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Mehmet Akif Demircioglu mdemirci@indiana Indiana University-Bloomington, USA

CHANGING THE EUROPEAN COMMISSION: NEW PUBLIC MANAGEMENT AND NEW TRENDS International Conference on Administrative Development: Towards Excellence in Public Sector Performance, Riyadh, Kingdom of Saudi Arabia (November 1-4). Mehmet Akif Demircioglu mdemirci@indiana.edu

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Mehmet Akif Demircioglu mdemirci@indiana Indiana University-Bloomington, USA

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  1. CHANGING THE EUROPEAN COMMISSION: NEW PUBLIC MANAGEMENT AND NEW TRENDSInternational Conference on Administrative Development: Towards Excellence in Public Sector Performance, Riyadh, Kingdom of Saudi Arabia (November 1-4) MehmetAkifDemircioglu mdemirci@indiana.edu Indiana University-Bloomington, USA School of Public and Environmental Affairs

  2. Overview • The European Commission (EC) • New Public Management (NPM) and Administrative Reform (AR) • NPM in the EC • Kinnock Reforms • Conclusion • Recommendation and Lessons

  3. The EU Institutions • European Commission • European Parliament • Council of the European Union • European Court of Justice • European Court of Auditors

  4. European Commission • Executive branch w/seat in Brussels (also Luxembourg) • There are approximately 23 000 of these European civil servants. • The ‘seat’ of the Commission is in Brussels (Belgium), but it also has offices in Luxembourg, representations in all EU countries and delegations in many capital cities around the world. • Initiator of legislation • Implements EU policies and budget • Enforces EU law • Represents the EU internationally

  5. The European Commission has two main components: the College of Commissioners, comprised of one commissioner from each member state (there are 27 commissioners now), headed by the President of the Commission and serving for a five-year term, and the Directorates-General (DGs) (which reflect sectors or functions) and services, which is the permanent bureaucracy of the Commission, which prepares legislative proposals and directs implementation and compliance with EU regulations and directives.

  6. Literature Review-NPM • Organizational change in the European Commission is probably most fruitfully explored as a European public policy itself (Richardson 2006). • Many journal articles address topics relating to organizational change, such as the adaption and implementation of “reinventing government” and New Public Management Reforms (e.g., Berman and Wang 2000; Brudney and Wright 2002; Fernandez and Rainey, 2006; Grizzle and Pettijohn 2002; Hood and Peters 2004; Julnes and Holzer 2001; Thompson and Fulla 2001). • The EC administrative reform is the topic of a number of insightful studies (Bearfield 2004; Coull and Lewis 2003; Kassim 2004a, 2004b; Levy 2004; Metcalfe 2000; Spence 2000; Spence and Stevens 2006; Stevens and Stevens 2006; Bauer 2001, 2002, 2008b). • NPM has been portrayed as a global paradigm emerging in response to economic, institutional, political, and ideological changes (Box et al. 2001; Kamensky 1996; Kettl 1997, 2000; Osborne and Gaebler 1992; OECD 1995; Wise, 2002). Researchers have demonstrated that governments vary in what they take from the bundle of reforms (Brudney, Hebert, and Wright 1999; Hood 1996; Pollitt and Bouckaert 2000; Savoie 1994; Wise, 2002) and have provided evidence of transformation in both the meaning and content of reform strategies from one country to another (Christensen, Lægreid, and Wise 2002; Czarniawska and Sevon 1996; Lægreid 2000, 2001; Pollitt and Bouckaert 2000; Rosenbloom 1993; Wise 1994, 2002; Wise and Stengård 1999). • The NPM which is a kind of framework of the change of public organizations draws on several different intellectual traditions (Aucoin 1990; Box et al. 2001; Carroll 1995; Kettl 1997; Lynn 1998; Rosenbloom 2001; Savoie 1994; Terry 1998; Wise, 2002). Many different activities fall under its umbrella, and no consensus on the meaning of the construct can be claimed (Ferlie et al. 1996; Hood 1996; Pollitt 1995; Stark 2002). • NPM’s relative lack of boundaries may be seen by some as a fundamental weaknesses and by others as an advantage (Ferlie et al, 1996, 10; Quinlivan and Schon, 2002, 26). • Although NPM has been presented as a ‘public management for all seasons’(Hood, 1998, 9), according to Rhodes, it is more accurate to talk about ‘competing webs of interpretation’ (Rhodes, 1999, 365). These webs differ from country to country, which explains the challenge of innovation that lies with the EC (Quinlivan and Schon, 2002, 20). Consequently, that emerges from the literature is that NPM is not well-defined. • We should not focus on the abstract notion of whether NPM is right or wrong, yet ask in what contexts is the NPM likely to achieve performance improvements (Streeten, 1993, 235). • There are roughly four reasons of the NPM: The macroeconomic troubles in the 1970s, neoliberal party politics of the 1980s, different administrative cultures stemming from different “state traditions”, and variation to different political institutions (Green-Pedersen, 272-273). Guy Peters (1997) contends that the Anglo-American tradition is more receptive to market-type reforms than is the case in the Germanic tradition in particular. According to Green-Pedersen, the reason of the last one may be found at two levels. First, macroinstitutional differences, such as majoritarian versus consensus systems, may result in different magnitudes of NPM reforms Second, differences may be due to microinstitutional differences. For instance, Peter Christiansen points to the power of public sector unions as part of the explanation for the limited extent of markettype reforms in Denmark. • The analysis of management reforms of international organizations fits well into the line of comparative public administration research attempting to understand the spread of new public management ideas (Osborne and Gaebler 1992; Peters and Savoie 1998; Wright 1997).

  7. NPM in the EU • One type of adjustment has been reforms of the public sector, such as the introduction of explicit measures of performance, decentralization, private-sector styles of management, contracting out, and privatization. These reforms are generally known as the “New Public Management” (NPM) (Clark, 2000; Hood 1991; Rhodes, 1999).

  8. Why Reforms? • Management and budgetary problems, corruption, unaccountability, inefficiency, lack of clarity and transparency, status quo, failures of adaptation as well as innovation, and the trend of NPM.

  9. Challenges of Reform in the EC • Bureaucratic resistance • In 50 years the Commission had never systematically revised its personnel policy, which is enshrined legally in the EU staff statute. • The Commission’s career structure was based more on seniority than merit. In the past, advancement depended on nationality, patronage, or length of service, rather than merit. Staff training was not compulsory, and the Commission spent little money on ensuring officials acquired the necessary skills. Officials enjoyed an attractive range of benefits and perks, such as family, education and travel allowances, as well as a generous pension scheme. However, a substantial body of European law governs employment conditions, and in particular protects the independence of officials, making it notoriously difficult to discipline under-performing staff. • Unproductive bureaucracy • Inefficient culture

  10. Reform Attempt 1: Santer Commission (1995-9) Unsuccessful • Following criticism of inefficiency and waste, the Santer Commission which took the office in 1995, launched a wide program of administrative reform called ‘Tomorrow’s Commission’. These reforms were promoted by Sweden and Finland where these two have strong traditions of transparency and accountability. • The reform process was divided into three projects: Sound and Effective Management (SEM 2000), Designing the Commission of Tomorrow (DECODE), Modernization of Administration and Personnel Policy (MAP 2000). • Nevertheless, a clear lack of communication and information with staff and lack of leadership from the top, and ineffective management led the resignation of the whole Commissioner in March 1999. • During 1998 the Commission began to lose authority due to management criticisms from the Parliament.

  11. Reform Attempt 1: Kinnock Reforms () Successful • Prodi President, Neil Kinnock VP and • Reform  White Paper. 1) modernization “culture based on service”, “good administrative behavior”, and “technological infrastructure” 2) “efficient allocation (ie, outsourcing). 3) “improvement of financial management” and “audit procedures”. 4) modernization of human resources policy from recruitment and retirement while the power of the middle managers has been strengthen. • Increased internal and public accountability--transparency, new operational systems, major changes in management of finance and people. • Evidence of NPM

  12. Kinnock’s Reform Agenda

  13. The Kinnock reforms seek to tie salary rises much more closely to promotion on merit. The Commission is increasing the number of grades to 16 from 8. Officials will still gain a salary raise, based on performance, for every step. However, the increases will be much smaller than those given for moving up a grade, and will progressively decrease the longer an official remains at the same level. Most importantly, promotions will depend upon a transparent system of credits. All staff will undertake a regular career development review. • The staff reforms broke down the rigid division between the four Commission ‘streams’ (these range from ‘A’ level top officials to ‘D’ level support staff, such as security guards).  inflexibility. In the past, talented staff who joined the lower ranks of the Commission found it difficult to move into other streams. In particular, ‘B’ stream officials, who provide technical support to the ‘A’ grades, were unable to switch streams without having to take another exam, even though their jobs were often similar in content. The new system has just two streams, the administration function group (AD), equivalent to the old ‘A’; and the assistant function group (AST), which embraces all the other streams. Officials who worked in the lower grades will enjoy enhanced promotion prospects, while the Commission is also making it easier to transfer into the AD stream.

  14. Range of reform in the European Commission (b/w 1995-2007) (#0  Weber’s bureaucracy model, #4 NPM)

  15. One hundred and sixteen telephone interviews with policy HoU (Heads of Unit) were completed, a response rate of 58 per cent (Bauer, 2008c).

  16. Conclusion • Kinnock reform changed the European Commission • Performance Improvement • Staff Regulations • 16 Grades (increase financial motivation) • Financial regulation and auditing systems • Training and Experience • Clear goals and defining responsibilities • Evaluation of success-- transparency • More control of middle managers (Directors General)

  17. Lessons • Organizations matters • Organizations’ size matters (effectiveness) also consultation (“shura”) • Manager & leader matters • First versus second (or third) choice (Senter vs. Kinnock) • Up-down-out support • Politicians, media, staff, managers • Failures becomes success? • The crisis established political demands for making the Commission more ‘accountable,’ ‘responsible’ and ‘transparent’ • Indicate the position • Flexibility and control • Do step by step • Always dialog

  18. Thank you Mehmet Akif Demircioglu mdemirci@indiana.edu

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