EXECUTIVE SUMMARY
Weak state performance and low levels of state capacity are among the key causes of democratic decline and populism. This is particularly true in the case of the newly established post-communist democracies of the Visegrad group: Czechia, Hungary, Poland, and Slovakia.
State capacity is the ability of the state to implement the designated policy goals in practice. There is a strong causal link between a well-functioning state (that is, good governance) with extensive capacities, and the various indicators of development. Just as the decline of democracy, the containment of populism and authoritarianism is closely linked to the level of state capacity. For a stable democracy and the rule of law to function, it is essential that the state is able to carry out its tasks effectively.
In Czechia, there are three main areas of intervention in terms of improving state performance: state capacity, evidence-based policy making and digitalization.
In 2020, there were approximately 78,000 public servants – 2% of the total Czech workforce. There are three key problems regarding the quality of human resources in the public sector: lack of financial and personal motivation, fragmentation and lack of coordination across ministries and municipalities, and the threat of politicization of the public sphere. and the threat politicization of the public sphere.
To gain sufficient financial capacities, the state needs an efficient tax system. At 34%, the tax-to-GDP ratio in Czechia was on the OECD average, but it was still lower than in most EU countries. The tax composition is heavily reliant on obligatory social security contributions, health, and social insurance, which are the highest of all OECD countries. Contrarily, property taxes are the lowest of all countries. This tax composition places a large burden on low-income households. With 47% of GDP, the governmental expenditures are slightly below the EU27 average of 52%, while social security expenditures are significantly below the average.
Government decisions in Czechia can appear ad-hoc or politically motivated and can be difficult to defend in front of the public. Lack of analytical and legal skills can also lead to formal deficiencies in proposed legislation. The two main problems regarding digitalization of the Czech state are the lack of integration of digital state services, and the inefficiency of IT procurements.
In Poland, two key areas for urgent intervention are the rule of law and the quality of the civil service.
For almost two decades Poland was considered one of the most successful cases of a transformation from a communist regime to a liberal democracy. However, since 2015, changes in the judicial system and the public service have been criticized by the public and various international institutions.
Over the last decade, Poland has performed well in terms of professionalization of the civil service. However, in recent years, the autonomy and impartiality of the bureaucracy has been weakened by the amendment of the Civil Service Act.
In Slovakia, the three key problems are: the extreme fragmentation of the public administration system, EU funding dependency, aging bureaucracy, and the unclear relationship between politics and meritocracy, i. e. the government and the National Implementation and Coordination Authority.
In Czechia, a stronger public service office must be created! Rather than promising to fire a certain number of government officials in election campaigns, review state agendas and see if there are indeed too many of them – or if, to the contrary, they are lacking at some positions! The prestige of the public sector (both moral and financial) must be raised!
The extremely fragmented Czech municipality system must be centralized and rationalized!
Strengthen the revenue side of the Czech state budget! Reform the tax mix in order to better target excess money lying in banks, private investments, and properties!
While improving internet connectivity and digital skills of the Czech citizens, the possibility of reaching the government through offline routes must be ensured! Build autonomous IT infrastructures for the Czech state!
In Poland, the recommendations of the EU regarding judicial reform must be implemented! A platform between government officials and human rights organizations must be created!
Strengthen the legal guaranties of the autonomy of the civil service! The standard of not being a member of a political party for at least 5 years should return! Create a transparent recruitment process with a two-stage candidate selection process! Clearly define the career path of civil service!
In Slovakia, implement a reform of the regional administration! After reducing the complexity of the system, create incentives for municipalization!
Create state capacity to properly handle EU funding: reform the public procurement system and decentralize decision-making! EU funding must be diverted towards meaningful development, instead of maintaining state services!
Create a Slovakian inter-ministry arbitrage organ! Strengthen state service education! The newly established ministerial analytical institutes have to be stabilized and strengthened, including their financing, intellectual independence, and position within the legislative system!
