If grades were given for government performance on how well core liberal democratic processes and institutions have been strengthened and consolidated in recent years, we would see a continuous decline in the average grade for governments worldwide.

For the first time since 2004, the Bertelsmann Stiftung’s Transformation Index (BTI) counts more autocratically governed states than democracies. The Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI) project also reports a decline in the quality of core democratic institutions and processes in EU and OECD developed countries.

Here too, the average (unweighted) rating given by our country experts in the democracy quality category fell from 7.3 (2012) to 7.0 (2022). Even though European countries such as Sweden and Finland continue to top the ranking, the all-clear cannot be given for the state of the Union as a whole. Quite the contrary: Hungary, Poland and Romania are still at the bottom of the list, showing further – and in some cases worrisome– declines.

Robust democracy and good governance go hand in hand

Robust democratic institutions and processes are a necessary prerequisite but, on their own, offer no guarantee for overcoming the new and, at the same time, old crises we face: global order and inter-system competition, the climate crisis, the coronavirus pandemic, social division, and rising inequality.

These crises, particularly their combined impact, require governments to demonstrate long-term thinking and acumen in crisis management. If these crises are to be successfully navigated, governments will need to do more than identify and announce sustainable policy solutions; they will need to institute more inclusive and forward-looking policymaking processes to ensure the effectiveness of these measures in the longer term. Our 2021 special study on crisis resilience showed that well-organized democracies navigated their way through the COVID-19 pandemic better than those with deficits in this area.

Particularly when it comes to the decisive question of how to maintain citizens’ trust in the problem-solving capacity of democracies in the EU, it is critical that governments begin to broaden their perspective beyond a narrow focus on the robustness of core democratic institutions. The key is to establish a new way of governing: proactively across silos; humbly and in a way open to the broad inclusion of new knowledge and relevant societal actors; and strategically, with a culture of ongoing learning and trial and error.

Yet, as our new study shows, too few EU countries have shown they can craft solutions capable of meeting future challenges in these areas. Despite a slight upward tick registered at the beginning of the COVID-19 pandemic, we recorded no significant improvement in the areas of policy coordination, consensus-building or strategy development since 2012.

Little progress in overcoming ministerial silos

Worryingly, governments in many places are no longer even achieving their own policy objectives. No fewer than 11 EU countries saw their government effectiveness diminish over the last ten years. In almost half of EU member countries, stagnation or setbacks were evident in proactive policy coordination.

In countries such as Poland and Hungary, well-functioning coordination procedures have given way to ideologically charged autocratic governance logic. Effective monitoring of the work of subordinate agencies is also a key aspect of policy success. A total of 11 EU countries show severe shortcomings in this area. Political clientelism renders this task even more difficult in some of these countries.

Finland and Denmark continue to create the best institutional conditions for proactive coordination, from the point of policy development to its subsequent implementation. In Finland, for example, the central government has a finely honed ability to monitor policy implementation on an ongoing basis and skillfully directs government communications.

More effort needed to win broad social acceptance of policies

Without citizens’ trust and broad-based support, even the best-organized government is likely to fail. However, the conditions under which European governments must facilitate societal consensus have become even more challenging today. In almost half of the EU’s member states, political polarization is currently hindering attempts to reach cross-party solutions, as our indicator “political polarization” shows.

Moreover, the past decade has not seen commensurate efforts by governments to rapidly accumulate a broad knowledge base. In no fewer than 13 European countries, the use of external expertise plays little or no role in political decision-making processes. In addition, efforts to build public support by involving all relevant experts and societal stakeholders in the early stages of policy development need to be strengthened in half of the EU countries.

At the top of our ranking of EU governments’ efforts to shape societal consensus are Denmark and Sweden. Hungary, Romania, Poland, Cyprus and Croatia bring up the rear in the comparison of consensus-building capacity.

Finally, a government’s ability to take a forward-looking approach in its day-to-day activities depends on the extent to which it can review the effectiveness of its overall policy performance on an ongoing basis, using suitable data and a process open to the public. Moreover, it must be able to adapt its approach to new circumstances as needed.

Our rankings of effective strategy development are again led by Denmark, Sweden and Finland. Denmark offers a good example of information-driven policymaking. Relevant stakeholders are involved in the conduct of impact assessments there, and evaluations are explicitly integrated into the policy formulation process.

In many countries, however, a culture of information-driven policymaking is very poorly realized or exists only in a rudimentary form. As part of the Sustainable Development Goals (SDGs) announced in September 2015, the international community has created a comprehensive set of targets and subtargets for sustainable development. However, a particular cause for concern is that in 19 EU states, policy proposals are hardly ever examined for their compatibility with economic, social and environmental sustainability goals.

Looking ahead, if European democracies are to respond quickly and ably to the complex set of challenges we face, leaders in all EU member states must monitor closely the progress made in EU countries and adapt their own governance arrangements to facilitate innovation. Only then can this decade be turned into an era of progress in building robust, resilient state and governance capacities within the EU.

About the author

Christof Schiller is a Senior Project Manager at the Bertelsmann Stiftung, where he directs the Sustainable Governance Indicators (SGI) project. The Sustainable Governance Indicators (SGI) address two of the key sociopolitical issues facing highly developed OECD and EU countries: How to achieve sustainable policy outcomes while improving policymaking for the long term? Christof is an expert on comparative public sector governance, employment and social policies and comparative welfare state reform.

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