Along with debt accumulation and economic uncertainty, the 2008 economic crisis provoked discontent among citizens. People wonder whether governments are truly working for the public interest or only for just a few. Such disenchantment is eroding the foundations of democratic systems in OECD countries and beyond and requires urgent action to strengthen the legitimacy of public institutions. Although in many OECD countries, there are signs that people’s trust in their government is finally improving after deteriorating since the crisis, in others, trust remains stubbornly lower than in 2007. This chapter argues that by taking a people-centric approach to policy making and service delivery, governments can rebuild trust in the public administration, improve the effectiveness of public action and better respond to the global and domestic challenges OECD countries face.
Population aging is modifying both the structure of the labour market and the demand for public services in many OECD countries. Prolonged life expectancy has resulted in longer periods of retirement: in 1970, a man would spend an average of 11 years, and a woman 15 years in retirement; by 2016 they would spend 18 and 22 years, respectively (OECD, 2017[1]). With fertility rates decreasing in most countries, pension expenditures are expected to increase and contributions to shrink. Most countries have enacted reforms to contain pressures on public finances, such as increasing retirement ages and limiting early retirements. However, costs are also expected to rise in other sectors, such as health care, where spending is expected to reach 10.2% of gross domestic product (GDP) by 2030 (Lorenzoni et al., 2019[2]), up from 7.8% in 2017.
A large share of the population is vulnerable to financial shocks (e.g. long illness or job loss). Income gaps have widened in most OECD countries in the past two decades, and there has been a reduction of redistribution through taxes and transfers (Causa, Browne and Vindics, 2019[3]). Across OECD countries, the wealthiest 10% of households hold 52% of total net wealth, while the 10% of people at the top of the income distribution hold 24% of total income (Balestra and Tonkin, 2018[4]). This entails that wealth concentration (e.g. ownership of economic capital, such as real estate) is now twice the level of income inequality, which indicates that the capacity to respond to financial shocks is unevenly distributed among the population.
Furthermore, digital technologies are changing social and civic communities and how people participate in, and experience, civic and political life (Welby, 2019[5]). These technologies, the growing availability and use of data, as well as services provided by the private sector that are considered as benchmarks, are transforming how public goods and services are produced and consumed at a global scale. This, in turn, affects people’s expectations about how governments should work and provide services. Increasingly, people want to interact with their governments in more efficient ways, including through digital platforms, and they expect the same quality of service regardless of the channel chosen to access the service. Information and communication technologies (ICTs), when implemented appropriately, have helped simplify government processes, eliminate paper-based transactions and established single points of access to the public administration. Yet, new expectations pressure governments to make service delivery more integrated and proactive while operating under fiscal constraints.
This chapter draws from evidence included in the rest of the publication to showcase outcomes and governance processes in place in OECD countries to focus on a people-centric approach to policy making and service delivery. It also discusses areas where further improvements are sought and provides examples of good practices. More detailed data on the different policy areas can be found in the remainder of the publication.