Trust and satisfaction with public services

Trust in public institutions and satisfaction with public services are important yardsticks of the quality of public governance. They reflect people’s perceptions of government competence in designing and delivering policies and services, and expectations on the behaviour of public institutions and their representatives. Although high trust in public institutions is not a necessary outcome of democratic governance, trust and satisfaction with public services facilitate effective governance, as they correlate with high rates of compliance with policies, participation in public life and social cohesion.

Satisfaction with public services in Luxembourg exceeds the OECD average across all services considered. Satisfaction with the healthcare system was 85% compared to the OECD average of 68%. Moreover, Luxembourg also outperforms the OECD average for satisfaction in education (75%), administrative services (80%), and the judiciary system (75%).

Luxembourg fares above the OECD average on trust in public institutions. A majority reported high or moderately high trust in the national government (56%), civil service (67%) and parliament (50%). The institution with the highest trust is the local government, for which 69% have high or moderately high trust, compared to the OECD average of 47%.

 Achieving results with good governance practices 

In an age of multiple crises, governments need to adopt more advanced practices to build trust in public institutions and enhance democratic resilience. Actions include building on democratic strengths, such as enhancing citizen and stakeholder engagement in decision making; reinforcing key competences to handle crises, such as budgeting and public financial management processes to address the green and digital transitions; and protecting against threats to democratic values, such as maintaining effective public integrity rules and promoting ethical use of artificial intelligence.

Citizen and stakeholder engagement in decision making helps to improve the design, implementation, and public acceptance of policies, infrastructure and services. The OECD Infrastructure Governance Index (IGI) on stakeholder participation provides an overview of countries’ performance in developing national guidance for stakeholder engagement, promoting their effective participation, and ensuring stakeholder oversight over infrastructure projects.

Luxembourg performs below the OECD average on the IGI on stakeholder participation. It scores 0.28 on the IGI, compared to the average value 0.52 across OECD countries (1 is the maximum possible score, meaning full application of IGI on stakeholder participation). Luxembourg performs at the same level as the OECD average with a score of 0.19 out of a maximum value of 0.33 on stakeholder oversight.

Budgeting management processes, such as green budgeting, can help address the climate crisis and achieve environmental goals. While there has been a rapid increase in the number of countries implementing green budgeting mechanisms, these could be used more effectively. Green budgeting mechanisms include institutional arrangements to assess the environmental impacts of budgetary and fiscal policies, methods for evaluating their consistency, mechanisms to enhance transparency and accountability, and an enabling budgetary governance framework.

With a score of 0.49, on a 0-1 scale, Luxembourg equals the OECD average in the application of green budgeting. Luxembourg achieves its highest score in OECD Green Budgeting Index in the institutional arrangements dimension (0.16) and its lowest score in accountability and transparency (0.09).

Financial contributions allow individuals and entities to support political candidates and parties. However, political finance needs to be adequately regulated to reduce risks of undue influence and policy capture.

In Luxembourg, publicly owned enterprises and foreign states or enterprises are not allowed to finance political campaigns and parties. In turn, anonymous donations to political parties or candidates need to be registered or reported.

Strengthening information integrity has become particularly complex in the digital age. While digitalisation and artificial intelligence (AI) provide enormous opportunities, including in expanding and protecting the exercise of some democratic rights and freedoms, their use also brings challenges for governments such as ensuring that they enhance people’s willingness and ability to engage constructively in democratic life and that they benefit society as a whole.

Luxembourg has policy initiatives - such as guidelines, standards, or principles - in place to ensure the ethical use of AI.

 What resources public institutions use and how they are managed 

After stark deterioration due to the COVID-19 pandemic, which required emergency measures and direct support mechanisms to business and people, public finances show positive signs, but the recovery remains fragile. The fiscal balance is the difference between a government’s revenues and its expenditures in a year. When the government spends more than it collects, it has a fiscal deficit. When it spends less, it has a fiscal surplus.

Luxembourg recorded fiscal surplus in both 2021 (0.7% of GDP) and 2022 (0.2%). In comparison, the average across OECD countries was a deficit of -7.5% in 2021. In addition, Luxembourg also had the second lowest debt ratio in 2021 with 31.4% of debt as share of GDP. The OECD average the same year was considerably higher (120.8%).

Public investment can enhance productivity and economic growth and help implement long-term policies, such as green energy infrastructure to support action on climate change. In turn, governments procure large amounts of goods, services and works to help them implement policies and deliver public services.

Luxembourg’s public procurement spendings are similar to the OECD average: 11.5% of GDP in 2021, compared to 12.9% on average in the OECD. Luxembourg’s public investment, however, is above the OECD average. In 2021, it invested 4.2% of GDP, compared to 3.4% on average across OECD countries.

The size of public employment varies significantly among OECD countries, ranging from around 10% to just above 30%. 

In 2021, public employment in Luxembourg accounted for 14.5% of total employment, below the OECD average of 18.6%.

Governments use different mechanisms to harness and develop the capacity of their workforce. For example, internal mobility in public administrations helps to pool human resources across government and attract and retain civil servants.

In Luxembourg internal mobility of civil servants is possible but not encouraged or expected. Similarly, internal mobility is also possible for senior-level civil servants, although it is not encouraged or expected. Luxembourg has the practice of developing individual learning plans for all or most public employees.

Equal representation of women and men in the public sector is a key indicator of progress towards gender equality, diversity and better representation. In 2020, a majority of employees in the public sector in OECD countries were women (58.9%), with large differences among countries. However, women are often under-represented in managerial positions.

Luxembourg falls below the OECD-EU average for gender equality in senior management positions in national administration (28.1% against 40.8%). Luxembourg has not achieved gender parity in ministerial position, although it slightly surpasses the OECD average (38% compared to 36%).

Young people are under-represented in public and political life across the OECD, with the risk that their voice and interests are not sufficiently taken in consideration in policymaking.

The average age of cabinet members in Luxembourg is 54 years, 1 year higher than the OECD average (53 years).