Brief Declining quality of democracy, increasing polarization and deficits in governance capacities – a heavy mortgage for many OECD and EU countries The current issue of the Sustainable Governance Indicators shows some very worrying trends within OECD and EU countries which, given the major policy challenges ahead, may seriously burden them in the future. Concept of liberal democracy increasingly These findings show that even within the OECD under pressure in Western industrialized and the EU, the model of liberal democracy is nations as well subject to growing pressure – in some countries this means that even central democratic and The highly developed industrial nations of the constitutional standards such as media freedoms OECD and the EU are not immune to an erosion are already severely damaged or undermined. of democratic quality. On the contrary: The qual- Countries such as Hungary or Turkey can no ity of democracy in many Western industrial na- longer be considered consolidated democra- tions around the globe is also on the decline. cies – a particularly harrowing fact, given that Of the 41 OECD and EU countries, no fewer OECD and EU membership actually presupposes than 26 countries show a trend of deterioration an intact respect for democracy and commit- compared with the SGI edition of four years ago, ment to protecting fundamental rights. Poland, and this trend is relatively clear for 19 of these too, which for a long time served as a model of countries. On the other hand, only 14 countries democracy development among the Central and are improving their democratic and constitu- Eastern European countries, has dramatically tional standards, and only nine of these have im- deteriorated under the right-wing conservative proved significantly on comparison. Particularly PiS government. The country has fallen 29 places. negative developments are evident in countries such as Hungary, Poland, Mexico and Turkey. While the countries at the lower end of the And even a country like the United States, ranking (Poland, Romania, Mexico, Hungary, despite the fact that democracy and freedom Turkey) continued to lose considerable ground, have traditionally underpinned its conception scores for the countries leading in the SGI’s of itself as a nation, has recently suffered a sig- Democracy Index (Sweden, Finland, Norway, nificant loss in the quality of democracy. A pres- Denmark, Germany, Switzerland) remain ident who denounces the media as an “enemy of relatively stable. It would therefore be wrong the American people” and neither recognizes nor to make a negative sweeping judgment of all values the media as a watchdog signals an egre- countries in the OECD and the EU. However, gious attempt to undermine freedom of expres- the discouraging trends in a considerable sion and constitutes a threat to democracy. number of countries cannot be denied. 8 Key findings Increased political

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