ECONOMY

Report: Public sector a state within a state?

Greece’s public administration stands as a major stumbling block to efforts for reducing the presence of government in the economy and society, Alpha Bank says in a study. The report titled «Reinventing the State – Who Is Afraid of Competition?» finds Greece among those European countries burdened by an overbearing bureaucracy, favoritism and corruption. «The Greek public sector is a particularly complex and voluminous formation, which, operating in monopolistic terms, devours the budget, does not serve the citizen, ‘strangles’ entrepreneurship and ultimately bogs down the economy and competitiveness,» says the study. Public administration is largely autonomous and – steeling itself behind controversial legal provisions, class interests and petty political party pursuits – exercises overbearing powers over the citizen and the economy, Alpha Bank says. The study cites an excerpt from the ruling party’s election manifesto as a «confession» of the state itself. «The existing restrictions mainly emanate from the legal and regulatory framework governing the functioning of public administration. A typical example is personnel management. The administrators of public agencies have limited possibilities for managing issues concerning the human resources they are assigned to oversee. They have no effective say in hirings, transfers, assessment and the administration of rewards or sanctions on personnel, which results in an inability to manage and plan… The existence of a large number of detailed legal and regulatory provisions on one hand hampers their monitoring and application and, on the other, creates a rules- rather than results-oriented operational framework,» the study says. The main conclusion of Alpha Bank’s analysts is that the serious problems of red tape, corruption, oversize and overdebtedness of the public sector stem from: * The complete absence of competitive conditions in public services. * Excessive protection and remuneration of public servants (with scant relation to the work they offer). * The virtual absence of control mechanisms in most departments and a lack of sanctions on public servants involved in cases of corruption. * The practice of financing the broader public sector irrespective of the quality and quantity of services it performs. The authors of the report contend it is unrealistic to heal the ailing public administration system without addressing the basic principles on which the system operates. The Alpha Bank report – coming on the heels of other recently expressed bold views by business leaders, such as Federation of Greek Industries President Odysseas Kyriakopoulos and National Bank President Takis Arapoglou – are interpreted by some observers as signs of a gradual fading of the «stigma» attached to big business in recent decades, and an attempt to claim a more active role in the shaping of political and economic developments.