Reforming performance management in Lithuania: towards results-based government
ENLithuania introduced performance management in 2000 to bridge the gap between falling budget revenues as a result of a fiscal crisis and increasing governmental commitments owing to its accession to the EU and NATO. Although the World Bank granted Lithuania the highest rating of performance management in Central and Eastern Europe, it still lags behind more advanced states (e.g., the United Kingdom). The Lithuanian government performs on the input-side, but fails on the outputside both at the EU and national level. Although Lithuania has one of the lowest deficits of transposing the EU directives, Lithuania is unlikely to meet its targets set under the development goals of the EU Lisbon Strategy of 2000. Although Lithuanian ministries are exceeding most targets at the level of outputs, these targets are not challenging and there are no positive changes at the level of effects. The implication of this mixed performance is that there have been limited benefits to citizens. The introduction of performance management (together with increasing budget revenues) solved the initial problem of governmental reliability and contributed to Lithuania’s membership in the EU and NATO. But this is partly attributable to increasing revenues of the state budget. However, the contribution of performance management to the efficiency and effectiveness of governmental operations as well as the quality of public services has been limited. Despite plentiful performance information, its quality is poor and its use in the decision-making process is limited. Also, performance budgeting is only of presentational nature; performance information is used primarily for external reporting rather than internal monitoring.Performance management in Lithuania has interconnected supply-side and demandside problems. As long as there is no supply of good performance information, it is difficult to use in the decision-making process. As long as there is insufficient demand for performance information, there is no incentive to produce good performance information. Also, there has been a lack of other reforms supporting performance management in Lithuania. ere is a good deal of “red-tape” (bureaucracy) in Lithuania, implying the need for internal deregulation. Also, there are limited human resources and their motivation to perform is insufficient. ese constraints imply the need for reforming the civil service. If the Lithuanian government is not result-based, what kind of government is it? Lithuania still has traditional government based on the rules, especially on the input side. Performance management does not fit well with such government. Also, there is some evidence of budget-maximizing and bureau-shaping behavior in the public sector, constraining efficient use of public resources. Because of weaker influence of the EU since Lithuania’s recession in 2004, changing governments and their political priorities as well as rather weak administrative capacities, Lithuania’s achievements in the area of performance management over the period of 2000–2007 seem quite good. Lithuania is clearly more advanced in the NPM reforms compared with other former Soviet Union republics and Mongolia. erefore, it could offer interesting lessons to the surrounding region.This policy study proposes the incremental option of improving performance management by seeking higher efficiency and effectiveness of governmental operations and achieving greater intensity of performance management in terms of instruments and content. Five sets of recommendations are provided to achieve result-based government in Lithuania. First, it is recommended to design an integrated performance management program, improving all stages of the performance management cycle (strategic planning, monitoring, and evaluation). Second, on the demand-side of performance management there is a need to improve the program-based budgeting and its implementation (especially more intensive scrutiny of the budget programs based on performance information and government priorities). Third, on the supply side of performance management it is necessary to develop performance management systems in each Lithuanian ministry (improving business processes, training staff, etc.). Fourth, it is important to continue reforms supporting performance management in Lithuania in the areas of financial management, the civil service, deregulation, and e-governance. Overall, the reform of performance management in Lithuania remains unfinished. More NPM reforms are necessary outside performance management for achieving its future aims: greater efficiency and effectiveness of government operations as well as greater accountability to citizens.
