Mounting crises: Liberal democracies must practice forward-looking governance

The coronavirus pandemic, the climate catastrophe and the energy crisis have brought the issue of government’s ability to act effectively more squarely into the public eye than it has been for a long time.  In many places, confidence in democracies’ ability to solve current problems is declining.

Despite the positive developments seen at the beginning of the COVID-19 pandemic, there remains considerable room for improvement with regard to forward-looking policy coordination, the fashioning of broad-based societal consensus, and the development of strategy in OECD and EU countries. Too few countries have shown they are able to craft solutions capable of meeting future challenges in these areas. "In addition to strengthening democratic institutions and processes, 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," said Christof Schiller, a Bertelsmann Stiftung governance expert and study coauthor. These are the findings of a study that draws on the most recent edition of the Sustainable Governance Indicators. For more than 10 years, the Bertelsmann Stiftung has used this international monitoring instrument to track the progress made by OECD and EU countries in the quality of forward-looking governance.

There have been no changes at the top of the rankings for policy coordination. Finland, New Zealand, Canada 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. Germany ranks at only 18th place in terms of policy coordination.

Worryingly, governments in many places are no longer even achieving their own policy objectives. This capability has recently declined in 17 states. In 21 countries, stagnation or setbacks were evident in the area of policy coordination. In countries such as Poland and Hungary, well-functioning coordination procedures have given way to an ideologically charged autocratic governance logic. Effective monitoring of the work of subordinate agencies is also a key aspect of policy success. A total of 12 countries show severe shortcomings in this area. Political clientelism renders this task even more difficult.

Without citizens’ trust and broad-based support, even the best-organized government is likely to fail. However, the conditions under which governments must facilitate societal consensus have today become even more challenging. In nearly half of the world’s developed countries, political polarization is currently hindering attempts to reach cross-party solutions. Moreover, the past decade has not seen commensurate efforts by governments to rapidly accumulate a broad knowledge base and build public support by involving all relevant experts and societal stakeholders in the early stages of policy development. At the top of our ranking of governments’ efforts to shape societal consensus are Norway, Switzerland, Canada, Denmark and Sweden. Germany falls into 8th place in this area.

In no fewer than 14 countries, the use of external expertise plays little or no role in political decision-making processes. A total of 18 countries have significant shortcomings with regard to involving civil society actors in the development of policy.

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 and Finland. Germany falls only at 16th place in this area. Denmark offers a good example of information-driven policymaking. Relevant stakeholders there are involved in the conduct of impact assessments, and evaluations are explicitly integrated into the policy formulation process.

In many countries, however, the culture of information-driven policymaking is very poorly realized or exists only in rudimentary form. "A particular cause for concern is the observation that in 23 states, policy proposals are hardly ever examined for their compatibility with economic, social and environmental sustainability goals," said Thorsten Hellmann, a Bertelsmann Stiftung economics expert and study coauthor.