The purpose of the Human Development Reports

4

The purpose of the Human DevelopmentReports (HDRs), which the UNDP has publishedsince 1989, first with Global Human DevelopmentReports, and subsequently with National HDRs, hasbeen to stimulate public debate about importantfactors influencing the development process. Theauthors of these Reports thereby seek to influencepolicy – both at the global and national levels. TheReports have done so with a concept of develop-ment that goes beyond a simple economic per-spective. This concept sets human development –defined as the enlargement of choices available topeople – as the ultimate goal, and as the only trueyardstick of development. The Human Develop-ment Index (HDI) that underpins this concept incor-porates indices of economic achievement withindices measuring health and education. This Indexhas become a powerful tool – albeit imperfect andoften controversial – for measuring the performanceof individual countries over time, and for comparingthe performance of individual countries in terms ofthe degree of attention that human development isbeing given in policy-making.

Thus, the five previous Latvia Human Develop-ment Reports have analysed the social costs andhuman dimension of Latvia’s transition to a marketeconomy. They have focussed on such issues associal protection, health, education and growingregional, ethnic and income disparities. While itmay be difficult to prove a direct causal relation-ship, important legislative reforms and nationalprogrammes in Latvia can arguably be traced to theanalysis of structural problems in Latvian societythat was first brought out in these Reports, and tothe subsequent public debate and awareness thatthe Reports helped to stimulate. The present,sixth, Latvia Human Development Report takesthis analysis one step further by focussing on thepublic policy process in Latvia itself. In so doing,this Report focuses not just on whether the socio-economic conditions of Latvia today – and adminis-trative policies at the State and local levels – areresponsive to the needs and aspirations of the pop-ulation, but also on the extent to which individualsand social groupings have opportunities to influ-ence policies that effect them, and on whether theyare being heard.

As a Human Development Report this is aground-breaking publication, not just in Latvia, butin the World, because few are the countries in the

World today in which it would be possible – in areport by a United Nations agency – to gaugewhether true and effective democracy has takenroot and permeated the institutions, processes andpractices of policy-making. Indeed, a report thatasked similar questions could well be controversialeven in countries with well-established democra-cies. The openness with which large numbers ofdecision-makers, Saeima deputies, senior govern-ment officials, representatives of the media, acade-mia and NGOs have contributed to the analysis andrecommendations of this Report is a sign of how farLatvia has come since regaining its independence,and augurs well for its desire to become an open,participatory democratic society.

Public policy process is a term that only makessense in the context of a democratic society. As thisReport shows, this process is in Latvia still condi-tioned by the effects of more than fifty years oftotalitarian regimes that weakened civil society andcreated a gulf of distrust between the State andindividuals, a gulf that the new democratic institu-tions are still trying to overcome. At the same time,the concentration of economic power and massmedia and IT-technology in the new, market-basedeconomy creates new conditions for influence andcontrol over people’s behaviour. This Reportattempts to draw a balanced picture of the devel-opment of public policy making in independentLatvia by focussing sharply on areas that remaincharacterised by a lack of transparency and open-ness, and by undue concentration and influencingof policy-making processes. The Report also focus-es on positive achievements and new opportuni-ties that have enlarged the opportunities for dia-logue and consultation between the State and civilsociety. I hope that the analyses and recommenda-tions in this Report will contribute to furtherstrengthening the public policy process as adynamic that itself contributes to a more open andmore people-centred society.

J A N S A N D S Ö R E N S E N

United Nations Development Programme

Resident Representative

5

Latvia Human Development Report 2000/2001

Team

Tålis Tisenkopfs, Editor in ChiefAnita Ívarckopfa, Statistical Advisor

Aldis Lauzis, Latvian Editor

I N T R O D U C T I O N

Tålis Tisenkopfs

C H A P T E R 1

Tålis Tisenkopfs,Valts Kalniñß,

Aija Rieba

C H A P T E R 2

Valts Kalniñß,Jånis Ikstens

C H A P T E R 3

Aivita Putniña,Pauls Raudseps,

Vladimirs Meñßikovs

C H A P T E R 4

Astrîda Neimane,Linda Zîverte

C O N C L U S I O N

Tålis Tisenkopfs

A P P E N D I X

Anita Ívarckopfa

U N D P W O R K I N G G R O U P

Jan Sand Sörensen, Resident RepresentativeKims Ligers, Project Manager

Inita Pauloviça, Programme ManagerAléna Hansena, Programme Assistant

A D V I S O R

Anita Düdiña

E N G L I S H E D I T O R

Kårlis Freibergs

3

Forewords

Politics is the sphere in which adopted deci-sions affect human development in the most directmanner. For example, Latvia’s goal of acceding tothe European Union and the NATO Alliance is notan end in itself, but rather a means for guaranteeingthe security of the country and for promoting itsrapid and sustainable development. Similarly, it ispossible through politics to increase the level ofprosperity and welfare of the people with the aid ofqualitative pension, health care and rural develop-ment policies.

While the adoption of political decisions andthe capacity of State institutions to implementthem has improved greatly since Latvia regained itsindependence, I fully realize that the expectationsand demands of our citizens have grown just asquickly. People have grown more critical. They wishto see policy-making conducted in a professionalmanner, and they want reasoned decisions to betaken with predictable outcomes.

Decision-making should not be restricted to thecompetence of professional politicians. Politiciansmust listen to the voice of public opinion and mustbe interested in seeing increased citizen participa-tion in policy processes, as well as responsibility forone’s actions. It is a positive sign that Latvia’s six-thousandth non-governmental organization wasregistered this May, and that the participation ofNGOs is increasing in the preparation of draft regu-latory documents. The National Trilateral Co-opera-tion Council is successfully serving its role as aforum for the harmonisation of opinions with theLatvian Employers’ Confederation and the LatvianAssociation of Free Trade Unions. Any inhabitant ofthe country can now receive information on docu-ments that have been submitted or approved bythe Cabinet, by accessing them directly on the gov-ernment’s home page on the Internet.

The above reflects my subjective opinions as apolitician. In order to obtain a full and objectiveoverview of the total picture, the analyses of inde-pendent experts are vitally necessary in evaluatingthe notions and conceptions of politicians, civil ser-vants, entrepreneurs, NGOs, the mass media andother groupings. As the British author and theolo-gian G. Chesterton once wrote, practically everyonewishes to receive honest, impassionate and truthfulinformation that conforms to their opinions. Butsometimes in order to obtain an accurate pictureone must be prepared to receive honest, impas-sionate and truthful information that does not con-form to one’s opinions and even refutes them.

For several years, the UNDP-supported LatviaHuman Development Report has been the bestexample of such research available in Latvia. I canattest to this because I have personally participat-ed in the formulation of past issues as an employeeof the Latvian Ministry of Welfare. While the2000/2001 Report does contain some disputablecontentions and conclusions, its overall level ofresearch, as always, is very high. I would like tostress that the authors of this Report have takenpains not only to criticize, but also to highlight thepositive trends and to provide recommendationsfor improving policy-making in Latvia. I hope thattheir efforts will be appreciated and that thisReport will be widely used as a tool for both policyanalysis and the resolution of practical issues.

A N D R I S B ‰ R Z I ˆ Í

Prime Minister of Latvia

6

I N T R O D U C T I O N 1 1

Open and responsible policy-making as a condition for human development

What is policy? 12Basic terms used in this Report 13The Human Development Report as a partner in the shaping of open policy-making 14Structure of the Report 15Acknowledgements 15

C H A P T E R 1 1 6

Public Policy and Human Development

Introduction 16Public policy in Latvia 16

Democratic values in policy-making 16Opportunities for the public to influence policy-making 18

Public policy to date and its impact on human development 19Pension policy 19Health care policy 20Rural development policy 21Integration into the European Union 24

The negative consequences of closed public policy 25“Important” political decisions in Latvia 27The losers and losses resulting from closed policy-making 31

Developing open public policy in Latvia 33Enhancing political self-confidence 34Overcoming political biases 36Promoting participation 37Recommendations by Saeima deputies on improving policy-making 38Consolidating public accountability procedures 40

Conclusions 41Recommendations 43

C H A P T E R 2 4 4

The Public Policy Process

Introduction 44Institutional framework of public policy 44Public policy agents 45

Economic groupings 47The mass media 47Non-governmental organizations (NGOs) 48

The policy-making process according to experts 48Channels of policy influence 49Successful political decisions 49

Table of Contents

The public policy agenda 50The creation of the policy agenda 51Differences between the public and government agendas 53Privatization on the government and public agendas 53

Decision-making in the Saeima 56Decision-making in the government 59Decision-making in local governments 63Characteristics of Latvian public policy 66

The preparation and adoption of parallel decisions 67The dominance of State institutions 67The lack of transparency in public policy 67Massive, campaign-style, but short-term public participation 69Overly hasty or lengthy stages in the public policy process 69Policy without analytical substantiation 70

Conclusions 71Recommendations 73

C H A P T E R 3 7 5

The Advent of Participation in Public Policy

Introduction 75The public arena as the central domain of participation 75Legal framework of the public arena 76Public participation resources 77

Motivation for participation 78Support of institutions and like-minded persons 79Knowledge and ability to participate 79

Financial resources for participation 80The media in the public arena 82Forms of participation and public perceptions of their effectiveness 87Participation strategies 91Practical aspects of participation 94

Public participation: the example of the Ventspils Integration of Society Programme 95Monitoring of State and local government institutions: the example of the construction of parking garages in the centre of Riga 97Policy-making and the defence of interests: the example of reproductive health policy 100

Summary and recommendations 102Promoting the accommodation of public interests by State institutions 102Strengthening the ability of the public to participate 103Improving public monitoring mechanisms 103Promoting co-operation between NGOs in the defence of public interests 103

C H A P T E R 4 1 0 5

Administrative Capacity in the Context of Human Development

Introduction 105The operational capacity of Latvia’s central administrative institutions 105In search of a strategic vision 107Co-operation and co-ordination 109The public administration’s content capacity, or ability to use policy expertise 112

Policy analysis research financed by the State budget 115Independent policy analysis in Latvia 116

7

T A B L E O F C O N T E N T S

Government public accountability and reporting to society 118The public administration capacity of local (or municipal) governments 120The relationship between the decision-making and the executive powers in Latvia’s local governments 121Local government administrative capacity – education and knowledge 122Local government administrative capacity – information technology 124Public participation and accountability 125

Internal audits 126Administrative characteristics of Latvia’s smaller local governments 128Conclusions and recommendations 131

C O N C L U S I O N 1 3 4

Developing one’s own civil affiliation

A P P E N D I X 1 3 9

Review of Latvia’s Main Human Development Indicators

Gross Domestic Product 139Distribution of income 140Price changes and purchasing power of the population 141Employment and unemployment 142The demographic situation 143Health 144Education 145Conclusions 146

S T A T I S T I C A L A P P E N D I X 1 4 7

B I B L I O G R A P H Y 1 5 4

H I G H L I G H T E D I N F O R M A T I O N

1.1 Dictionary of closed policy-making 281.2 Price list of closed policy-making 302.1 The European Union as a creator of Latvia’s policy agenda 542.2 The party relationship agenda 552.3 Extreme model of a closed and illegitimate policy-making process 682.4 Petition against the privatization of Latvenergo 702.5 Hasty amendments to the Law on Pensions 713.1 Stories of motivation for participation 793.2 Journalists’ codes of ethics 853.3 Formulation of the Ventspils Integration of Society Programme 953.4 Participation attempts and mechanisms regarding the construction of parking garages

in the centre of Riga 984.1 Principles of good governance 1074.2 The National Development Plan – an attempt to create a strategic vision for the country 1094.3 Euro-integration – an example of positive horizontal co-operation 1124.4 The creation of the State Chancellery’s Policy Co-ordination Department – a step

towards ministry co-operation and integrated policies 1134.5 What is policy analysis? 1144.6 What is an independent policy institute? 1174.7 Breakdown of Latvian local governments at the end of 2000 129

8

L A T V I A H U M A N D E V E L O P M E N T R E P O R T 2 0 0 0 / 2 0 0 1

Basic facts about Latvia (2000)

PopulationNumber of inhabitants (millions) 2.4Natural increase (%) –0.8Population density (persons per sq. km.) 36.6

Population distribution (%)Rural 31Urban 69

Gender distribution (%)Males 46Females 54

Age distribution (%)0–14 years 17.8Of working age 59.9(males 15–59 years, females 15–57 years)Of retirement age 22.3

National composition (%)Latvians 57.7Russians 29.6Belarussians 4.1Ukrainians 2.7Poles 2.5Lithuanians 1.4Others 2.0

Human Development Index rank 63/174(Global Human Development Report 2000)Adult literacy rate (%) 99.8

HealthAverage life expectancy (years) 70.4Men 65Women 76Infant mortality (per 1000 births) 10.4Number of physicians (per 10,000 inhabitants) 34.4

EconomyGross Domestic Product 4333(GDP - millions of lats)GDP per capita (1995 average prices, in lats) 1243Actual GDP per capita (PPP$, 1998) 5802Actual GDP growth (%) 6.6Unemployment rate (%) 7.8

Employment distribution by sector (%)Agriculture 17Industry 24Services 59

Government expenditures (% of GDP)Total: 40.3of which: Defence 1.0 Education 6.8 Health 4.8 Social security 14.3

Average exchange rate of LVL per USD 0.606Area 64,600 sq. km.

Estonia

Russia

Belarus

Lithuania

Baltic Sea

Aizpute

Påvilosta

LIEPÅJA

Priekule

GrobiñaDurbe

Brocéni

Saldus

Kuldîga

Piltene

VENTSPILSValdemårpils

Talsi

Stende

Sabile Kandava

Tukums

Dobele

Auce

Bauska

JELGAVA

Ogreegums

Lielvårde

Ikß˚ile

RÈGA

Saulkrasti

JËRMALA

Sigulda

VangaΩi

BaloΩi SalaspilsBaldoneOlaine

AinaΩi

Salacgrîva

Staicele

Aloja

LimbaΩi

Césis

Lîgatne

Valmiera

Rüjiena

Mazsalaca

Valka

Strençi

Smiltene

Ape

Alüksne

GulbeneVi¬aka

Balvi

Aizkraukle

P¬aviñasJaunjelgava

Jékabpils

Aknîste

ViesîteZilupe

Ludza

Kårsava

Prei¬iLîvåni

R‰ZEKNEVi¬åni

Lubåna

Madona

Cesvaine

Varak¬åni

Kråslava

DAUGAVPILS

IlüksteSubate

Dagda

1 0


T A B L E S

1.1 The observance of democratic principles in Latvian institutions 181.2 Average old-age pension and subsistence minimum goods and services basket 201.3 Household income and unemployment in rural and urban areas 232.1 The most influential decision-makers and the degree of trust placed in them 462.2 Channels of political influence 502.3 The most urgent policy issues from the public’s point of view 512.4 Institutional and voter activity in submitting bills to the Saeima 573.1 The influence of the media among other participants in the political system 864.1 Manifestations of weak policy co-ordination. Factors and solutions 1114.2 Latvian ministry Internet home pages – examples of accountability 1204.3 The use of computer technology and software in Latvian local governments 1254.4 Local government activity in promoting public participation, and actual public participation

in municipal policy-making processes 127A.1 GDP dynamics by sector 140A.2 GDP per capita according to parity standards of purchasing power 140A.3 Distribution of GDP by regions 141A.4 Annual rate of inflation 141

F I G U R E S

1.1 Public policy as seen by various political agents in Latvia 171.2 Political dependency and influence in relationships between the public

and those in positions of power 191.3 Model of closed policy-making in Latvia 261.4 Model of open policy-making in Latvia 271.5 The rejected and the drop-outs in closed policy-making 321.6 Self- and mutual evaluations by members of the public, politicians, civil servants

and local government leaders 351.7 Insights by Saeima deputies on overcoming political bottlenecks 393.1 Voter participation in elections and referendums, 1990 – 2001 883.2 Forms of participation and evaluations of their effectiveness 893.3 Public participation strategies in Latvia 924.1 Local government revenues, expenditures and State subsidies in relationship

to local government size 130A.1 GDP dynamics 139A.2 Average number of employed persons in the national economy 142A.3 Changes in the number of inhabitants and their causes, 1986 – 1999 143A.4 Birth rate, death rate and natural growth of the population, 1985 – 1999 144A.5 Average life expectancy 145A.6 Division of the population by level of education 146

9

T A B L E O F C O N T E N T S

1 6

C H A P T E R 1

Introduction

This Chapter provides a general overview ofpublic policy in Latvia, and considers the results ofLatvian pension, health care, agricultural develop-ment and euro-integration policies from the humandevelopment perspective. It also analyzes manifes-tations of closed policy-making and discusses howpublic policy in Latvia could be made more open.In addition, this Chapter assesses the extent towhich individuals, non-governmental organizations(NGOs), citizens’ groups and other political agentsare involved in policy-making and implementation,and whether public interests are sufficiently takeninto consideration in public decision-makingprocesses.

This Chapter makes use of data obtained bypolling the public, deputies of the Saeima (Parlia-ment), local government leaders and ministrydepartment directors. It also uses informationobtained from interviews with politicians, businesspeople, NGO representatives, journalists and otherparticipants in the political process in order to pro-vide a comparative overview of the politicalprocesses in Latvia. Recommendations on how tostrengthen the democracy and openness of publicpolicy in Latvia are provided at the end of theChapter.

Public policy in Latvia

The term “public policy” has many faces. Of themore important components of public policy, firstand foremost are institutions, laws, political agents,values and norms, political activity, specific poli-cies, and the legitimacy of policy or its public justi-fication (the proportion of the public that accepts it,considers it legitimate and fair). The followingChapters comprehensively analyze public policy inall these aspects, but this Chapter describes it froma general viewpoint, paying special attention to theconsideration of democratic values and norms inLatvian politics.

Democratic values in

policy-making

In order for policy making to be democratic, itmust observe certain principles already recom-mended in the 1998 Report and raised again in thisReport (see Chapter 4). Policy-making must ensurethe representation of public interests in decision-making processes. It must be fair and observe theneeds of different groups, as well as the principle ofequal rights of interests. Policy-making must betransparent so that the population has access toinformation and can monitor public decision-mak-ing processes. Politicians must be responsive to theneeds and suggestions voiced by the population,be aware of the importance of participation, and beprepared to co-operate with the public. Further-more, politicians and civil servants must be capa-ble of making reasoned and far-sighted decisions,as the public is increasingly expecting them to dis-play high moral standards and competence in theiractivities.

During the ten years since Latvia regained itsindependence, Latvian politics has moved towardsthese ideals of democracy. However, as shown bythe study entitled Public Policy and Participation inLatvia, public policy still has many shortcomings inthis Baltic country. The majority of those polledfrom the general population, Saeima deputies, localgovernment leaders and civil servants do notbelieve that issues of the political agenda areopenly decided in Latvia, and that the views of allinterested groups are taken into consideration tothe greatest possible extent (see Figure 1.1).

Only every tenth inhabitant, Saeima deputy andlocal government leader polled believed thatLatvia is a country where the public supports itspoliticians and that politicians are accountable tothe public. A very small part of the population (15%of respondents) and local government leaders (21%of respondents) believe that the adoption of impor-tant political decisions in Latvia serves the inter-ests of the majority of the population. Slightly more

Public Policy andHuman Development

than half of the country’s legislators believe this(57% of respondents), while slightly less than half ofthe highest-ranking civil servants (44% of respon-dents) do so. This raises fundamental questions onthe reasons why public policy has such a lowdegree of legitimacy or public justification in theopinion of the public, politicians and civil servants,and on whose behalf it is being implemented.

When comparing the views of the public, Saeimadeputies, local government leaders and civil ser-vants concerning the characteristics of public policyin Latvia, it is evident that the main individualpolitical agents are critical of the lack of opennessand accountability in politics. However, they alsobelieve that the public wants to be involved in thecountry’s development and that mechanismsshould be introduced to increase public participa-tion in politics. This correlation of opinions revealspromising potential for co-operation and for theimprovement of policy-making in Latvia.

The public policy climate is also influenced bythe observance of such democratic principles ascompetence, honesty, accountability, transparency,and public participation. Studies for this Reportdetermined how the public, Saeima deputies andlocal government leaders assess the observance ofthese principles by the Saeima, Cabinet of Ministers,

ministries and ministry institutions, local govern-ments and non-governmental organizations (seeTable 1.1).

All respondent groups gave Latvia’s State insti-tutions the highest rating in decision-making com-petence, but the lowest rating in decision-makingtransparency. (The exception is the Saeima, wherehonesty in decision-making was rated even lowerthan transparency by all respondent groups, includ-ing the parliamentarians themselves.)

Parliamentary deputies (as well as local govern-ment leaders and the public) considered the lack ofdecision-making transparency to be most acute inthe Cabinet of Ministers, ministries and ministryinstitutions.

As opposed to decision-making in Latvia’s Stateinstitutions, all respondent groups deemed deci-sion-making in NGOs to be highly honest and trans-parent (except by local government leaders, whogave much higher ratings to transparency in theirown institutions). However, NGO competence wasrated lower than that of State institutions by bothlocal government leaders and the public.

All in all, the embodiment of democratic valuesin the activities of Latvia’s political institutionsmust be considered to be insufficient. In no casedid the number of respondents rating the activities

1 7

C H A P T E R 1

F i g u r e 1 . 1

Public policy as seen by various political agents in Latvia(% of respondents who answered “to a very large extent” or “to a fairly large extent”)

Inhabitants Saeima deputies Local government leaders Ministry department directors

Important political

decisions in Latvia serves

the interests of the

majority of the population

Latvia is a country where

politicians enjoy wide public

support and are accountable

to the public

Latvia definitely is not a

country where decisions are

made transparently and where

the views of all stakeholders

are given due consideration

The public is eager to take

part in the country’s

development

Mechanisms must be

introduced to encourage

public participation in the

policy-making process

100

90

80

70

60

72

50 %40

30

20

10

0

65

7784

9 8 8

0

1521

57

44

70

51 52

68

8184

92

80

of these institutions as honest, responsible and/ortransparent reach even half of those polled.

Opportunities for the public

to influence policy-making

In order for democracy to be effective, the pop-ulation must have the opportunity to realize its willand to influence public policy, as political decisionsoften have a direct affect on people’s lives. Themajority of inhabitants polled (78%) believe thatdecisions made by politicians affect their lives to agreat extent. Ten percent believe that these deci-sions affect their lives to a small extent, while 5%believe that they don’t affect their lives at all. How-ever, the proportion of those who believe that theycan significantly influence decisions made by theSaeima, the government and its ministries is verysmall: 6%, 4% and 5% of respondents respectively(see Figure 1.2). The majority of respondentsbelieve that their ability to influence the actions ofthese decision-makers is either slight or nonexist-ent.

Most members of the public believe that theyhave more opportunities to influence policy makingand implementation at the local government levelthan at the national level. Twenty-two percent ofthose polled believe that they can influence localgovernment decisions to a great extent, another46% believe that they exercise partial influence,while only 29% of respondents think that they haveno opportunity to influence such decisions.

Although a democratic parliamentary system hasbeen successfully re-established in Latvia, andalthough various forms of public participation aregradually emerging, relations between the country’scivil society and State institutions are generally char-acterized by “scissors” of political dependency andinfluence. In general, the population does not believethat it has the opportunity to apply political influ-ence. This is largely due to the fact that politiciansand civil servants do not sufficiently practise proce-dures of democratic openness, and is compoundedby a low level of public participation in decision-mak-ing. More open decision-making processes must beestablished in Latvia at all levels of governance, andthe specific forms of political participation available tothe public must be used more widely.

1 8


Evaluators

The publicSaeima deputiesLocal government leadersThe publicSaeima deputiesLocal government leadersThe publicSaeima deputiesLocal government leadersThe publicSaeima deputiesLocal government leadersThe publicSaeima deputiesLocal government leaders

Honest

145425184022163723324995377458

Competent

398558458357337756456982334038

Responsible

245730276039215426406093354640

Transparent

19582817171715209283279295439

“To what extent is decision-making by the following institutions honest, competent, responsible and transparent?”

T a b l e 1 . 1

The observance of democratic principles in Latvian institutions(% of respondents who answered “to a very large extent” or “to a fairly large extent”)

Institutions

The Saeima(Parliament)

Cabinet of Ministers (government)Ministries and institutions under their supervision Local governments

Non-governmental organizations

Public policy to date and

its impact on human

development

There are practically no public policy issues thatdo not affect human development. This Chapteraddresses Latvia’s pension policy, health care poli-cy and rural development policy, and their impacton human development in the country. Thesespheres of public policy have a direct impact onsuch important human development indicators asthe welfare of the older generation, public healthconditions, life expectancy of the population, andopportunities for the rural population to lead aquality life.

On the other hand, integration into the Euro-pean Union (EU), which is also analyzed in thisChapter, is considered to have an indirect affect on

human development. While this Chapter does notfully evaluate the efficiency of these policies, itdoes note that policies directed towards the reformand strengthening of these systems may not neces-sarily result in a considerable rise in the quality oflife of the population, or alter the effects on con-sumers of public services. In realizing specific poli-cies it is important to achieve co-operation amongthe groups targeted by these policies.

Pension policy

Pension policy in Latvia is crucial from a humandevelopment context, as more than a quarter of thepopulation receives old age pensions (27.1% at theend of 2000, compared to 26% at the end of 1999).Due to the ageing trend of Latvia’s inhabitants,pension policy may serve to promote generationsolidarity, as well as the responsibility of the work-ing generation to provide for its old age. Since 1995the pension system has seen great changes, noneof which have helped much to improve the livingconditions of pensioners.

In 1996 a new method for calculating pensionscame into effect. Pensions are now calculatedaccording to the income of socially insured personson which social tax has been paid. A three-tieredpension system is gradually being introduced,where the first level encompasses a small State-guaranteed minimum pension. The second levelincludes individual pension accounts to whichmandatory individual social insurance paymentsare made (in effect since July 1, 2001). The thirdlevel includes voluntary savings in pension funds(in effect since 1998).

The pension system in Latvia has changed dra-matically and its role as a distributor and equalizeris diminishing. It has been cited as an example forother Central and Eastern European countries to fol-low. According to the Ministry of Welfare and theWorld Bank, Latvia was the first country in thisregion to begin reforming a pension system inherit-ed from the Soviet regime. Initially based on gener-ation solidarity, it is changing to a system of pensionfunds and insurance payments. However, Polandand Hungary have now overtaken Latvia in reform-ing their pension systems. This is due to delays inintroducing second-level pension funds in Latvia,along with public distrust of third-level private pen-sion funds and the fact that these reforms havehardly affected actual pension amounts.

1 9

C H A P T E R 1

F i g u r e 1 . 2

Political dependency and influence in relationships between the public and those in positions of power(% of population polled)

Not at allTo a small extentTo a large extent

100

90

80

70

60

50

40

30

20

10

0

Decisions made by politicians affect your life

People have the opportunity to influence decisions made by

the Saeima


the Cabinet of Ministers


ministries and ministry institutions


local governments

654

2210

5

30

575451

46413736

78

At the level of the individual pension recipient,progress has been quite modest indeed. The mainindicator of changes in the Latvian pension systemis the increase in pension amounts, which manifestsitself in the form of pension indexing. The averageincrease in old age pensions has not been large. In1997 pensions rose by 4.25 lats, in 1998 by 9.02 lats,in 1999 by 7.35 lats and in 2000 by only 0.84 lats.

The average Latvian pension still remains con-siderably below the value of the minimum goodsand services basket, although the differencebetween these two indicators is steadily diminish-ing (see Table 1.2).

Pension reform has succeeded in ensuring asustainable pension system in Latvia, to a certainextent differentiated according to the amount ofsocial tax paid by the individual, and in line withavailable financial resources. The reform of thepension system has been more rapid than animprovement in the situation of pension recipients,partly because reforming such a system requiresmuch less financial resources than improving thegeneral welfare of such a large group of the popula-tion.

The gradually diminishing difference betweenthe amount of the average pension and the mini-mum consumption basket shows that the presentpension system has the potential to significantlyimprove the welfare of a large part of the popula-tion, and thus promote human development as awhole.

Studies show that even now Latvian pensions,however small, still offer a stable source of incomeand place pensioners in a better situation thanother groups of the population. The future effec-tiveness of the pension system in the context ofhuman development will largely depend on how

well the population is informed on the proceduresfor calculating pensions, so that the people them-selves can consciously decide on their expectedold-age security.

Health care policy

Latvia’s health care system has also undergonesignificant reforms since the beginning of the 1990s.One of the main accents has been placed on chang-ing the financing of health care. This is a very impor-tant issue because, as already indicated in the 1997Report, the insufficient financing of health care, theinability of the poor to pay for medicines and treat-ment, and the low standard of living have led to adeterioration in overall health levels not only inLatvia, but also in other European transition coun-tries.

In 1997 mandatory national health insurance wasintroduced, along with a list of minimum medicalservices covered by the State. Patients also cover asmall portion of service costs in the form ofpatient’s fees. Medical service funds from the Statebudget are administered by the National Mandato-ry Health Insurance Agency, which divides themamong eight territorial insurance funds. However,the resources at the disposal of these health insur-ance funds are not sufficient to cover health careexpenses. Hospitals are already turning awaypatients who have applied for elective surgery orother planned treatments. The modest funds of thenational budget are sometimes supplemented onan unofficial level by the patients themselves,resulting in corrupt practices at Latvian medicalfacilities. A study by the Delna branch of Trans-parency International showed that 25% of respon-

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T a b l e 1 . 2

Average old-age pension and subsistence minimum goods and services basket

Year

Average old-age pension (in lats)Subsistence minimum goods and services basket value (in lats)Percent ratio of average old-age pension to subsistence minimum basket value

1996

38.3073.78

52

1997

42.5578.78

54

1998

51.5782.15

63

1999

58.9283.18

70

2000

59.7684.47

71

dents who had been treated at medical facilitiesadmitted to engaging in bribery or other unofficialforms of payment in order to receive better or morerapid medical services.

While a health care system has indeed beenestablished with the potential to cover the costs ofmedical services, the lack of funding allocated fromthe national budget and the low level of healthinsurance activity among the population shows thatany significantly positive effect by this system onhuman development indicators may only beexpected in the distant future.

The introduction of family doctors in the placeof local general practitioners represented a signifi-cant element of reform in primary care. Eighty per-cent of the Latvian population has registered withfamily doctors, and two-thirds of those registeredare satisfied with their doctors’ services. Primarymedical care, which is generally provided by familydoctors, has been evaluated as either good (33% ofrespondents), or satisfactory (19% of respondents)by over half of those polled. However, every thirdmember of the population considers the level ofcare provided by family doctors to differ little fromthat which was formerly provided by local generalpractitioners.

Parallel to reforms in the health care system,some positive trends can also be observed in thepopulation’s self-assessment of health. A poll car-ried out in February 2000 showed that 40% of thosequestioned considered their health to be eithergood or fairly good (compared to only 25% in 1994),43% considered it to be average (compared to 49%in 1994), and 16% considered it to be bad or fairlybad (25% in 1994).

However, these gradual improvements havefailed to prevent some serious health care prob-lems. The 2000 Social Report states that 48% ofthose polled do not visit a doctor even when illbecause they lack the funds for treatment. One-third of those polled can find the means for treat-ment only with great difficulty in the case of seriousillness. And less than one-fifth (19%) can affordtreatment without worrying about having enoughmoney left over for other needs.

The low wages of medical personnel are anotherserious problem. In March 2001 a protest by thecountry’s registered nurses drew a great deal ofpublic attention. Many nurses have expressed thereadiness to leave Latvia and to work at medicalfacilities in other countries, due to their low pay andthe perceived lack of respect for their profession.

The difficulties experienced by health insurancefunds show that in contrast to the pension system,Latvia’s health care system is not yet stable and itssustainability is not guaranteed. At the level of theindividual recipient of health care services, nomeaningful progress can be observed. HereLatvia’s macro-economic indicators play a signifi-cant role. The country’s GDP began to grow rapidlyonly recently, the unemployment rate continues tobe high, and national budget funds for the healthcare system are limited. Thus, the overall econom-ic condition of the country is and will continue tohave a deciding impact on public health conditions.

Rural development policy

The development of Latvia’s rural areas, smalltowns and regions is essential in order to assureequal opportunities to the entire population, andhas already been discussed in the 1997 and 1999Reports. This Chapter considers Latvia’s existingrural policy from the human development perspec-tive, based on an analysis of the country’s RuralDevelopment Programme.

Latvia’s Rural Development Programme wasdrawn up in 1998 by the Environmental Protectionand Regional Development Ministry, in co-opera-tion with the ministries of Agriculture, Educationand Science, Transport, Welfare, and Culture, aswell as scientists, local governments and ruralorganizations.

The programme was approved by the Cabinet ofMinisters and the Saeima. It was designed to reducerural problems and lessen the large difference indevelopment levels between Riga and the ruralareas. The programme provides diverse and sus-tainable rural development goals, and draws atten-tion to the fact that rural development encompass-es not only farming, forestry and fishing, but alsoother types of business. The programme encour-ages the diversification of the rural economy, envi-ronmental protection, and the provision of educa-tional, cultural and health care services for ruralresidents. The programme has two particularlyimportant goals from the human development per-spective: the reduction of rural poverty and theincrease of employment opportunities.

To achieve these goals, the programme encom-passes several sub-programmes, such as Agricul-ture, Education and Culture in Rural Areas, HealthCare in Rural Areas, the Rural Road Programme, and

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C H A P T E R 1

others. These are to be implemented by the rele-vant ministries in charge of each particular area.

However, a unified rural policy system has yet tobe established. As opposed to pension policy andhealth care policy, rural policy is scattered amongdifferent institutions. This is reflected in the varioussources that finance it, mainly: the national budget(under ministry programmes) a World Bank loan(under the rural development project), and techni-cal assistance from other countries.

Last year 45.6 million lats were diverted fromthe national budget for the rural development pro-gramme, compared to 34.8 million lats in 1999.About half of this amount (51.3%) consisted of finan-cial support from Ministry of Agriculture pro-grammes for agricultural production, and from Min-istry of the Economy programmes for business andmunicipal projects. 37.7% was invested in the infra-structure and environment of specific populatedareas under Ministry of Regional Development andEnvironmental Protection programmes. About 10%was spent on the development of human resources,mainly to promote employment and training of theunemployed, and carried out by institutions of theMinistry of Welfare. Slightly less than 1 percent wasdevoted to other expenditures.

Each ministry implements its part of the RuralDevelopment Programme independently, anddiverts funds to rural areas under specific sub-pro-grammes. Thus the Rural Development Programmeis essentially a mechanical compilation of differentministry programmes, which do not result from a co-ordinated policy. The same may be said for theinstitution monitoring the Rural Development Pro-gramme – the Regional Development Council –which is made up of Ministers, Saeima deputies andrepresentatives of the Association of Local Govern-ments. The activities of this Council have beenrather formal, and have failed to generate a long-term vision. Although the funds diverted intoLatvia’s rural development have been fairly signifi-cant, the eclectic structure of the Rural Develop-ment Programme and the inefficiency of its man-agement have made it difficult to monitor thefunding and to evaluate the results.

The largest amount of national budget funds isdiverted to rural areas through the Ministry of Agri-culture. This year 20.56 million lats are to be allo-cated in agricultural subsidies, compared to 19.93million lats in the year 2000. During recent years atrend can be observed in the use of subsidies tosupport rural education, research, non-traditional

farming and rural environmental projects. Basically,however, agricultural subsidies are intended toraise the competitiveness of each particular sector.

In Latvia only a limited number of farmers andprocessing plants (namely, the most successfulones) receive agricultural subsidies. Eighty per-cent of Latvian subsidies go to large farms and only20% of all Latvian farms receive subsidies. This80:20 proportion also exists in the EU countries andis being subject to increased criticism. While sucha policy does promote modernization andimproves the conditions of the economicallystronger farmers, it may also lead to increased ruralunemployment as smaller farmers drop out of thebusiness.

The amount of funds diverted to rural educa-tion, employment and poverty reduction projects isinsufficient. Additional resources are needed tosupport community initiatives and innovative proj-ects, as this would help rural residents to overcomethe widespread poverty that has led many peopleto sink into depression or move into towns wherethere are better opportunities.

A step towards a more integrated rural policywas observed in 2000 - 2001. The Latvian Ministryof Agriculture has now become the principal co-ordinator of the country’s Rural Development Pro-gramme. The Ministry has assumed the politicalwill to address the country’s serious rural problemsand to promote rural development in Latvia as awhole. It will also administer the EU’s pre-acces-sion structural funds for agriculture and rural devel-opment. The Ministry prepared and submitted arural development plan to the EU last year, indi-cating five directions for agricultural and ruraldevelopment in Latvia during the pre-accessionperiod: investment in agricultural business,improving food processing and expanding market-ing, diversifying farm production, improving therural infrastructure, and promoting environmental-ly friendly farming methods. The government con-siders this rural development plan to be one of themost important instruments of the Latvian RuralDevelopment Programme.

A number of non-governmental organizationsare active in Latvia’s rural areas, including theFarmers’ Federation, the Farmers’ Saeima, the YoungFarmers’ Club, the Rural Support Association, theAssociation of Agricultural Statute Companies, andsome 40 agricultural sector associations. A Farmers’Co-operation Council was established in 2000 todraft legislation for the Ministry of Agriculture and

2 2


to promote openness and participation in addressingrural problems. Unfortunately, the interests of farm-ers from all regions are not represented in theCouncil.

The Cabinet of Ministers has charged the Min-istry of Agriculture with drafting a long-term concepton Latvian rural development that is intended tolink rural needs to actual funding. However, repre-sentatives of other ministries have expressed con-cern at whether the Ministry of Agriculture, as co-ordinator, will sufficiently consider non-agriculturalaspects. The Ministry of Agriculture should ensurethat its previous agricultural focus does not becomean obstacle to developing an integrated rural poli-cy. The ministry lacks sufficient experience in work-ing with NGOs from other sectors that represent abroader section of the rural population.

All in all, the implementation of the Rural Devel-opment Programme has not been satisfactory,mainly because no positive effect on the welfare ofrural residents can be observed. The actual incomeof the rural population has actually decreased (seeTable 1.3 and the analysis in the Appendix), andemployment, education and health care indicatorshave not improved. In a number of rural regions(Balvi, Kråslava, Prei¬i and Rézekne) the registeredunemployment rate has been consistently high andexceeds 20% of employable residents.

The insignificant impact of the Rural Develop-ment Programme on rural residents permits one toreach several conclusions.

The implementation of the programme is madedifficult not only by the depth of the country’s ruralproblems, but also by the lack of policy alignmentand co-ordination between the ministries thataddress rural problems.

Rural policy is obstructed by an erratic regionalpolicy and a delay in administrative territorialreform.

The main directions of the Rural DevelopmentProgramme, which would enable the execution of aconcentrated rather than a diffused policy, have notbeen declared on a national scale.

Rural policy is dominated by agricultural policy.Education, rural innovations and the introduction ofnew technologies have not received sufficientattention or funds.

However, some signs of open policy-making canbe seen in the implementation of the Rural Devel-opment Programme, through consultations with var-ious rural organizations. Nevertheless, future ruralpolicy should be even more decentralized, and theequal participation of rural organizations from all ofthe country’s regions must be attained.

Recently rural residents have been appearing todisplay increased self-confidence in the form ofrural initiatives and participatory efforts in address-ing community problems. Rural policy must sup-port such local initiatives.

Latvia needs to take a new look at its rural poli-cy, which must promote communication, educationand innovative projects in rural areas. The estab-lishment of rural development partnerships mustbe supported, along with community developmentprojects and regional co-operation. The distribu-tion of the 40 - 50 million lats presently allocated torural development sub-programmes should be re-evaluated in order to divert more funds towards thedevelopment of human resources, the introductionof new technologies, and community co-operationprojects. Latvia consists not only of the capital cityof Riga, but also of other regions and rural areas. In

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C H A P T E R 1

T a b l e 1 . 3

Household income and unemployment in rural and urban areas

Year

Monthly income per household member (in lats)Rural income compared to urban incomePercentage of job seekers among economically active residents

1996

47.7153.119010.821.3

RuralUrban

Rural*Urban

1997

49.8657.80866.917.6

1998

51.4067.26767.416.4

1999

50.3970.937110.716.0

2000

52.1376.696810.816.0

* The monitoring of the labour force in accordance with International Labour Organization methodology reveals that

those rural residents who work their own land and have not registered as unemployed usually do not consider

themselves to be unemployed, even though they may not be working outside of their own farm.

order to provide equal development opportunitiesto the entire population, rural development fundsmust be significantly increased and rendered moregoal-oriented.

Integration into the European

Union

The 1999 Report found that the scale of eco-nomic, social and cultural opportunities availableto Latvia’s inhabitants is changing under the Euro-integration process, and that interaction on aninternational scale is significantly increasing. Theupcoming integration of Latvia into the EuropeanUnion will have an impact on many importanthuman development indicators, such as GDP percapita, social security and education opportunities.

Although free-market capitalism is widespreadin the world, competition between countries andregions is increasing, and as a result social issuesare sometimes ignored. The EU has accepted thetradition of the majority of European countries,tested by experience, to consider social welfareas a basic asset and precondition for peace, sta-bility and development. Among the central con-cerns of the EU’s social policy are employment,the free movement and legal relations of labour,social security and the protection of the labourforce, safe working conditions, gender equality,and public health. In some of these areas, such assafe working conditions, the EU has very detailedregulations.

Two important challenges from the Euro-inte-gration and human development perspective aregeneral economic growth and the impact of thecommon market on social indicators. Projectionson the rapidity of the EU’s economic growth fol-lowing its eastward expansion are contradictory. Ifeconomic growth is rapid, then it will createfavourable conditions for human development inLatvia and other European countries. If, on theother hand, economic growth is slow, then Latvia’sintegration into the EU may not fulfil hopes for arapid increase in people’s quality of life. Regard-less of the projections, such European politicalsectors as the internal market, energy, transportand others are targeted to promote economicgrowth and thus, human development.

Another challenge lies in protecting andstrengthening the social guarantees of the popula-

tion under conditions of increasing competition. Incertain cases competition may encourage furtherinequality among the inhabitants of the EU’s can-didate countries. The conditions of economicallyweak farmers may deteriorate even further, whileeconomically stronger farmers should benefitbecause they will be able to make use of opportu-nities offered by new European markets.

On the other hand, the EU’s legal environmentcould strengthen the interests of the most vulner-able social groups. Two EU basic documents – theTreaty of Rome and the Treaty of Amsterdam –stress the inter-dependency of the economic andsocial spheres. In 1989 the European Counciladopted the Charter of Basic Social Rights of theCommunity, which recognizes many basic socialrights, such as the right to a professional educa-tion, employees’ right to training, consultation andparticipation in decision-making, etc. However,the Charter is not legally binding and can only beconsidered as a manifestation of political will.

Some researchers believe that in Latvia andother associate countries the average person’sopportunity to benefit from integration into the EUwill depend to a great extent on the quality andopenness of internal decision-making in each coun-try. Many important labour and social rights issuesare still addressed within the individual memberstates. Both during the pre-accession period and asa full-fledged member country, Latvia will haveaccess to financial support for such social aims asthe reduction of long-term unemployment, particu-larly among young people and minorities. There-fore the ability of Latvia’s administrative structuresto apply financial resources effectively will be ofdecisive significance.

While Latvia’s membership in the EU offersgreat potential for promoting human development,one must also be aware of the risks resulting fromincreased competition. Unfortunately, it is difficultto accurately assess the impact of Euro-integrationon human development in Latvia over the longerterm. There is reason to believe, however, thatoverall this impact will be positive.

During its accession negotiations with the EU,Latvia should pay particular attention to factorsthat may threaten the conditions of specific socialgroups. If necessary, debates should be encour-aged with these groups and attempts should bemade to achieve solutions that will be of greatestbenefit to them.

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The negative consequences

of closed public policy

The publication Latvia Human DevelopmentReport 200/2001 strongly espouses an open pub-lic policy, under which a large community of poli-cy makers – which includes not only political lead-ers and State administrators, but alsonon-governmental organizations, interest groups,professional associations, independent expertsand other political agents – is involved in policy-making and implementation.

Open policy-making leads to an improvementin the quality of decisions, their more effectiveimplementation, and an increase in their legiti-macy, which works to the advantage of the entirepopulation. Open policy-making does not meanthat every individual must be active in politics atevery single moment. But it does mean that effec-tive mechanisms should be in place for people tobecome involved in decision-making processesand to achieve the consideration of their inter-ests.

In Latvia, public policy is marred by a stronginclination towards seclusion. Closed policy-mak-ing is marked by several features: a small numberof decision-makers, considerable influence bybusiness groupings in the decision of politicalissues (a factor that may be linked to corruption),a lack of transparency in decision-making proce-dures, and a disregard for public interests. ThisChapter analyzes and criticizes the manifestationsof seclusion in politics, keeping in mind, however,that as a whole the public policy process in Latviais still fairly open.

A study of public policy and participationshows that important political issues in Latvia areoften decided by a few people rather thanthrough democratic debate. Leaders of businessgroupings, together with political leaders and theso-called éminences grises or “grey cardinals” whooperate out of the public limelight, often decideimportant national issues in which various groupsof the public should have an input. The moreclosed the political decision-making process, themore restricted it is to a limited circle of individ-uals, and the more other policy makers arepushed away from influencing the final outcomeof decisions (even members of the ruling partiesand “rank and file” parliamentary deputies).

A summary of models of closed and open pol-icy-making in Latvia is shown in Figures 1.3 and1.4. These models were based on interviews withpolitical party leaders, parliamentary deputies,business people, NGO representatives, and jour-nalists. They illustrate the environment and pro-cedures of important decision-making, and showthat both closed and open decision-makingmechanisms exist in Latvia. Although the modelsare generalized figures, they are analogous withsituations existing in political practice.

There are several issues in Latvia where deci-sion-making tends to be closed. As a rule theseconcern such crucial economic subjects as privati-zation, the regulation of monopolies, the regulationof the most profitable types of business, and otherquestions affecting the interests of large companiesand business groupings. Closed decisions in suchcrucial economic issues are anti-democratic,because they affect the interests of the entire pop-ulation and demand public debate.

Although different politicians and experts, inde-pendently of each other, almost unanimously nameda select few persons who often rule on importantpolitical issues, closed policy decisions in Latviacannot be identified directly with specific partiesand specific politicians. Rather, the closed policymechanism operates as a relationship betweenparty financiers and political leaders that is con-cealed from both the public and the media and isdifficult to monitor. Its nucleus is a tripartite commit-ment between business groupings (party financiers),political leaders and the so-called “grey cardinals.”Such relationships ensure the advancement of theinterests of party financiers in political decisions,and often serve to satisfy the hidden interests of thepoliticians involved in such decisions.

Closed-style politics is also abetted by institu-tions of power established by the ruling parties, butthat are for the most part extra-parliamentary, suchas coalition and co-operation councils, and the pro-portionate representation of the ruling parties onthe boards of large state enterprises. These mecha-nisms help the ruling parties to protect their influ-ence and monitor each other, but as a whole theydo not promote open policy.

Tendencies of seclusion also come to light whenanalyzing political discourse, namely the politicallexicon, speeches and expressions of those peopleinvolved in deciding important issues or who arewell-informed about them (see Information 1.1).Political discourse shows what people think about

2 5

C H A P T E R 1

politics, how they think and act within it, and whatthey think should or should not be done in politics.This discourse reflects many expressions of seclu-sion in political practice.

The economic basis of closed decision-makingin Latvia is largely linked to the departing model ofthe economy, and is characterized by an orientationtoward the CIS markets and demands for extensivegovernment protectionism. Those businesses thatexercise particular influence in politics are usually

joint stock companies that are actually owned by asmall circle of individuals. Therefore closed deci-sions often depend not only on the economic inter-ests of these companies, but also the personalviews of their owners. Those business peoplewhose companies are most often cited as the mostinfluential business groupings, tend to publiclydownplay their actual political influence, andexpress the view that decisions in Latvia are adopt-ed as foreseen by the laws of the land.

2 6


Criticism by international organizations of administrative shortcomings in Latvia

Public distrust of politicians and problems of legitimacy of power

Qua

rrel

s am

ong

pol

itic

ians

and

inef

fect

ive

pol

icy

Imp

act

on p

olic

y b

y co

rpor

ate

bus

ines

s

F i g u r e 1 . 3

Model of closed policy-making in Latvia

Weak links and influence Strong links and influence Closed borders Open borders

Political leaders

Business groupings and party financiers

“Key figures” and “grey cardinals”

Closed decision-making generates an environ-ment where corruption can thrive. A World Bankstudy published in 2000 on the spread of corruptionin the Central and Eastern European countries rec-ognizes that corruption concerning issues of nation-al importance in Latvia most often manifests itself asthe influence of economic groupings in governmentdecisions, pressure on parliamentary deputies, thesale of deputies’ votes regarding parliamentary leg-islation, and the lack of transparency in the financingof political parties. The potential for corrupt prac-

tices to occur in cases of closed decision-making isalso evidenced by the following examples of politi-cal discourse (see Information 1.2).

“Important” political

decisions in Latvia

Among politicians in Latvia it is customary todivide public policy issues into “important” and “less

2 7

C H A P T E R 1

F i g u r e 1 . 4

Model of open policy-making in Latvia

Weak links and influence Strong links and influence Closed borders Open borders

Transparent lobbies

Media

Sectoral and professional associations

Localgovernments

NGOs and citizens’ groups

Scientists, policy analysts and

experts

Stat

ead

ministrative institutions

Politicalleaders

Private sector organizations

Globalization and Euro-integration

Every-day life of the people

Goa

ls o

f su

stai

nab

le h

uman

dev

elop

men

t

Cul

tura

l her

itag

e an

d d

emoc

rati

c tr

adit

ions

in L

atvi

a

2 8


I n f o r m a t i o n 1 . 1

Dictionary of closed policy-making

The following expressions characterize closed policy-making, and were obtained in interviews with politicians, Saeima deputies, “grey cardinals,” NGO leaders, business people, and media representati-ves. The language of the respondents has been retained in the expressions, with quotes placed in quotation marks, and the meaning of each quote is described in the context of the interview. The profession of each speaker has also been identified. These quotes do not refer to the entire political process, but only to cases of closed decision-making. The veracity of the expressions has not been verified. Most of the people interviewed were negatively disposed to manifestations of seclusion in deciding issues of importance to the public.

Word or group of words“10, 40, 50, 80 people”

“Depending on the [telephone] call”“Key figures”

“Outside the Saeima”“Quickly or not at all”“Business lobbying”

“Tit for tat”

“Among friends”

“Economic groupings”

“Yes, yes, yes!”

Context, meaningThis number of people is mentioned as the main circle of political decision-makers: “There are some 10 people among the ruling parties who in fact decide everything, and they are pressured by another 10 people. Altogether there are no more than 40 to 80 people who decide policy.”“If political decisions affect important economic interests, then they are made by a narrow circle, depending on the [telephone] call.”An often-used group of words. Usually it describes the most influential people within the political parties. They may be officials, party and parliamentary faction leaders, or influential persons within the parties who do not hold official posts, as well as representatives of economic groupings influencing the leadership of parties. “They describe themselves as party leaders, while others call them grey cardinals.” One of the main functions of such key figures is to consolidate the links between parties and party financiers.“During recent years the centre of gravity in making important decisions has moved outside the Saeima to the coalition. This is bad for openness.”“Decisions affecting the interests of large business groupings are made either incredibly quickly or not at all.”“Specifically co-ordinated initiatives were taken by several deputies in adopting the law on sugar.” “I believe that it manifests itself as rather blatant lobbying on the part of individual deputies or factions.”“Pay your money before the elections and then cash your dividends in the decision of important issues.”“Important decisions are made among friends, who are linked by friendship and financial ties.”A group of words often used by politicians and experts to describe the political environment. Usually no more than three or four “large groupings” are named, indicating a sector (oil, transit, banking), ethnic background or the geographic orientation of operations (“eastward”). At times it is admitted that “new economic groupings are emerging, who wish to gain more influence in politics.”A Saeima deputy answering the question: “Are there significant differences in the decision-making process when important decisions affecting the interests of large business groupings are made?”

SpeakersPoliticians,NGO representatives

Saeima deputy

Politicians, business people, NGO representatives

NGO leader

Saeima deputy

Saeima deputies

Media representativeGovernment officialPoliticians, business people, NGO representatives

Saeima deputy

important” categories, not according to their publicimportance but rather according to whose influen-tial business interests are affected. Often “the mostimportant political issues” are those that are so consid-ered by corporate business. Issues that affect thepublic sector and social policy (for example, socialinsurance reforms, health care, educational issues,

poverty reduction, etc.) and that do not directlyaffect business interests are usually classified as“not as important” or “also important.”

Such an approach to rating the importance ofpolitical issues and drawing up the political agendadiscriminates against public interests in twoaspects. First of all, the criteria of a policy’s impor-

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C H A P T E R 1

I n f o r m a t i o n 1 . 1 ( c o n t i n u e d )

“Peculiar decisions”

“Influence of money”

“Money bags”

“Not for nothing”

“Unexpected coincidence”“Official and unofficial channels”

“Short-cuts”

“Party centralization”“Grey cardinals”

“Privileges in privatization”

“Visible and invisible decision-makers”

“Closed circle”

“The most important decisions”

“In the right hands at the right moment”

“There are many peculiar and absurd decisions. We see them but do not really understand them. But it is important to understand them, because that’s where the money is.”“The influence of money in politics has reached dangerous proportions and there are no arguments to regulate it.” “As we know, important decisions may be influenced by money - absurd decisions.“In Latvia important decisions are influenced by the chief money bags - those throwing money around and considering it as a tool for achieving policy.”“People who act as party sponsors and decision-makers do not do it for nothing.”“A solution beneficial to Latvia is reached only as a result of an unexpected coincidence, for example, in the election of Latvia’s President.”“Decisions may be influenced through official or unofficial channels. Officially one can write letters, offer recommendations, or involve the press, but practice shows that personal contacts and unofficial meetings are often more important.”“Making short-cuts - achieving the adoption of favourable decisions by giving a direct bribe.”“In many parties the decision-making process is centralized and ignores the opinions of individuals. Therefore the votes sometimes reveal surprising results”“The grey cardinals are people who do not hold officially visible positions, but sit on boards and centres of influence and feed on these. I was a grey cardinal myself.”“Of course, there are considerable differences in decision-making, because Government commissions and privileges in privatization are granted to groupings who have previously financed the decision-makers.”“Visible decision-makers are the Parliament, its deputies, the Cabinet of Ministers and members of the government. The invisible decision-makers act when decisions are made in a peculiar way. At that point it comes to light that deputies are the owners of homes and property.”“Agreement on person A was reached in a closed circle. Agreement on person B will also be reached in a closed circle. Afterwards the Saeima will play out democracy.”“The most important decisions are those of an economic nature. They are linked to privatization and to the establishment of new institutions to which the government is attached. Less important issues related to the budget are decided by the Cabinet of Ministers.”“Put it all together in a package and bring it to me. I will place it in the right hands at the right moment. The process has taken off and there can be no further delay.” A “grey cardinal” answering his cellular telephone during an interview.

Media leader

Politician,journalist

Party leader

Government officialBusinessman

NGO leader

Businessman

Saeima deputy

“Grey cardinal”

Saeima deputy

Businessman

Party leader

NGO representative

“Grey cardinal”

3 0



Price list of closed policy-making

The following price list of closed policy-making illustrates expressions heard during interviews with politicians, NGO representatives, business people and journalists on how money influences the decision of important issues if they are made in a small circle. The price list does not prove anything in relation to specific cases of corruption and may not be attributed to the decision of all political issues. It does show, however, how political agents interpret the role of money in politics and what amounts they attribute as equivalent to specific political services. The price list does not legally prove facts of corruption, but is merely a linguistic diagnosis of corruption and indicates that corruption is a real problem in Latvian politics. All of those who provided the following quotations condemned the existence of corruption.

Price (money, user value, corrupt practices)“2000, 5000, 10,000 (in both lats and dollars)”“New car”

“25,000 lats”

“100,000 lats”

“A new house”

“1 million lats”

“3 million lats”

“Five shipments of smuggled fuel”“15 million US dollars”“Give to key figures”

“Hunting together”

Political equivalent (what it can buy in politics)“Two thousand, sometimes five or ten - in lats or dollars. It’s all the same to them.” An indignant businessman complaining about corruptible politicians.“I see a new [type of car] in the Saeima parking lot, where a month ago there was an old Opel. That wagon costs something. I try to recall what has happened recently. Aha! There was indeed an important vote!”“Certain party deputies do not have free voting options. Their hands are tied by 25,000-lat agreements on the violation of party discipline.”“Those who generate a large smuggling operation, for example, worth five or six million, can certainly allocate a million to bribe politicians. They donate 100,000 lats to each party, and give out 10,000 lats to individual people. What is that compared to five million?”A new house in a respectable area is becoming an object of desire for consumer-type politicians and often motivates their political activities. The value of the house may indicate the price of corrupt politicians and government officials and evidence a peculiar threshold of political corruption. “Politician X is building a house in the name of a relative, but lives like a simple worker in a rented apartment.”“A very good house can be built for 100,000.”“Houses are indirect cases that are now surfacing.”“Politics is becoming more expensive. Before the previous Saeima elections our party spent about a million. The municipal elections [in 2001] will cost more.”“When talking about the robbing of the country, one is reminded of the [Latvenergo] three million affair. “Nobody actually stole that amount directly, but many were there when it happened and the money did go somewhere.”“I don’t know how much this country costs! Two or maybe five shipments of smuggled fuel!”“Lattelekom’s lawyers were paid 15 million. There is talk that afterwards smaller amounts were transferred to party treasuries.”“For the most part [money] is given to individual key figures, and in larger amounts. Smaller amounts are given to parties.”“Money ties them together. This week a hunting club will be opened, owned by company X. Politicians A and B will also be there. They should not be. It is clear that money is involved there!”

SpeakerBusinessman

Journalist

Saeima deputy

Representative of a sector association

A politician from another political party

BusinessmanJournalistParty leader

NGO representatives

Saeima deputy

NGO leader

Politician

Government official

tance are set to suit the interests of a small circle ofpeople, and secondly, public priorities, as well asthe principle of public debate, are not observed.

The manner in which issues are divided into“important” and “less important” categories also deter-mines how they are decided. If the issue at hand isclassified as “economically important,” then decision-making is executed in closed channels. If, however,politicians interpret an issue as “less important” or “ofpublic importance,” then open procedures are widelyapplied. Various studies are carried out before res-olutions are drafted. These resolutions are then putto public debate, NGOs are consulted, etc.

The losers and losses

resulting from closed

policy-making

Closed policy-making does not promote sus-tainable development because it does not pro-mote a balance between individual and collectiveforms of human development, or between privateand public interests (see Figure 1.5). Democracyrequires some form of harmonization between theprivate and public arenas. In the private arena peo-ple form their individual identities and satisfy theirindividual interests. However, ties of solidarity toother individuals and a common identity shaped byvarious forms of participation in the public arenaare also important (see the analysis of Chapter 3).

The public manifestation of individual interestsand identities, as well as their complete realizationand proportionate balancing, is only possible in thepublic arena. The public arena permits the realiza-tion of the common good, and the fulfilment ofinterests that cannot be met individually (the needfor a legal environment, social security, etc.). Public

policy acts as a mechanism for the co-ordination ofinterests and identities in the public arena. Thistask is best performed when policy-making is dem-ocratic and open.

If policy-making is closed and important issuesare decided within a narrow circle, then other poten-tial participants are rejected from the decision-mak-ing process, mainly interest groups, NGOs, sectoraland professional associations, policy analysts, andthe opposition. This leads to a narrowing of the pub-lic base for deciding issues, and the entire spectrumof interests of civil society is no longer properly rep-resented in the decision-making process. As certaingroups of the public “drop out” of decision-makingand political leaders show bias in favour of businessinterests, the public arena is reduced and the inter-ests of specific groups begin to dominate over theinterests of other groups.

Closed policy-making may serve specific busi-nesses and party financiers, but it does not servebusiness as a whole, because some businesses willexercise greater influence on economic policies,while many others will be rejected – particularly thesmall and medium-sized ones, which do not appearattractive to politicians as sources of funding fortheir parties. In such cases policy-making also failsto consider the views of sectoral associations.

In the context of a free market and economicglobalization, it is not the companies attempting to“merge” with policy that come to the forefront oftheir sectors, but rather those companies that oper-ate under conditions of free competition. Thisapplies particularly to companies working underthe new economic sectors, such as information andcommunications technology. These enterprisesconsider the opportunities of the free market to bemore important than obtaining economic advan-tages by questionable means.

In the closed policy-making process it is difficultto provide an analytical reasoning for political choic-

3 1

C H A P T E R 1

I n f o r m a t i o n 1 . 2 ( c o n t i n u e d )

“Buy votes”“Buying journalists and experts”“Organizing peculiar competitions”

“[They] buy votes for Saeima voting sessions.”“There are honest people among journalists, but there are also those who can be bought. And experts, too, can be bought.”“Municipal orders often work by the principle of “buying a T-shirt and paying for a fur coat.” When spending not one’s own, but public money, peculiar competitions and peculiar winners often appear.”

Saeima deputyPolitician

Journalist

es, because issues are decided without properdebate. Nor are the public consequences of imple-menting closed decisions sufficiently considered.The reduction of the degree of political debate is aserious shortcoming. Rational arguments that mayalso appear in closed decision-making do notreceive sufficient confirmation because they cannotbe compared with alternative views.

Politicians involved are also placed in an embar-rassing situation. Left one-to-one with a business-

man, the politician is placed in an unequal situationwhere the scales are usually tilted in favour of theeconomically stronger. As opposed to the business-man, who may be guided by legitimate but self-cen-tred private interests, the politician is committed torepresent the interests of society as a whole. It is dif-ficult to ensure this if decisions are made withoutthe participation of public interest groups.

Closed political practices do not allow minorityand opposition views to be properly expressed.

3 2


If political leaders place too much

emphasis on satisfying business

interests, then the private arena

expands unilaterally and

specific group

interests begin

to dominate over

the interests of

other groups

of civil society.

The public arena and collectiveforms of human development

The private arena and individual forms of human development

The equilibrium between the private and public arenasas a precondition for human development

Age

nts

of t

he p

ublic

are

na

Age

nts

of t

he p

riva

te a

rena

F i g u r e 1 . 5

The rejected and the drop-outs in closed policy-making

As certain groups of society “drop

out” of the decision-making process,

the public arena contracts, politics

becomes distorted and ties

of social solidarity

become

weaker.

Corporate businessand party financiers

Political leaders

The opposition

Rank-and-file party members

NGOs and citizens’ groups

Local governments Experts

Small businesses

Employees

Citizens

The response of Saeima deputies to questions in thestudy poll show that the views of oppositiondeputies in the Parliament are not sufficientlyheard. Such forms of parliamentary practice asquestions and enquiries – which are also part of thepolicy-making mechanism – are provided in theSaeima’s Rules of Procedure but do not work prop-erly, and this too encourages free reign by the cen-tres of power.

Although the tendency to seclusion createsmany shortcomings in politics, it must be stressedthat this does not apply to the entire politicalprocess in Latvia. As shown by the analysis provid-ed in the following Chapters, there are many exam-ples in the work of the Saeima, the Cabinet of Min-isters, ministries and local governments ofdecisions that have been made responsibly, ably,transparently and openly. The public reaction toclosed policy-making practices has been negative,and the majority of the population, Saeimadeputies, local government leaders and civil ser-vants are publicly in favour of open policy-makingprocedures.

Developing open public

policy in Latvia

As previously noted, some characteristics ofopen policy include a public that is potentiallyinformed about current decisions, public participa-tion in policy-making, the use of experts in draftingpolicies, accountability for decisions made, andpublic participation in policy implementation. It isthis style of public policy that best corresponds tothe goals of human development and that createsa positive image of Latvia in the world. The follow-ing Chapters describe the institutional precondi-tions for open policy-making and the specificmechanisms for ensuring its realization. This Chap-ter examines other preconditions, such asincreased political self-awareness, mutual trust,overcoming political bias and the promotion ofwidespread participation. It also addresses recom-mendations made by Saeima deputies on makingthe political process more open and on improvingpolicy-making and policy implementation.

The mechanisms and procedures for open poli-cy-making are being developed and introducedmore rapidly at the local government level (parish-es, districts, and municipalities) than at the nation-

al level, and are establishing themselves more rap-idly in the regions than in the administrative struc-tures of Riga, the capital city.

In describing policy-making openness at thelocal level, Latvia’s eastern Latgale region is a goodexample. Local governments have established theLatgale Development Council, which has drafted,debated and adopted a development plan on aconsensus basis for the entire region. This plan isnow being used to attract funding from the EUPHARE programme. During 2001, rural develop-ment partnerships have developed in various partsof Latgale. The partners include local governments,national and municipal institutions, business sup-port organizations, NGOs and volunteer individu-als. Partnerships run by local communities and res-idents are leading to the drafting of communitydevelopment strategies in order to implement spe-cific projects and attract funding for them.

Examples of open policy-making may also befound in other parts of Latvia. Democracy at workcan be observed particularly in the smaller commu-nities, which meet to discuss joint plans of actionand the formation of districts. These partnershipsare driven by a concern for community develop-ment, a wish to improve general living conditions,volunteerism, and the desire to work for the com-mon good.

In “little politics,” cases where the interests ofspecific groups take precedence over public inter-ests are much rarer than in “big politics.” In the Lat-vian political scene, the closer one comes to Riga,the more cases one will find where the interests ofparties and the economic groupings linked to thembegin to dominate over common and nationally sig-nificant interests.

Open policy-making mechanisms are also beingintroduced more often at the national level and inthe work of State institutions (see Chapter 4). Therecent co-operation of a number of governmentministries with sectoral associations and NGOs hasled to successful decision-making in the joint draft-ing of laws. For example, the Ministry of Welfare iscurrently working with the Association of Physiciansin amending the country’s health care policy. TheMinistry of the Economy has drafted an importantconcept on electronic commerce, arrived at in co-operation with the Information and Communica-tions Technology Sector Association. The Ministryof Agriculture, working together with the Co-opera-tion Council of Farmers’ Organizations, has drafteda plan on the introduction of the EU’s farm and rural

3 3

C H A P T E R 1

support programme in Latvia. The Ministry ofTransport and the Ministry of Regional Develop-ment and Environmental Protection are also work-ing together with NGOs.

Ministry departments work most often with sec-toral associations in drafting sectoral policies, attimes involving the Association of Latvian Munici-palities in the process.

Ministry staff have observed that work withNGOs is more active in those Ministries “that are notinvolved with large amounts of money but that address impor-tant public issues affecting large segments of the population.”For example, departments of the Ministry of Wel-fare are working with trade unions, the Organizationof the Disabled, the Organization of Large Familiesand other NGOs.

From the viewpoint of participatory democracy,the participation of NGOs in the decision-makingprocess should be more widespread. However, suchparticipation is time-consuming and delays the deci-sion-making process as a whole. Both ministry staffand local government representatives admit that theworkload of civil servants is already substantial, andthat it is increased even more by involving NGOs indecision-making. Yet the ministries’ political leadersdemand speed. Thus, the evaluation and remunera-tion of civil servants should include stimuli forinvolving NGOs in policy-making.

Enhancing political

self-confidence

An open and effective public policy is not pos-sible without a high degree of political self-confi-dence, which permits individuals to feel like full-fledged political partners. Therefore, enhancingpolitical self-confidence and increasing mutualtrust are important tasks. For the purposes of thisReport, political self-confidence does not resultfrom public education alone, but also from the per-sonal actions of the individual. Essential factorsaffecting self-confidence are based not only on theobservance of democratic principles in public poli-cy, but also on the experience of the individual inpersonal participation, which permits him or her toovercome biases and afford more trust.

It is common in Latvia to mention the lowdegree of public confidence and trust in politiciansand government institutions. The 1996 and 1998Reports already indicated this, but the problem

has not disappeared. The study carried out for thisReport revealed that the majority of the populationplaces little trust in those institutions that are con-sidered to have the largest decision-making capac-ity. Less than one-fifth of those polled (see Figure 1of Chapter 2) trust the Saeima, the Cabinet of Minis-ters and political parties. Professional experts werethe only category out of 16 choices to receive thetrust of more than half of those polled. This lowdegree of trust is related to the fact that people arefar from convinced that decisions made by thecountry’s executive institutions are competent,honest and fair.

Other factors beside shortcomings in the activi-ties of executive institutions include the low self-evaluation of political agents, a low mutual evalua-tion, and negative stereotyping. In polling thepublic, Saeima deputies, ministry department direc-tors and local government leaders, all four groupsof respondents were asked to answer the followingquestions in their own words:

What are the principal characteristics of politicians inLatvia?

What are the principal characteristics of the civil service inLatvia? and

What are the principal characteristics of local governmentleaders in Latvia?

Thus a self-evaluation of participants in the Lat-vian political process was obtained, in which nega-tive descriptions far outweigh positive ones, asshown in Figure 1.6.

The assessment by the public of other partici-pants in the political process is the most critical.Members of the public accuse politicians of egoismand selfishness, while civil servants are deemed tobe bureaucratic and arrogant. The public’s descrip-tion of local government leaders is more balanced,ascribing not only negative traits such as selfish-ness and incompetence, but also many positivetraits, of which the most often cited are a willing-ness to work and responsiveness.

As opposed to the public, politicians, civil ser-vants and local government leaders view eachother less critically, although negative traits far out-weigh the positive in their mutual assessments.Civil servants and local government leaders accusepoliticians of the same shortcomings as the public:egoism, economic vulnerability, and the represen-tation of narrow interests. Only rarely do theydescribe politicians in positive terms.

Politicians, for their part, see arrogance, rude-ness and a lack of professionalism as characteristic

3 4


3 5

C H A P T E R 1

F i g u r e 1 . 6

Self- and mutual evaluations by members of the public, politicians, civil servants and local government leaders

Numbers in parentheses repre-sent the proportion in percen-tages of positive (+), negative(–) and neutral (+–) descriptions offered by respondents of the relevant groups.

Civil servants on politicians(+10 –80 +–10)Incompetent egotists, economically vulnerable, greedy and at times corrupt. Want to be popular and are dependent on their party. Rarely honest, competent and willing to work.

Civil servants on localgovernment leaders(+18 –54 +–27)Patriots and local patriots. More likely to be incompetent than competent. No strangers to egoism and selfishness. Oppositional frame of mind alternates with insecurity, but the willingness to work is there. Rare traits: corruption, greed, arrogance and ambition.

Local government leaderson civil servants(+17 –69 +–6)Commonly viewed as arrogant and bureaucratic (“do not see the people from behind their papers”), as well as incompetent and corrupt. On the positive side, sometimes seen as responsive and competent.

Self-evaluation of politicians

(+9 –82 +–10) Egotists, do not think of the

country, dependent on business and act in its interests. Few real,

professional politicians.

The public“I don’t believe that my

initiative could influence decision-makers.”

Yes – 81%No – 15%

Hard to say – 4%

The public on politicians +4 –87 +–9) Main traits are egoism, selfishness and greed. “I do not admire any Latvian politician. Everyone thinks only about himself – schooling for his children in foreign countries, expensive apartments and houses, vacations abroad.None can really be trusted and I doubt their honesty. Many are tactless and rude to each other and behave like boxers in the ring – who will get whom. And all that right in front of the people. I would be happy to say that I like politicians and admire them.”

Local government leaders on politicans(+17 –74 +–8)Egoism and the representation of narrow interests are placed first, followed by populism, incompetence and dependence on their party. Renege on promises.

The public on localgovernment leaders(+24 –69 +–7)There is no one special trait. The characteristics vary and the negative alternates with the positive. The shortcomings most often cited are selfishness (“everybody thinks of himself first”) and incompetence, but they are doing what they can, want to work, are active and responsive. Self-evaluation

of local government leaders

(+56 –23 +–21)Diligent and skilful, know how to

survive. Responsive and understanding. Concerned about the

well-being of the population, but lack training and professional

education.

Politicians on civil servants(+15 –79 +–7)Most characteristic traits: arrogance and rudeness. Lack skills, experience and professionalism. Sometimes complicate simple matters. However, there are many professional and able civil servants.

Self-evaluationof civil servants

(+25 –69 +–6)Arrogant and bureaucratic, lack

initiative. More likely to be compe-tent than incompetent. Awareness

of mission interspersed with insecurity. Rarely corrupt.

Politicians on localgovernment leaders(+30 –44 +–26)Lack of competence and initiative. The fear of change and the wish to hold onto one’s chair alternates with action and initiative. Are closest to the interests of the people.

The public on civil servants(+6 –91 +–3)Most characteristic trait – corrupt (“as soon as they come to power, they begin to stuff their pockets”) and bureaucratic (“send us scurrying from office to office like dogs”), quite arrogant (“the lower the civil servant, the bigger the boss”).

of civil servants, although they admit that there arealso many competent specialists among this cate-gory of people. The assessment by Saeima deputiesof local government leaders is the most favourableof all the descriptions provided. The deputies usesuch terms as thrift and closeness to public inter-ests, but consider the local government leaders’main shortcomings to be incompetence, fear ofchange and the wish to hold on to their chairs. Localgovernment leaders, for their part, describe politi-cians and civil servants equally critically, seeing dif-ferent weaknesses in each group and only rarelymentioning positive traits.

The mutually negative description among theparticipants in the political process indicates a gen-eral climate of distrust and the lack of a positiveattitude in Latvian society. It is interesting to notethat politicians and civil servants have also giventhemselves very low ratings. The public, althoughvery critical of politicians and civil servants, is farfrom convinced of its own ability to influence deci-sion-makers. Thus the mutual distrust among thecountry’s political agents reflects the fact that theydo not believe in their ability to improve policy andvice-versa. This vicious circle of a lack of self-confi-dence cannot be overcome with abstract enlighten-ing, but only by constantly practising procedures ofopenness and participatory politics.

Overcoming political biases

The development of public policy in Latvia isobstructed by several widespread biases againstpolitics, as described below.

“Politics is dirty.” This is an often-heard bias,based on the generalization of the negative mani-festations of politics. Unfortunately, people aremore likely to remember the mistakes of politiciansrather than their good deeds and achievements.The media as well, in their role as watchdogs ofdemocracy, prefer to highlight scandals and suspi-cious deals rather than to analytically inform thepublic about positive events in politics, such asspecific development programmes, improvedaccess to information, successful legislation, thestrengthening of administrative capacity, etc.

This situation compels the public to see politicsin a generally negative light and results in pes-simistic evaluations. Although politics certainly hasits shortcomings, this does not justify political cyni-cism, because these shortcomings also stem from

the inability or unwillingness of individuals toimprove politics. Those who insist that “politics isdirty” should first of all answer the question: “Whathave I done to make politics clean?”

“I am not interested in politics.” Such an attitudereveals the manifestation of political scepticism inthe form of individualism and alienation. Peoplewho think in this manner stress the primacy of indi-vidual interests and fail to consider the importanceof public interests and political solutions. Forexample, the human need for a clean environment,convenient public transport, well-kept towns andcities, social security and other public benefits maybe satisfied only in the public arena with the assis-tance of politics. In separating themselves from pol-itics, such people also greatly reduce their ownindividual opportunities.

“Politics does not affect me. Let the government and theSaeima handle it.” In this stereotypical idea politics isseen as the domain of “higher institutions,” with norole for the common citizen. In addition, this mind-set indirectly expresses high expectations in rela-tion to the State. People who adopt this frame ofmind expect most political issues to be resolvedwithout their participation, and believe that Stateinstitutions are entirely responsible for “providingpolitical services” to the people. This narrows downthe understanding of politics and opens the way tocentralization. In fact, policies are implemented bya large community of policy developers, involvingnot only the State, but also groups of civil societyand political networks representing diverse inter-ests.

“Elections are the only time when the people can influencepolitics.” This mistaken judgment narrows down par-ticipation to activity during elections, which is cer-tainly important, but not the only form of politicalaction at the disposal of the public (see Chapter 3).

“We can have good politics only if we have the right peo-ple in the right places.” In Latvia people identify poli-tics with specific persons and the desire for a strongleader of high moral character is quite prevalent.Political parties make use this public mindset andbase their public relations strategies on attractivepersonalities rather than on procedures of demo-cratic openness. Parties tend to hone the publicimage of their leaders and eagerly assess theimpact of political cosmetics on their ratings. Indrawing up their lists of candidates, the approach of“the right people” is also used. Personalities areindeed an important factor in politics, because vot-ers place their trust in specific, rather than abstract

3 6


politicians. Yet the steadfast observance of proce-dures of democratic openness and accountability iseven more important.

“In politics you don’t need ideals, the main thing is toknow how to haggle.” This approach is also promotedby the politicians themselves when they negotiateministerial portfolios and spheres of influence dur-ing the formation of national governments and localgovernment councils. At such times politicians areapt to forget their party platforms and election cam-paign promises, turning politics into a marketplaceand acting as if they were bartering goods. “I for you,you for me, and we together against them” cannot be con-sidered a suitable frame of mind for the publicarena. Such activities distance politics from idealsand give rise to cynicism.

“Voluntary participation in politics is naive. Smart peoplemake money and build a career.” This is one of the mostcontradictory challenges in the life of today’s indi-vidual, who must find a way to balance his or herindividualism with collective responsibility. Assoon as one accepts the necessity for a sense of sol-idarity with a community that consists of other peo-ple and that extends beyond one’s family, then oneis faced with the choice to become politicallyinvolved. This choice requires a strong ability toengage in self-reflection. As soon as a person haschosen participation (as, for example, active mem-bers of NGOs have done), he or she must be pre-pared to face a number of obstacles, such as thehostility of officials, public indifference and a loss offriends. Only by overcoming such obstacles doesparticipation in politics lead to the confirmation ofthe public good, a broadening of personal experi-ence and personal gratification.

Promoting participation

The logic behind political participation is theassurance of the interests of the agents of civil soci-ety in decision-making processes. For the purposesof this Report, participation (comprehensively ana-lyzed in Chapter 3) is both the means and the endof public policy. Participation may be consideredbroadly as indirect and impersonal participation inpolitics, and more narrowly as direct and personalparticipation. Indirect participation is realized withthe help of democratic representation, access toinformation, public debates, policy monitoring bythe media and other mechanisms. It provides citi-zens with a sense of security that their interests are

publicly voiced and taken into account, althoughthey may not involve themselves in politics direct-ly or may do so rarely, for example, by voting inelections or by writing a letters to their newspapers.Therefore in the case of indirect participation, dem-ocratic traditions play an important role in creatinga sense of security that those in power will observedemocratic principles even without the active par-ticipation of all inhabitants. In other words, indirectparticipation manifests itself in the entrustment ofpower and in the reliance on democratic proce-dures.

Direct participation is manifested in the person-al political involvement and action of the individual.It may be irregular or regular (in the latter case con-tinuity of action is important), and it may take placein individual or collective forms. Direct participationdemands much stronger political will from the indi-vidual, as well as activity and political skills.

It should be noted that the degree of actual par-ticipation is always limited. About 20% of respon-dents openly admit to lacking interest in publicprocesses, as they feel that they have enough toworry about with their own problems. About 7% ofthose polled say that they lack the required knowl-edge for participating in decision-making, while56% do not believe that their participation willchange anything. Only a small proportion of thepopulation is already involved in deciding impor-tant issues (5% of respondents) and is active inNGOs (6%). The following phenomenon can beobserved: the more regular activities a publicundertaking demands, the smaller the circle of par-ticipants. For example, 6% of respondents havetaken part in public debates concerning the devel-opment of their community or town, but only 2%have continued to work in implementing specificdevelopment projects.

Participatory democracy is best suited to theneeds of present-day society, but it demands anactive approach to politics and the investment ofeffort on the part of all political participants. Politi-cians, officials and civil servants must be open to thepublic even though this requires additional effortfrom them. The country’s inhabitants, for their part,must become actively involved in debating andaddressing public issues despite their preoccupa-tion with personal issues. Since not all people wishto be actively involved in politics and since manyfavour the indirect representation of their interests,the observance of democratic procedures as a wholeis important in public administration and politics.

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C H A P T E R 1

Although people in Latvia are not very con-vinced of their ability or opportunities to influencepolitics, they are interested in it. The most fre-quently undertaken political activities are thosethat are generally not considered to fall within therealm of politics: following the course of events;discussing political issues within the family, at theworkplace and with friends; voicing one’s opinionsand listening to the views of others. Two-thirds ofthose polled stated that they talk about politicalissues, and another 7% said that they seek toaccess decision-makers if they are not satisfiedwith a decision. The strength of Latvia’s politicalsystem manifests itself in “low politics,” or peo-ple’s democracy – in conditions where politicalissues are actively discussed in social micro-envi-ronments, and where people formulate their dem-ocratic values and their demands to politicians.This is a good base upon which to strengthen openpolicy-making.

Recommendations by Saeima

deputies on improving

policy-making

Saeima deputies contributed greatly to this Reportby responding to our survey and by expressing theiropinions in personal interviews regarding decision-making on important political issues and obstacles toopen policy-making. Their recommendations forimproving the policy-making process are listed below.

The summary of deputies’ answers reveals fiveprincipal shortcomings in decision-making on impor-tant political issues: the dependency of political par-ties on economic groupings, an insufficient level ofcompetence among politicians, the dominance ofparty and politicians’ interests over national inter-ests, little public participation and corruption (seeFigure 1.7).

3 8


G u e s t a u t h o r

Gidon Kremer, violinist, leader of the Kremerata Baltica chamber orchestra

To open the soul means to open borders

What am I proud of in Latvia? That is a difficult question because there are many things not to be proud of. I can be proud that music has not been completely forgotten. I can take pleasure in the exceptional developments in the Latvian musical community, such as the Opera and the choral culture that has always existed in Latvia and continues to evolve. Anyone who devotes himself to culture is more than just a Latvian cultural representative or a Latvian citizen, because culture cannot be viewed from just within the borders of one’s country. Like one’s conscience, culture is open to the world and to life. I can be proud of everything that finds expression and is reflected in Latvia. At the same time I am concerned that music and musical education is not taken as seriously as before. If that continues, then music will in a sense die out and only pop music will remain, which might be insufficient for the future.

That is why the Kremerata Baltica chamber orchestra is important as an open and international musical project without borders. And I am proud that there were people who committed themselves to establishing the orchestra’s headquarters in Riga. With this orchestra I have in some way returned to the city where I was born and which is a part of me, including all the good and bad moments I have experienced here. With Kremerata Baltica I want to build a bridge for young musicians who believe that music is an important part of people’s lives and a channel of communication.

It is important for us to speak in many languages, but it is just as important that we speak in one common language – the language of music. And I am proud that there have always been people in Latvia who can communicate in that language. Under the Soviet system there were many conditions that inspired us to resist mentally, and that has helped us in life. We must not forget that.

But I am disappointed that currently economic considerations are taking priority. Music and culture are the foundation upon which national development can be ensured, and a country can be great and strong only if it based on its culture. If we forget that, then I cannot be proud.

3 9

C H A P T E R 1

Problems*

“Based on your experience, what are the

main problems in the adoption of

important political decisions in Latvia?”

1. Dependency on sponsors

“Dependency of political parties on

sponsors or on the business

groupings standing behind each

party.” “Influence of business

circles.”

2. Lack of competence

“Lack of experience on the part of

deputies.” “Lack of competence and

accountability.” “Failure to

anticipate consequences.” “Lack of

strategy.” “Unreal, wrong

priorities.” “Bad decisions.”

“Adopted decisions do not serve

long-term public interests.”

3. Dominance of party interests

“Party and politicians’ interests are

put first.” “Deputies do not consider

the national interests sufficiently.”

“Personal economic interests.”

“Ignoring public interests.” “Egoism

of political forces.”

4. Little public participation

“No public debates or involvement.”

“The public is poorly informed.”

“Lack of skills to explain decisions to

the public.” “Lack of contact

between authorities and the public

at all levels.” “Draft decisions are

not sufficiently debated in public.”

5. Corruption

“Financial influence in decision-

making.” “Important decisions are

financially influenced.”

Obstacles*

“What are the main obstacles to deve-

loping open public policy in Latvia?”

1. Selfish interests of parties

“Excessive influence of personal

interests in national politics.”

“Concealing the true interests of

political parties or individual

deputies.” “Political parties

coalescing with business groupings.”

“Corruption.” “Important economic

decisions are not made by official

institutions of power but by

unknown persons in the

background.”

2. Lack of contact with the public

“Undemocratic thinking.” “Legacy

of the past totalitarian society when

authorities had no need to consider

the public.” “Lack of contact with

the public, mutual distrust, lack of

public influence on power

structures.” “Problems of

exchanging information between

authorities and the public.” “Little

interest in politics on the part of the

public.”

3. Lack of competence

“Lack of education and

understanding on the part of

politicians and the public.”

“Incompetence, lack of information.”

“The bicycle is being reinvented.

[They] fail to view the development

of processes as a whole.”

Solutions*

“What is the best way to render the decision-

making of important political issues more open

and transparent?”

1. Working with the public

“Need more debate with social groups

and associations.” “The public must be

informed and involved in decision-

making.” “Decisions should be debated

publicly.” “Every interested party shoul

act professionally to have its interests

heard.” “Tolerance must be a two-way

street. The public deserves respect in

order to encourage discussions, but so do

politicians. They should not be bad-

mouthed before a decision has even been

made, and should be assisted in finding

the right solution.”

2. Working with the media

“Drafts of important decisions should be

published in advance and public debates

should be organized on TV, radio and

other media.”

3. Increasing politicans' accoun-

tability

“The competence of politicians must be

raised.” “Politicians should account

personally for the consequences of

decisions they have made.” “Elected and

appointed officials should account for their

activities.” “Politicians should declare

their finances.” “Politicians should openly

declare the direction of their lobbying.”

4. Consulting with experts

“Different solutions should be considered

with the help of expert advice.” “Social

studies should be conducted.”

5. Funding parties by the State

6. Observing existing laws

“Currently available opportunities and

laws should be used more fully.”

F i g u r e 1 . 7

Insights by Saeima deputies on overcoming political bottlenecks

*Problems, obstacles and solutions are listed in the sequence of how

often they were mentioned. Quotes from deputies’ replies are shown

in italics and separated by quotation marks.

These problems of high-level politics are notisolated phenomena, but interacting shortcomingsthat feed on each other and create serious obstacleson the road to open policy-making. In answering thequestion: “What are the main obstacles to developing openpublic policy in Latvia?” deputies mentioned threemain impediments: the selfishness of party inter-ests, the lack of co-operation with the public andpolitical incompetence. These obstacles echo thepreviously indicated problems in decision-making.Deputies stated that “excessive influence of personal inter-ests can be observed in national politics,” that “political partiescoalesce with business groupings” and that frequently“important economic decisions are not made by official institu-tions of power but by unknown persons in the background.” Inthe opinion of some deputies, this can be explainednot only by the dishonesty of certain politicians, butalso by their lack of contact with the public. Whileincreased contact with the public would help to pro-mote greater openness, there is still a widespreadattitude inherited from the Soviet period that“[State] power need not take the public into account.”

The recommendations put forth by Saeimadeputies for the development of more open andtransparent policy-making concur with the mainrecommendations of this Report and were takeninto consideration as it was being written. It is inter-esting to note that many deputies placed priorityon better contact with the public: “Need more debatewith social groups and associations.” “The public must beinformed and involved in decision-making.” “Decisions shouldbe debated publicly.” “The watchdog role of NGOs should bestrengthened.” Deputies allocate an important role tothe media in their rapport with the public, althoughtheir relations with the media are sometimesstrained (see Chapter 3).

Another priority, according to Saeima deputies,is raising the accountability of politicians. Thismight be achieved by demanding that elected andappointed officials report to the public, that politi-cians openly declare their finances and lobbying,and that they assume personal liability for theiractions, which includes resigning or being recalledfrom their posts in the case of violations.

Parliamentarians believe that funding politicalparties from the national budget would promoteopen policy-making, because it would reduce thesignificant dependency of political parties on busi-ness groupings and sponsors. As is also shown byother studies, party financing is closely linked tothe closed policy-making model. Parties continueto be funded by both large corporations and the

privatization process. Small businesses in compari-son provide little funds, and most parties do notseriously consider them as potential donors. Thepresent model of party financing reveals a certainestrangement between the political elite and smallbusiness, which to a certain extent explains thechronic delay in policies supporting this particularsector of entrepreneurship. As long as the issue ofparty financing from the national budget has notbeen resolved, the parties themselves mustassume much greater responsibility for ensuringthe transparency of their funding.

According to polled Saeima deputies and min-istry staff, the provision of high quality politicalanalysis is becoming one of the most importanttasks in public policy (for more details on this issuesee Chapter 4), as the efficient drafting and imple-mentation of policies will increasingly depend onthe use of qualified experts. Ministries are alreadymaking use of business-type policy analysis studies.Saeima deputies believe that these should be usedmuch more and that such studies help politiciansand civil servants to consider different options infinding solutions. Thus independent policy analysisinstitutes must be strengthened. A favourable pre-condition for this is the fact that Saeima deputies,government officials and local government leaderstrust professional experts more than any other par-ticipants in the public policy process.

In answering the question: “What main courses ofaction are needed to improve policy making in Latvia?”Saeima deputies mentioned four main tasks:increasing the political accountability of parties,using the advice of professional experts, improvingexisting legislation and encouraging public partici-pation. In answer to the question: “What main coursesof action are needed to improve policy implementation inLatvia?” deputies indicated three immediate tasks:consolidating the civil service, using more profes-sional expertise, and promoting public participa-tion. “The role of NGOs must be increased in the realizationof policies and the monitoring of their implementation.”

Consolidating public

accountability procedures

The public accountability of policy-making iscoming to the forefront of the political agenda notonly in Latvia, but also other democratic countriesand the EU. In many democratic countries, political

4 0


accountability procedures – by which participantsin the political process attempt to ensure thatadopted decisions and implemented policies aresocially acceptable – are becoming ever moreimportant. Public accountability procedures andparticipation are the two principal mechanisms ofopen policy-making. Participation increases theinfluence of the public on policy-making andimplementation, while public accountability proce-dures ensure that the public can monitor policyimplementation.

Public accountability procedures form a trans-parent and responsible link between those whogovern (the government, ministries, local govern-ments, politicians) and those who are governed (cit-izens, inhabitants, the public). These proceduresare based on access to information and openness.

It must be noted, however, that the principle ofpublic accountability must be observed not only bythe Saeima, the government, ministries and localgovernments, but also by NGOs.

In Latvia public accountability procedures havemanifested themselves in practical projects bywhich administrative institutions have attemptedto improve access to information, and by the activ-ities of Delna and other public organizations that areworking to ensure openness in public policy. Inmany cases public accountability procedures coin-cide with specific forms of participation. Participa-tion and openness have been promoted, for exam-ple, by the ministry practice of inviting NGOs totake part in the drafting of sectoral policies, and bylocal government co-operation with NGOs in thedevelopment of local policies.

To date the greatest success in introducing pub-lic accountability procedures has been achieved inthe legislative area, thanks to the existence well-drafted open information laws. Practical steps havealso been taken to implement these laws. Forexample, the Saeima, the Cabinet of Ministers andministries now place information on draft laws anddecisions in their Internet websites. However,access to information alone does not ensure open-ness and participation, as such access must also bewidespread and uniform. Various groups of thepublic, such as urban and rural residents, musthave equal opportunities to access information onthe country’s administrative decisions. If only somegroups are informed and influence legislation, thenthe public legitimacy of decisions may even bereduced, even though the proper procedures ofopenness appear to have been observed.

Access to information is not a sufficient precon-dition for people to properly follow and influencethe policy-making process. The amount of informa-tion in many areas is increasing more rapidly than itcan be assimilated. The politically popular strugglefor access to information in itself does not ensurecontrol over decisions if individuals and NGOs donot learn to make use of the information at theirdisposal.

Both the decision-making of political issues andthe administrative implementation of these deci-sions must be open and responsible. In addition,sanctions must be considered and introduced for thepublic to apply against administrative institutionsthat fail to abide by procedures of openness. Aninstitution carrying out functions similar to that of anombudsman could provide the public with an extrameans to pressure the country’s administrative insti-tutions into working within the confines of the law.

Conclusions

In Latvia strong tendencies of seclusion and alack of accountability in public policy are evident,even though the public policy process as a wholecannot be considered to be closed.

The compilation of responses by Saeimadeputies and other political experts shows fivemain shortcomings in political decision-making:party dependency on business groupings, an insuf-ficient degree of competence among politicians,the dominance of party and politicians’ interestsover national interests, a lack of public participa-tion and corruption.

A closed political decision-making process ischaracterized by a narrow circle of decision-makers,the significant influence of business groupings inthe decision of political issues (a feature that maybe linked to corruption), the lack of transparency indecision-making procedures and the non-obser-vance of public interests.

The nucleus of closed policy-making is formed bytripartite commitments between business groupings(party financiers), political leaders and “grey cardi-nals.” Such relationships ensure the advancement ofthe interests of party financiers in political decisions,and often serve to satisfy the hidden interests of thepoliticians involved in such decisions.

There are several issues in Latvia where deci-sion-making tends to be closed. As a rule theseconcern such crucial economic subjects as privati-

4 1

C H A P T E R 1

zation, the regulation of monopolies, the regulationof the most profitable types of business, and otherquestions affecting the interests of large companiesand business groupings.

It is customary among politicians to divide pub-lic policy issues into “important” and “less important”categories, not according to their public importancebut rather according to whose influential businessinterests are affected. Issues that affect the publicsector and social policy are often classified as “not soimportant.”

Although the tendency to seclusion creates manyshortcomings in politics, it must be stressed that thisdoes not apply to the entire political process inLatvia. There are many examples in the work of theSaeima, the Cabinet of Ministers, ministries and localgovernments of decisions that have been maderesponsibly, ably, transparently and openly.

In “little politics,” cases where the interests ofspecific groups take precedence over public inter-ests are much rarer than in “big politics.”

All respondent groups – parliamentary deputies,ministry staff, local government leaders and thepublic – gave Latvia’s State institutions the highestrating in decision-making competence, but the low-est rating in decision-making transparency.

According to Saeima deputies, the lack of deci-sion-making transparency is most prevalent in thework of the Cabinet of Ministers, ministries andministry institutions.

As opposed to decision-making in Latvia’s Stateinstitutions, all respondent groups deemed deci-sion-making in NGOs to be highly honest and trans-parent. However, NGO competence was ratedlower than that of State institutions by both localgovernment leaders and the public.

In general, the population does not believe thatit has any meaningful capacity to influence publicpolicy, although it agrees that policy affects thecourse of people’s daily lives. This is largely due tothe fact that politicians and civil servants do notsufficiently practise procedures of democraticopenness, and is compounded by a low level ofpublic participation in decision-making.

This low degree of trust is related to the fact thatpeople are far from convinced that decisions madeby the country’s executive institutions are compe-tent, honest and fair.

Other factors beside shortcomings in the activi-ties of executive institutions include the low self-evaluation of political agents, a low mutual evalua-tion, and negative stereotyping.

The public reaction to closed policy-makingpractices has been negative, and the majority of thepopulation, Saeima deputies, local governmentleaders and civil servants are publicly in favour ofopen policy-making procedures.

Open decision-making mechanisms and demo-cratic procedures are becoming institutionalized inLatvia. Open policy-making is characterized by co-operation between politicians, civil servants,NGOs, professional associations, public groups,independent experts and other agents in the draft-ing and implementation of policies.

The mechanisms and procedures for open poli-cy-making are being developed and introducedmore rapidly at the local government level (parish-es, districts, and municipalities) than at the nation-al level, and are establishing themselves more rap-idly in the regions than in Riga proper. Examples ofopen policy-making can be observed particularly inthe smaller communities, which meet to discussjoint plans of action and the formation of districts.

Several ministries (Welfare, Economy, Agricul-ture, Transport, Environmental Protection andRegional Development) working with sectoral asso-ciations and NGOs are developing a successfuldecision-making practice based on the joint draft-ing of laws and regulations.

Ministry departments work most often with sec-toral associations in drafting sectoral policies, attimes involving the Association of Latvian Munici-palities in the process.

In the context of a free market and economicglobalization, it is not those companies attemptingto “merge” with policy that come to the forefront oftheir sectors, but rather those companies operatingunder conditions of free competition.

The strength of Latvia’s political system manifestsitself in “low politics,” or in conditions where politicalissues are actively discussed in social micro-environ-ments, and where people formulate their democraticvalues and their demands to politicians.

Latvia’s human development policy regardingpensions and health care has achieved very mod-est results at the individual level. Improvementshave been slow and gradual. These policies havebeen geared more to long-term than short-termhuman development goals.

The efficiency of human development policy atthe individual level has been lessened in Latvia bysuch macro-economic factors as a low GDP per capi-ta and the limited funding available from thenational budget.

4 2


The State pension and health care systems arestill unable to form a safety net for the populationin the event of macro-economic instability.

The implementation of rural programmes ismade difficult by the depth of Latvia’s rural prob-lems, as well as by political disarray and the lack ofco-ordination between those ministries thataddress rural issues.

The public is not certain that State policy as awhole is directed to improving the living conditionsof the population.

Recommendations

In the opinion of Saeima deputies, policy-makingwould become more open and transparent if thelink to the public was strengthened and politicians’degree of accountability was raised. This might beachieved by demanding that elected and appoint-ed officials report to the public, that politiciansopenly declare their finances and lobbying, andthat they assume personal liability for their actions,which includes resigning or being recalled fromtheir posts in the case of violations.

Since most people do not actively participate inpolitics and prefer an indirect representation oftheir interests, policy-making must occur in accor-dance with open democratic procedures at alltimes.

Various groups of the public, such as urban andrural residents, must have equal opportunities toaccess information on the country’s administrativedecisions.

In addition, sanctions must be considered andintroduced for the public to apply against adminis-trative institutions that fail to abide by proceduresof openness. An institution carrying out functionssimilar to that of an ombudsman could provide thepublic with an extra means to pressure the coun-try’s administrative institutions into working withinthe confines of the law.

Open policy-making would also be promoted byfinancing political parties from the national budget,as that would reduce their considerable dependen-cy on business groupings and sponsors.

As long as the matter of financing parties fromthe national budget has not been resolved, the par-ties themselves must take greater responsibility forensuring the transparency of their finances.

A law is needed for regulating lobbying proce-dures and ensuring their openness.

A law is also needed to ensure public debatebefore the final resolution of complex issues thathave a long-term influence on human develop-ment.

Regulations must be passed to ensure that thatno decision is made without consulting those peo-ple and interest groups affected by it. The Cabinetof Ministers should order every draft law or deci-sion to be supplemented by a consultation docu-ment where interested groups and NGOs canexpress their assessments and recommendationsand offer alternative solutions. These statementsshould be published and used in the adoption offinal decisions.

In the evaluation and remuneration of civil ser-vants’ performance, stimuli should be provided forinvolving NGOs in policy-making and implementa-tion.

Appropriate policy analyses and studies shouldbe used more effectively in drafting and imple-menting policy. Independent policy analysis insti-tutes should be strengthened, and advantageshould be taken of the fact that Saeima deputies,ministry department directors and local govern-ment leaders trust professional experts more thanany other participants in the political process.

In the interests of rural and regional develop-ment, the establishment of partnerships shouldbe supported where parish and municipal govern-ments, rural support institutions, NGOs and pri-vate organizations work together to develop andimplement district and regional developmentstrategies. Such partnerships will play an increas-ingly important role in attracting EU structuralfunds.

In order to accelerate rural and regional devel-opment, community funds must be establishedwith contributions from the State, local govern-ments, businesses and private persons. Thesecommunity funds could finance projects for thecommon good and ensure co-financing for EU struc-tural fund programmes designed to developLatvia’s regions. In establishing community funds,local governments and State institutions must workactively with businesses. Both the national andlocal governments should find the means to con-tribute to such funds.

The use of funds presently allocated for ruralsupport sub-programmes should be re-evaluatedin order to direct more funds to human resources,the introduction of new technologies, education,and co-operation projects.

4 3

C H A P T E R 1

4 4

Introduction

The purpose of this Chapter is to describe thepublic policy process in Latvia from a human devel-opment perspective. The manner in which the pol-icy process has been defined in the Constitution,national legislation and other documents, and themanner in which this process actually takes placehave been anlayzed in the study of regulatoryenactments, interviews with people involved inpolicy-making, and observations of policy process-es. Particular attention has been devoted to deci-sions adopted by the Saeima (Parliament), the Cab-inet and local governments, as well as to theidentification of problems, the definition of alterna-tives, and the implementation and evaluation ofdecisions in these institutions.

Institutional framework of

public policy

The Constitution (Satversme) states that Latvia isa parliamentary republic and clearly establishesthe so-called parliamentary supremacy system in thecountry. The Latvian Saeima has 100 deputies whoare elected in direct, universal, secret and propor-tional suffrage. The Saeima is elected for four yearsand its deputies can only be removed from officeunder exceptional circumstances.

Latvian citizens may vote once they havereached the age of 18, but must be at least 21 yearsof age in order to stand for office. The right to beelected is denied to persons who are serving prisonsentences, have been sentenced for deliberatecrimes and whose conviction has not been voidedor annulled, or who are incapacitated.

Bearing in mind the historical inheritance left bythe Soviet occupation, the right to be elected issubject to some limitations connected with activi-ties during the occupation. Several political forceshave contested the legality of these limitations onhuman rights grounds and have appealed to the

Constitutional Court. However, the ConstitutionalCourt ruled on August 30th, 2000 that existing limita-tions conform both to the Constitution and to sev-eral international human rights documents. TheCourt pointed out that “the purpose of limitationson passive voting rights is to protect the democrat-ic system of the State, its national security and theunity of the territory of Latvia. They are not aimedagainst the plurality of ideas in Latvia or against anyperson’s political views, but rather against personswho have actively attempted to undermine thedemocratic system of the State and have thusturned against Article 1 of the Constitution.”

The Saeima elects the President to a four-yearterm. While the President performs mainly repre-sentative functions, his or her area of responsibilityincludes such politically significant activities asnominating candidates for the position of PrimeMinister, proclaiming laws adopted by the Saeima,and convening extraordinary sessions of the gov-ernment. The President also has the right to initiatelegislation. The President can be recalled fromoffice only with the consent of at least 67 Saeimadeputies. The President, in turn, can initiate a gen-eral referendum on the dissolution of the Saeimaand on the holding of new elections. Public discus-sions on whether the President should be electeddirectly by the people occasionally come to thefore.

The Saeima also approves the government orCabinet of Ministers, which consists of the PrimeMinister and his chosen ministers. The governmentmust receive a vote of confidence from the Saeimabefore it can assume power, and is accountable tothe Saeima for its performance. The Cabinet is themost significant executive organ in the countrybecause the laws of Latvia have given it extensiveauthority. Article 81 of the Constitution also gives itlimited legislative powers. However, as bothdecentralization and the delegation of duties areproceeding slowly, the government continues to beoverburdened.

The functional division of powers between thelegislative and the executive branches of the Statecan be partially circumvented by the fact that

C H A P T E R 2

The Public PolicyProcess

4 5

C H A P T E R 2

Saeima deputies may also perform the functions ofgovernment ministers or ministry parliamentarysecretaries while keeping their deputy mandates.While the Saeima has extensive powers in decidingabout the activities of the entire State apparatus,its powers are limited by the fundamental humanrights established in the Constitution and by sever-al elements of direct democracy. The electorate hasto power to dissolve the Saeima through a referen-dum, but this complexity of this procedure makesits use extremely rare.

Referendums are an important element of directdemocracy provided for by the Latvian Constitu-tion, which emphasizes the sovereign role of thepeople and which creates opportunities for thepublic to change unsuccessful decisions. The Saeimamay amend those articles of the Constitution thatoutline the legal foundations of Latvia only follow-ing a national referendum.

The power of the courts is strictly separated fromthe legislative and the executive and as an institu-tion the judiciary has significant independence.

Latvia is a unitary State whose borders have beenestablished in international agreements. WhileLatvia has several significant cultural and historicalregions, these have no particular legal status. Foradministrative purposes the country is divided into26 local government districts, in which elections areheld every four years. As with the Saeima, local gov-ernments are elected by Latvian citizens who havereached the age of 18. In order to stand for office onemust be a citizen aged 21 or over, subject to the samelimitations that apply to the deputies of the Saeima.

Public policy agents

Much has changed in Latvia since the end of1980s, when the Communist Party strictly deter-mined and limited the participation of individualsand organizations in policy-making. Nowadays, atleast formally, an unlimited number of agents mayparticipate in the policy-making process. (The term“political agent” is understood here as either an indi-vidual or an institution that purposefully participatesin the policy process and that has a certain autono-my and freedom to act.) Political agents that couldnot exist until the end of 1980s have now becomeinvolved in the policy-making process. Among themare autonomous non-government organizations(NGOs), enterprises and business groupings, andmedia not controlled by the government.

These have not been merely formal changes.The United Nations Organization has acknowl-edged that Latvian NGOs are increasingly partici-pating in the decision-making process:

“For example, since 1998 trade unions haveplayed an active and important role in the work ofthe Trilateral Advisory Council, which unites worker,employer, and government representatives. NGOscan now participate in various committee meetingsof the Saeima, and members of minority NGOs arewidely represented in integration councils at thelocal government level.”

Yet in Latvia, as in many other post-socialistcountries, the phenomenon known as “state cap-ture” has been detected, under which laws, regula-tions and other decisions adopted by State institu-tions are passed in the interests of small groups orindividuals, and under which public officials andpoliticians have received illegal private benefits.Latvia has been qualified as a country with a highlevel of “state capture” or “economic capture.”Since state capture occurs through channels thatgive “capturing companies” distinct privileges, andsince those not involved in such decision-makingprocess are subject to de facto discrimination, thereis basis for the hypothesis that a very limited circleof agents participates in the Latvian public policyprocess. This is at least partially confirmed in inter-views conducted by the authors of this Report.

Answers received in interviews with the publicand deputies of the Saeima show that both thepublic and Saeima deputies agree that the mainpolitical decision-makers in Latvia are the Cabi-net, the Saeima, leaders of business groupings,political party leaders, parties in power and theso-called “grey cardinals,” or ‚minences grises. Citi-zens’ groups, NGOs and rank-and-file politicalparty members are deemed to have less influenceon policy-making (see Table 2.1). Members of thepublic believe that position parties, party leadersand leaders of business groupings have less influ-ence on legislation than elected deputies them-selves believe. Parliamentary deputies believethat the media, ministry officials, sectoral associa-tion representatives and public opinion leadershave more influence on legislation than the publicbelieves.

In qualitative interviews, people connected withthe policy- making (party leaders, business people,media and NGO representatives) were asked toanswer the question: “Who are the main players in thepolicy-making process?” Many pointed out that the pol-

4 6


icy-making process in Latvia is rather closed andthat the circle of chief players is small. Among themost significant policy agents, they mentioned eco-nomic groupings (using such labels as “economicinterests,” “economic groupings,” “party sponsors,”and “business people”). Interviewed experts men-tioned the following agents slightly less frequently:the mass media, the international community andthe European Union (EU), political parties and theirleaders, and party financiers, as well as the bureau-cracy and the government.

Former “komiteçñiki“ (KGB employees), who arestill well-provided with information and contacts,were also mentioned as significant influence-exert-ing elements, as were the Latvian government’sintelligence services, who, according to some

experts, are also beginning to become engaged inpolitics. For example, news that the SAB (Latvia’schief intelligence-gathering agency) has providedadvice to a power company’s former president onconcrete business transactions can be interpretedas this agency’s involvement in politics.

Regarding legislative and public affairs, variouspolicy agents have different levels of influence inthe hidden decision-making process. In the legalprocess, the more important players are thebureaucracy, which is working together with theEuropean Union, as well as the mass media andleading political “old-timers,” who have unofficialpersonal influence. In the hidden decision-makingprocess the main players are business people oreconomic groupings, party leaders and “party

T a b l e 2 . 1

The most influential decision-makers and the degree of trust placed in them(% of respondents from the public in bold numbers; % of 37 Saeima deputy respondents in brackets)

To a very large or large extent To a small extent, not at all Difficult to say

Who, in your opinion, influences important policy decisions in Latvia, and to what extent? Decision-makers

Cabinet (government)

Saeima (Parliament)

Leaders of business groupings

Political party leaders

Parties in power

“Grey cardinals” andbehind-the-scenes operators

The media

How much or how little do you trust the following people and organizations to make competent, honest and just decisions?

18 (57)84 (100)12 (-)

4 (-)

82 (92)13 (3)

5 (3)

79 (89)13 (6)

8 (6)

73 (94)19 (6)

7 (-)

68 (97)24 (3)

8 (-)

63 (80)22 (11)

15 (9)

45 (72)47 (29)

8 (-)

79 (43)3 (-)

17 (66)79 (34)

3 (-)

8 (9)86 (89)

6 (3)

11 (11)86 (83)

4 (6)

13 (40)79 (57)

8 (3)

6 (3)82 (94)

11 (3)

31 (23)62 (74)

6 (3)

4 7

C H A P T E R 2

cashiers.” Three important political agents – eco-nomic groupings, the mass media and NGOs – aredescribed below.

Economic groupings

It is significant that nearly all interviewed expertsmentioned economic groupings and their interests,along with party financiers, as crucial policy agents.One-fifth of interviewed Saeima deputies also men-tioned party dependence on sponsors (i.e. econom-ic groupings) as one of the principal obstacles toquality policy-making. Only parties’ subjectiveinterests and political egoism were pointed outmore frequently as a problem. It is a paradox thatSaeima deputies, who have been given legitimacy by

the people who elected them, mention that theirwork is hampered by economic groupings that lacksuch legitimacy. The results of the Saeima deputyinterviews show that party leaders (if it is acceptedthat they are in charge of their parties’ platforms)and business groupings (or their leaders) havegreater influence on political decisions than rank-and-file Saeima deputies. One of the intervieweddeputies acknowledged that “various party interests‘torpedo’ effective decision-making in important cases.”

The mass media

Almost all experts admitted that the media havegreat influence on the policy-making process, yet atthe same time several experts pointed to a lack of

T a b l e 2 . 1 ( c o n t i n u e d )

To a very large or large extent To a small extent, not at all Difficult to say

Professional experts

Opposition parties

Local government leadersMinistries and their

subordinate institution employees

Rank-and-file political party members

Professional associations

Public opinion leaders

NGOs

Civil society groups

52 (83)35 (34)51 (63)

13 (3)

26 (23)63 (76)

11 (-)

28 (29)63 (69)

9 (3)

25 (46)62 (49)

13 (6)

21 (20)71 (74)

8 (6)

17 (37)66 (60)

17 (3)

16 (37)69 (57)

15 (6)

39 (14)8 (3)

12 (31)79 (66)

9 (3)

31 (60)63 (37)

6 (3)

11 (43)78 (57)

11 (-)

9 (37)82 (52)

9 (11)

25 (49)63 (49)

12 (3)

24 (40)60 (49)

16 (11)

8 (6)79 (91)

13 (3)

25 (40)61 (60)

14 (-)

5 (-)83 (94)

12 (6)

17 (31)68 (63)

15 (6)

4 8


editorial independence, and to their belief that thatthe media are not sufficiently dependent on theiraudience. According to one expert: “It is absolutelyclear that Preses nams publications have no editorial free-dom. Other [publications] also have their sympathies, butthey don’t pronounce them so openly. In other countries themedia also exhibits certain trends, such as liberalism or con-servatism. But here these are not openly declared.” The abil-ity of some media to be political agents is thusquestioned, because their news content is deemedto be controlled by their owners and their freedomof action correspondingly limited.

Non-governmental

organizations (NGOs)

While non-governmental organizations (NGOs)may have the largest potential to involve thebroader public in policy-making, this study’s inter-viewed experts evaluated the role of NGOs aseither very limited or unclear: “The possibility forNGOs to influence political decisions is close to zero,” saidone expert. Several experts, while recognizing thatformally State institutions have created a mecha-nism for co-operation with NGOs, doubted whetherthese organizations really have any notable effecton political decisions. For instance, in connectionwith Latvia’s accession negotiations with the Euro-pean Union, meetings between government repre-sentatives and Latvian sectoral associations dooccur, but sometimes they only take place for thesake of appearance. Only one expert claimed thatany active and educated person can influence deci-sion-making in the country.

The policy-making process

according to experts

During research on public policy and participa-tion in the preparation of this Report, experts wereasked: “How are important political decisions made?” Thisquestion was intentionally general so that each inter-viewee would mention those aspects and decisionsthat seemed most essential to him or her. Althoughseveral common tendencies appeared, the answerswere quite diverse. Therefore the following analysiswill also feature some important viewpoints thatwere mentioned in only a few interviews.

One business leader strongly emphasized atvery outset of his interview that decisions in Latviaare made according to the procedures set down bythe Constitution. The other interviewees referredeither to shortcomings in decision-making general-ly, or to the fact that certain categories of decisionsare made behind closed doors and in a manner thatis often incomprehensible to the wider public.

NGO leaders evaluated policy-making most crit-ically. One NGO representative said that ”politiciansuse senseless arguments because they lobby business.” Inaddition, there are grounds for concern that policydecisions are not prepared by State officials: “Deci-sions are made not in the Saeima, but somewhere else.” This,according to individual experts, is confirmed byseveral political decisions that have not been com-prehensible to the wider public and that have sub-sequently been revoked. Two such examples arethe widely unpopular amendments to the Law ofPensions, and the increase in the excise tax for usedcars that were passed by the government of AndrisÍ˚éle in August 1999 and later repealed.

A number of interviewed participants in the pol-icy process doubted or even denied that importantpolitical decisions in Latvia are adopted accordingto the principles of a law-abiding State, and indi-cated that even the highest Latvian governmentofficials don’t believe that this is the case: “In talkingabout negative phenomena, for instance, corruption, all ofthose with any power – the State Auditor, the courts, theProsecutor’s Office, deputies – complain about a feeling ofhelplessness.” These observations lead one to con-clude that there are two parallel systems of deci-sion-making in Latvia: one that is legal, multiparty,public, and based on democratic principles; andanother that is based on corporate and corruptinterest groupings and a personal contact system.Both systems exist side by side.

Yet a large proportion of interviewed Saeimadeputies (86.4%) and members of the public (59%)agreed either completely or in part that parliamen-tary debates play a significant role in shaping poli-cy because they provide an opportunity for the dis-cussion of contentious issues in public. If such alarge proportion of respondents feels that publicdebates in such a constitutionally important institu-tion as the Saeima are essential, then the policyprocess that has been foreseen in the Latvian Con-stitution still has significance.

In those cases of decision-making where there isno pressure from specific interest groups (for exam-ple, in issues that are not tied to such important

4 9

C H A P T E R 2

economic processes as privatization and the fightagainst corruption), the public has a greater oppor-tunity to exert its influence because “there is no out-side interest about these decisions.” In such cases civil ser-vants are also more open in the policy-makingprocess.

Channels of policy influence

Answers by experts to the question: “Throughwhich channels can policy-making be influenced in Latvia?”confirm the hypothesis that the policy-makingprocess in Latvia is rather closed. Regarding chan-nels of influence, most respondents mentionedfinancial resources as being of great significanceand evaluated the situation quite radically: “There isonly money.” The strong opposition by the Father-land and Freedom (Tévzemei un Brîvîbai / LNNK) partyto granting non-citizens living in Latvia the right tovote in municipal elections is explained by its wishto protect its economic influence in Riga: “Is it notimportant to [some businessman], as the chief financialsource, for Fatherland and Freedom to be in politics? Every-body knows that if non-citizens are granted the right to votein municipal elections, then the [forces of the] left will come inpower in Riga and a revision of economic influence will takeplace.” Experts also acknowledged that the paymentof money as a channel of influence is becomingmore intricate and thus more entrenched. “Commer-cial channels are becoming more refined. From a simple enve-lope with two or three thousand – thanks to which a small firmreceives a government contract – to credit cards and the like.”

There are also references to the secrecy of influ-ence channels. “In Latvia there can be no discussion aboutmodern government, because hidden influence channels aretoo important, which is characteristic of the mafia and oli-garchic structures.” Personal contacts, which in manycases are not available to a wider circle, are amongthe main channels of influence. There is no officiallobbying mechanism and influence is thereforebased on personal relationships. Certain NGO rep-resentatives, having personally gained certain peo-ple’s trust, have also gained corresponding influ-ence opportunities.

Indications of hidden and illegitimate (andsometimes illegal) influence channels are counter-balanced, at least to some extent, by such openand legitimate influence channels as the massmedia, which was mentioned by some respon-dents. Also mentioned were the opportunity to joinpolitical parties or to lobby them in various man-

ners, as well as the opportunity to form non-gov-ernmental organizations. It was also pointed outthat decision-making can be influenced by contact-ing specific politicians directly. While politicians doconsider what they might have to gain from contactswith members of the public, it does not necessarilyhave to be money. If they see that by solving a cer-tain problem they can gain good publicity, thenthey may wish to get involved.

The policy influence channels outlined in theinterviews can be grouped according to two fea-tures – openness and legitimacy. Some of theseinfluence channels are grouped in this manner inTable 2.2. An influence channel is considered to beopen if it is accessible to most of the public, whilea closed influence channel is accessible to only asmall part of society. The second feature – that oflegitimacy – has a normative characteristic in thesense that it determines whether the correspon-ding channel is acceptable to democratic govern-ment and will promote human development. A lim-ited circle of policy agents in Latvia actively andeffectively uses closed and illegitimate influencechannels. However, the significance of open andlegitimate channels in everyday policy is increasingslowly. It must be added that violent mass demon-strations are mentioned in the illustration as theo-retical alternatives and are not characteristic of theLatvian policy-making process.

Successful political decisions

The experts consulted for this study were askedto describe some cases of successful decision-mak-ing that they had experienced personally. Somewere able to name such cases without delay, butothers could do this only with difficulty, sometimesafter considerable thought. As positive decisionsrespondents mentioned the government’s concep-tual decision to form a corruption prevention office,the review of the privatization of the Latvenergo util-ity company following a nation-wide petition cam-paign, the decision to provide State support forsports, the adoption of Cabinet regulations forimplementing the State Language Law, the election ofVaira Vî˚e-Freiberga as President of Latvia, theadoption of the country’s Freedom of Information Law,several decisions linked to Euro-integration,Latvia’s decision to seek admittance to the Euro-pean Union, the Association and Free Trade Agree-ments with the European Union (which, however,

5 0


were not widely discussed and assessed), the cre-ation of the Constitutional Court, the decision todenationalize State property, and other examples.Thus, although there are serious deficiencies inLatvia’s public policy process, a whole string ofdecisions, judging by their content, have been suc-cessful.

Interestingly, several of the cited examples ofsuccessful policy-making were carried out in aclosed process, where public participation was lim-ited. Among them were almost all of the mostimportant decisions linked with European integra-tion, and the election of Vaira Vî˚e-Freiberga asPresident of Latvia. Thus decisions having a posi-tive effect on human development can occur bycoincidence in the closed policy process, but sincethe results of such decisions cannot be predictedbeforehand, the closed policy process cannot beentirely relied upon by the public.

The public policy agenda

Generally it can be said the most importanthuman development policy issues are those thatinfluence the welfare, education and health of thepopulation. However, in public life and day-to-daypolitics some issues at certain times are moreurgent than others. For some issues political solu-tions are actively sought, whereas other issues arehardly mentioned. In order for a societal problemto be solved politically, it must first be placed onthe policy agenda.

The policy agenda is essentially a short list ofissues that are considered to be most important bythe wider public or the political elite. The creationof the agenda is a process where policy issues arearranged in order of importance. The policy agendacan to a large extent be regarded as individuals’

Closed channels(available to a small part of society)

- legitimate and large donations to political parties;- personal contacts based on lengthy acquaintanceship, competence and trust, the result being improved decisions.

- illegitimate payments or other benefits to parties, politicians or businesses connected with them;- personal contacts based on lengthy terms of acquaintance or friendship by which wider public interests are sacrificed;- use of “key people” and political “movers” enabling the adoption of laws that are not explained properly to the government or members of the Saeima;- use of security structures in illegitimate ways;- other channels not known to the public.

Open channels(available to the largest part of society)

- activities in non-government organizations, political parties;- expression of views in the media, participation in public discussions;- participation in referendums, elections;- participation in strikes, pickets, meetings, demonstrations;- public contacts with politicians, letter writing.

- violent mass demonstrations (not characteristic of political activity in Latvia).

T a b l e 2 . 2

Channels of political influence

Legitimate influence channels (acceptable in a democratic State and promoting human development)

Illegitimate channels (unacceptable in a democratic State and hindering human development)

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C H A P T E R 2

perceptions of the importance of the issues athand. This is shown quite accurately by publicopinion surveys.

In Latvia public opinion about the policy agen-da is regularly monitored. Survey respondents areasked to name three issues that they think shouldbe addressed as priorities by the government.Table 2.3 shows the most urgent problems asenvisaged by the population in July 2000. It alsoshows the percentage of respondents who viewedthese same issues as most important in March 2000and August 1999.

Table 2.3 reveals great concern among the pop-ulation about issues connected with the country’seconomic growth. At least five out of the ten mostimportant issues mentioned fall into this category,including unemployment and job creation, socialsecurity and social policy, raising the standard ofliving, education, economic development and theelimination of corruption. Of course, economicresources are also necessary for addressing all ofthe other issues mentioned.

Among the ten most important issues, the Lat-vian foreign policy priority of integration into theEuropean Union and other government prioritiessuch as external security (defence) and the integra-tion of society (minorities) are not mentioned. It issignificant that in the year 2000 the proportion ofrespondents who named corruption as an urgent

issue nearly doubled. This can be explained by theincreased attention accorded by the media, NGOsand politicians to this issue following the publica-tion of a World Bank study on the spread of corrup-tion in post-socialism countries. In previous sur-veys, corruption did not figure among the threemost important problems listed by respondents.This can be explained by the limited number ofchoices offered in the polls and by an apparentlytolerant attitude towards corruption by a large pro-portion of society, as revealed in other research(e.g. The Face of Corruption in Latvia).

The creation of the policy

agenda

In order for political solutions to be sought for aparticular problem, it must first be included in thepolicy agenda. In other words, it must be politicallyactivated and debated. Therefore, a very significantpolitical resource of political organizations (govern-ment, Parliament, parties, etc.) is their ability toactivate (include in the policy agenda) or deacti-vate (exclude from the agenda) the resolution ofparticular issues. The creation of the policy agendacan be explained exactly in this manner – as thepolitical activation or deactivation of issues.

July2000

3535

26271115168187

March 2000

2933

2222102174128

August 1999

4743

1833*268-19-

December 2000

3830

26232117161098

T a b l e 2 . 3

The most urgent policy issues from the public’s point of view (Compilation, in %, of respondents’ views about the three most urgent problems to be addressed by the government)

Problems

1. Social security and social policy issues2. Unemployment issues and the creation of new jobs3. Raising the population’s standard of living4. Education issues5. Corruption6. Development of the economy7. Health protection issues8. Alcoholism and drug addiction9. Agricultural issues10. Public order and security* Data not available

5 2


The mass media play an important role in thedevelopment of the policy agenda. Their role is soimportant that it can be compared to the role of themost influential State institutions: the Saeima and theCabinet. The mass media do not always determinehow people think, but in many cases they determineabout what people think. The interviews conducted bythe authors of this Report also confirm that all polit-ical organizations and interest groups involved withthe policy agenda must go through the media, whichholds a strategically important position.

There are several issues that the media havealmost continuously kept on their agenda during thelast few years. One of those is corruption. A fewyears ago the so-called Latvenergo three-million-lataffair came to the forefront of public attention due tothe diligence of the press, and corruption is stillhigh on the media’s agenda. In July, August and Sep-

tember of 2000, the Latvian national mass mediapublished 393 articles connected with corruption.

The corruption issue illustrates the influence ofthe media agenda (and also that of such internation-al organizations as the World Bank) on the generalpopulation. The greater the number of publicationsin the mass media about corruption, the greater thenumber of people who see corruption as one of thecountry’s three most important problems. Therefore,it is possible that the media has brought corruptionto the fore among the concerns of many people.

The media have kept the social (minority) inte-gration issue on their agenda in a similar manner.In 1999, close to 270 publications appeared in theLatvian mass media about the NaturalizationBoard and the naturalization process. Not only dothe mass media reflect the agenda of the popula-tion, they also actively develop it.


Ingrîda Blüma, Chairman of the Board of Hansabanka

My assessment of political processes in Latvia

In assessing the political environment in Latvia, I generally adopt the business point of view. Latvia’s political system has undergone great changes during the last ten years, and the country’s political environment now reflects a realistic multiparty system. All parties operating in Latvia openly cite the development of a truly democratic nation as one of their priorities.

Another undoubtedly positive signal to the international community and a new impulse within domestic politics was the election of Vaira Vî˚e-Freiberga as the President of the country. For the first time in the history of the Baltic nations, a woman has been elected as head of State. She has displayed a strong political stand and great resolve. With this step Latvia showed that it is more advanced than other new democracies in Central and Eastern Europe regarding women’s role in society.

It is harder to evaluate the aspect of political processes that specialists would call political culture. In other European countries, democracy has been maturing for decades, and these societies know how to ensure careful control over social processes in order to minimize conflicts of interest, and to keep the business and political arenas separate. In my opinion, the “fusing” – in any shape or form of political activity and entrepreneurship should not be allowed in a democratic nation. The power of leading political parties and high-ranking civil servants is generally extensive in any country. Therefore in my opinion politicians should not be allowed to get too deeply involved in regulating the economic environment. I think that entrepreneurship should be allowed to flourish under simple free-market conditions and healthy competition. These are issues that Latvian society still needs to work hard on.

A positive indicator of Latvia’s healthy attitude towards these issues is the mass media’s activity in analysing a variety of situations. Residents are also active and do not hesitate to state their opinion in various debates over economic issues. For instance, there was a surprising amount of citizens’ activism during the referendum regarding the privatisation of the Latvenergo energy supply company in June of 2000.

Latvian businesses have also matured, and are increasingly working through professional associations to publicize their viewpoints on various issues and legislation that affects entrepreneurship. I predict that over time these processes will only expand.

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C H A P T E R 2

Other political agents can and do form the coun-try’s policy agenda by making use of their right to ini-tiate legislation. This right is provided by Article 65of the Constitution to the President of Latvia, theCabinet, the Saeima commissions, no less than fiveSaeima deputies and – in certain cases – one-tenth ofthe electorate. The international community also hasan important role to play in setting Latvia’s policyagenda, as it prepares for accession to the EuropeanUnion and the NATO Alliance (see Information 2.1).

Differences between

the public and government

agendas

Research of the government agenda can be con-ducted by examining various information sources.At the official level, the government agenda is list-ed in the Cabinet’s declaration, which outlines thegovernment’s planned activities. The advantage ofthis source is that the Cabinet’s policy platform islisted in one single document. However, its defi-ciency lies in the fact that Cabinet declarations arenot always executed fully in practice. This discrep-ancy can be explained by the fact that governmentdeclarations are often created in haste by variouscoalition partners in order to gain rapid approval ofthe new Cabinet by the Saeima.

In the preamble of Premier Andris Bérziñß’s gov-ernment declaration, several tasks or spheres ofactivity are declared as being most important. Theseare foreign policy (accession to the European Unionand NATO), economic development, social issues,promoting trust in the government, strengtheningthe rule of law (each process in the nation should bebased on strict legal foundations), and increasing thecapacity of the State’s administrative institutions.

The priorities listed in the government declara-tion’s preamble coincide to a great degree with thepublic’s priority agenda. However, the governmentdocument does not directly mention agriculturalissues, corruption (unless strengthening the rule oflaw falls into that category), alcoholism and drugaddiction, public order and security, all of whichhave been mentioned in public opinion polls. Themost significant differences between both agendaslie in the high priority placed by the government onforeign policy issues, which in July 2000 were men-tioned as foremost by only 5% of the general public.

The role of foreign policy in the policy agendacan be assessed from at least two viewpoints. Somemay view that the government’s foreign policy pri-orities, including the question of integration intoEuropean Union, are significant only to the politicalelite, and that a great divide exists between publicopinion and the considerable resources allocatedby the government to further Latvia’s integrationinto the EU. From another perspective, it can beargued that integration into the European Union isnot solely a foreign policy issue, as Latvia’s eventu-al accession could help to solve many problemsconsidered important by the population. Several ofthe European Union’s priorities correspond withthose listed in Latvian public opinion polls, such asthe reduction of unemployment, the fight againstterrorism and organized crime (which includes thedrug trade), the strengthening of the economy,social security and assistance to farmers.

The political party relationship agenda has aparticularly great influence on the development ofthe government’s agenda (see Information 2.2).

Privatization on

the government and

public agendas

Since the first half of the 1990s, when Latvia ini-tiated the privatization of State companies, privati-zation has steadily remained at the forefront of thegovernment agenda, regardless of who has been inpower. However, this significant issue has not beenlisted among the most important priorities of thepublic at large.

The most important agents involved in resolvingLatvia’s privatization issues are political parties,political leaders, potential privatizers (influentialbusiness groupings) and the media, some of whichare controlled by the country’s leading businessgroupings. This has given rise to allegations thatprivatization has been “privatized” by the politicaland economic power elite.

The privatization of four large enterprises –Latvijas Ku©niecîba (the Latvian Shipping Company),Latvenergo (the State energy utility monopoly), Lat-telekom (the partially State-owned telecommunica-tions monopoly), Latvijas Gåze (the partially State-owned gas supply monopoly) has yet to becompleted, due to ongoing conflicts within the

5 4


political and economic elite. The management ofthe Latvian Privatization Agency, which is slated fordissolution, has also been a source of conflict.

In early 2001 the Delna branch of TransparencyInternational began to monitor the privatization of

Latvijas Ku©niecîba to ensure that the process pro-ceeded fairly and transparently. Nevertheless, alle-gations of corruption did not disappear, and the lat-est attempt to privatise the company endedunsuccessfully.


The European Union as a creator of Latvia’s policy agenda

Since 1997, when the European Commission began to prepare its regular progress reports on the European Union’s candidate countries, Latvia’s policy agenda has been determined in large part by the EU. As is known, in order for Latvia to join the Union, it must first adopt the EU’s Acquis communautaire, which covers 31 areas, including agriculture, manufacturing, education, social policy, domestic affairs, and law.

The European Commission’s annual reports on Latvia’s progress provide the government with a general assessment of Latvia’s success in carrying out the required reforms. The Accession Partnership documents prepared by the European Commission in order to “promote the priority areas for further work within one common framework” list the political and economic tasks that Latvia and other EU candidate countries must accomplish in the short and medium term, particularly regarding internal markets, agriculture, fisheries, the power industry, transportation, employment and the social sphere, economic and social cohesion, the environment, law and internal affairs, administration and the strengthening of court capacity. (For more information, see Accession Partnership 1999. Latvia // www.europa.eu.int. For more information about Latvia’s Euro-integration efforts and their links to human development, see Chapter 1 of this Report.)

Based on the European Commission’s recommendations, Latvia has developed a National Programme for the Adoption of the Acquis, whose purpose is to implement the priorities listed in the Accession Partnership. For example, while such questions as civil service reform, the strengthening of public administration, and the termination of the fixed telecommunications monopoly are indeed important for Latvia itself, they have been placed on the policy agenda because a failure to do so would hamper accession negotiations with the European Union (and in the case of telecommunications, relations with the World Trade Organization as well). A paradoxical situation has arisen under which international institutions have acquired the opportunity to influence the Latvian policy agenda, while local interest groups and NGOs have rather limited influence channels.

Although in some cases questions linked to Euro-integration have resulted in heated debate, as was the case with the import of pork from European Union countries, most issues liked with integration into the European Union do not reach the agenda of the public. Potential conflicts with the public may arise after the enforcement of individual EU standards, which may affect various interest groups.

Euro-integration issues arrive on the government’s agenda almost without any wider public participation. While this agenda-forming process is not secret (anyone can read up on Latvia’s Euro-integration plans), the general lack of public interest has resulted in the adoption of such decisions within a narrow group of civil servants. Consultative councils, where ministry officials and interested groups discuss legal regulations that need to be adopted, are the exception.

One project initiated in 2000 by the European Movement in Latvia and supported by the Baltic-American Partnership Program is a positive step forward. This project seeks to promote the involvement of NGOs in the implementation of the European Union’s legal norms in Latvia.

Since currently the wider public is not displaying an active interest about certain issues arriving on the government’s agenda, the government itself should promote public interest in its activities, and within its means, extend its contacts with potential interest groups and NGOs. Ongoing consultations between government institutions and sectoral associations (such as the Chamber of Industry and Trade) concerning Latvia’s EU negotiations show promising potential.

5 5

C H A P T E R 2

Public participation in the privatization of thecountry’s largest enterprises is barely noticeable.This may be explained by the fact that the linkbetween privatization and human developmentseems to be indirect, in the sense that a success-ful privatization process might serve to promotemacroeconomic growth and improve overallhuman development indicators, but should havelittle immediate effect on the public at large.

The as yet uncompleted privatization of Latven-ergo was subject to a period of brief but intensepublic attention, when the Latvian Social-demo-cratic Workers’ Party (LSDSP) conducted a success-ful campaign to collect 130,000 signatures in sup-port of a bill to limit the extent of Latvenergo’sprivatization. Cynical observers believe that thiscampaign was actually the brainchild of oil transitgroupings from Latvia’s port city of Ventspils, whichhave contributed to the LSDSP’s party coffers. Pub-lic discussions about the privatization of Latvenergoand other large companies have been limited most-ly to media debates by various specialists, journal-ists, and politicians.

Because an objective evaluation of the privati-zation of such large companies requires economic

expertise, and because only well-funded individu-als and enterprises can apply for a meaningfulshare of such companies, the majority of the publicis excluded from the evaluation and decision-mak-ing process of issues connected with privatization.A more extensive presentation of information, moreopenness in the preparation and adoption of suchdecisions, and particularly the promotion of publicdiscussions might decrease the sense of estrange-ment among the population. Experts shouldstrengthen the public’s level of competence.

The privatization of Latvia’s largest enterprises,or lack thereof, will influence the country’s macro-economic situation and gross domestic product(GDP) growth rates (which are significant humandevelopment indicators), as well as the microeco-nomic situation of many companies. Unfortunately,as the public is given only minimal opportunities tocontrol the process, and as powerful groupingshave vested interests in the outcome, privatizationissues are being decided in a closed environmentand in an unpredictable manner.

As a result of various activities by interestedparties, the political conflicts and adopted deci-sions are not always comprehensible to the public


The party relationship agenda

The official government declaration does not really reveal the actual government agenda or those issues that are truly important to the Cabinet and to the political forces forming the government. One agenda indicator lies in those issues that appear to be the most significant in the relationships between the government-forming parties. In September 2000 an open conflict broke out between the Popular Party (Tautas partija) and the Fatherland and Freedom (TB/LNNK) party, both of which are part of the ruling coalition. The Popular Party was angered by Fatherland and Freedom’s refusal to support the appointment of its party member, Edmunds Krastiñß, as head of the country’s powerful Finance and Capital Market Commission, as well as by Fatherland and Freedom’s proposals to amend the Law on Power Industries. The Popular Party – through its Minister of the Economy, Aigars Kalvîtis – reacted by preparing changes to the statutes of the Latvenergo State energy supply monopoly, which Fatherland and Freedom accurately perceived as an attempt to reduce its influence on Latvenergo’s Council. Fatherland and Freedom responded by supporting an unsuccessful motion by the opposition to remove Aigars Kalvîtis from office. During this conflict, the stability of the government was called into question.

Here we can discern several issues of importance to two of the government-forming parties: their own general relationship, the head of the Finance and Capital Market Commission, amendments to the Law on Power Industries, changes in the statutes of Latvenergo, and the post of Minister of the Economy. Hardly any of these issues apply directly to the most significant problems of the nation. Most of them (including the portfolio of the Minister of the Economy) do not resolve those questions that are seen as priorities by the public. It appears that such conflicts have served to widen the growing divide between the public and the political elite of the country.

5 6


and are deepening the estrangement between thegovernment and society. While questions concern-ing the general standard of living and economicdevelopment dominate the agenda of the public,these priorities cannot be clearly seen in theactions of political parties and their leaders, whoseem to be according greater importance to the dis-tribution of economic resources among variousbusiness groupings.

Since the privatization process is nearing com-pletion and since the government intends to liqui-date the Latvian Privatization Agency, the work ofthis institution should be objectively and independ-ently evaluated to determine the successes and fail-ures of its activities. Such an evaluation would helpto ensure the future observation of public interestsin situations where the State controls significant eco-nomic resources, and could be carried out by one ofthe policy institutes that is currently being estab-lished (see the analysis in Chapter 4).

Decision-making in the

Saeima

The right to present issues for discussion in theSaeima is accorded only to a limited number of per-sons or institutions: the President, the Cabinet,Saeima commissions, at least five Saeima deputies,and one-tenth of registered voters. These submis-sions must be in the form of draft laws. Only thePresident has the right to initiate legislation that ismore generally formulated, thus leaving room fordeputies to work on the fine print themselves.

The Saeima’s plenary sessions are open. Draftlaws go through three readings, except for thenational budget and urgent bills, which go throughtwo readings.

Each draft law is evaluated by the relevantstanding parliamentary commission, which mayalso offer alternative legislation. After receiving thecommission’s evaluation, the Presidium of theSaeima decides whether to include the bill on theparliamentary agenda. A draft law that has beenrejected by a Saeima commission must neverthelessbe presented to the Saeima for evaluation in caseswhere the Cabinet or at least one-tenth of votersdemand it.

During the first reading, the general principlesof the draft bill are discussed. The responsible par-liamentary commission then compiles amendment

proposals by individual deputies or factions, otherSaeima commissions, the President, the Prime Min-ister or other Cabinet ministers for the bill’s secondreading. The Saeima examines the bill by sectionsduring the second reading and debates are permit-ted only on individual parts of the bill. Additionalproposals are again compiled by the relevantSaeima commission for the third reading. During thethird reading the Saeima discusses only those sec-tions that have received amendment proposals.Following the acceptance or rejection of these pro-posals the entire bill is put to a vote. If the Saeimarejects the bill, it is returned to the relevant com-mission and prepared for another third reading. Ifthe Saeima then passes the bill as law, it is sent tothe President for proclamation. If the President pro-claims the law, then it must be published in thenewspaper Latvijas Véstnesis (the official Gazette ofthe Republic of Latvian).

The President has the right to delay the procla-mation of legislation and may also send it back tothe Saeima for review, along with a motivated letterexplaining the reasons for this. In such a case theSaeima assigns the bill to a commission for reviewby a certain date, after which the bill is againpassed to a vote according to the regulations apply-ing to third readings. If the Saeima does not take thePresident’s proposed amendments into considera-tion and passes the bill again unchanged, then thePresident must proclaim it.

By request of at least one-third of Saeimadeputies, the President may withhold the procla-mation of a law for up to two months. This provisionis provided to give time for the collection of signa-tures by at least one-tenth of eligible voters, which,if successful, is followed by a referendum on thebill, or to allow the population itself (at least one-tenth of the country’s voters) to initiate alternativelegislation. If the required number of signatures isnot collected for the holding of a referendum or forthe presentation of alternative legislation, then thePresident proclaims the law after two months.

According to the Constitution, certain laws can-not be put to a national referendum. Among theseare the national budget and laws concerning loans,taxes, railway tariffs, customs duties, the militarydraft, mobilization and demobilization, declara-tions of war, conclusions of peace, the implementa-tion or cancellation of states of emergency, andagreements with foreign countries.

The structure of the Saeima and the principles ofits work provide numerous opportunities for follow-

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C H A P T E R 2

ing its decision-making processes. This is promotednot only by the openness of the discussions at theSaeima’s plenary sessions – which are broadcast byradio – but also with the assistance of the Internet,through which it is possible to establish the statusof draft legislation. Nevertheless, public opinionsurveys reveal a consistent lack of confidence andtrust in the Saeima, which is possibly fuelled by dis-satisfaction in the Parliament’s decision-makingprocesses.

The Saeima is the most influential and mostpoliticized State institution, where distinct publicsegments and their interests are represented bymeans of political parties. The 5th Saeima (1993-1996)was dominated by right-wing political organizationsactively working to ensure a rapid transition to amarket economy and extensive privatization, withlittle attention paid to the resolution of socialissues. This and other factors led to the election ofpopulist parties in the 6th Saeima (1996-1999). Unsuc-cessful attempts to form a left-wing centrist govern-ment led to the fragmentation of these parties andto the formation of centre-right government. Theinfluence of populist parties has decreased in thecurrent 7th Saeima and centre-right parties are still inpower, but left-wing parties have made a seriousentrance in the parliamentary arena.

As mentioned in the 1999 Report, the Saeima hasbeen dominated since 1993 by centrist or right-wingparties, but these have been unable to unite theirefforts to promote a harmonious national develop-ment concept that could form a basis for Cabinetdeclarations. The lack of such a concept is exacer-bated by frequent government changes, whichoccur almost once a year. While a draft NationalDevelopment Plan has been developed, it has yetto be publicly discussed and adopted by the

Saeima. A working group created by the Prime Min-ister has also prepared a sustainable developmentconcept that has been made public, but it too, hasyet to be discussed and implemented.

One can also observe the lack of a clear devel-opment concept in individual party policies. This isevident not only in the slow pace of fulfilling pre-election promises, but also in the divergence ofparty activities from their documented pro-grammes. Party representatives agree that tacticalconsiderations and the interests of party sponsorsgreatly hamper efforts that might be directed toimplementing certain party platforms.

Compared to the early 1990s, the role of legisla-tors in the preparation of bills has been greatlyreduced and increasingly undertaken by the Cabi-net (see Table 2.4). As was pointed out by a deputyof the Saeima: “The Saeima at this moment screens andclarifies the government’s proposals.” This pronounce-ment also indicates various other tendencies,including the ruling coalition’s tendency to rejectand disregard the usefulness of bills submitted bythe opposition. This tendency is in sharp contrastto the widely disseminated views by deputiesthemselves (89% of those polled), that debates anddiscussions in the Saeima should ensure the reviewof opposition viewpoints and proposals. An over-whelming majority (86 %) of surveyed Saeimadeputies felt that discussions in the Parliament arean important element in policy-making, becausethey provide opportunities for the public debate ofcontroversial questions. This point of view corre-sponds to that of the public, of whom over four-fifths (81%) believe that opposition arguments mustbe given due consideration, and of whom 61% seediscussions in the Saeima as a significant policy-making element.

T a b l e 2 . 4

Institutional and voter activity in submitting bills to the Saeima

5th Saeima6th Saeima7th Saeima*

Cabinet

Total

472715513

Monthlyaverage

172020

Saeima deputies

Total

182374120

Monthlyaverage

7105

Number of bills submittedSaeima commissions

Total

177244109

President

Total

842

Monthlyaverage

674

Voters

Total

001

* Until December 2000.

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The prevalent disregard of opposition propos-als has not promoted good fellowship in the Parlia-ment and has compelled the opposition to use rad-ical, yet constitutional methods to promote itsinterests, thus contributing to a strained politicalclimate in the country. In addition, the insufficientdiscussion of opposition proposals and theirunsubstantiated rejection has led to opposition-induced delays in the adoption of decisions (e.g.the 1999 amendments to the Law on Pensions) andtangible financial losses (e.g. the collection of sig-natures to maintain Latvenergo in State hands).

Secondly, the fact that the government’s legisla-tion-drafting role has increased indirectly meansthat the number of alternative solutions hasdecreased – and that the possibility of choice hasnarrowed – because in most cases few changes areimplemented in the government’s proposals, andalternatives are not sought. This is determined bythe fact that the Saeima relies to a great extent onthe proposals of its commissions, which co-operatequite closely with the government’s ministries.

The Saeima’s resources cannot compensate forthe decreasing number of offered alternative solu-tions. Many parliamentary commission consultantsalso perform technical and administrative duties,and these positions frequently are given to senioruniversity students. Therefore, the consultants’opportunities to work out alternative solutions arelimited.

The Saeima deputies’ assistants also do not con-tribute sufficiently to the development of bills, andthere are no analytical services available to facili-tate the decision-making of parliamentarians.

In such a situation the main information sourcefor alternative proposals comes from consultationswith sectoral associations or other groups that arespecifically interested in the passage (or rejection)of a particular bill. Consultations with individualentrepreneurs are a less significant source of initia-tive for legislation, and consultations with tradeunions also occur to a very small degree.

Saeima deputies rarely commission officialresearch from independent experts, although theytrust them the most. Instead, they prefer to consultsuch experts on an unofficial basis. Consultationswith foreign experts or international institutions arerarely conducted.

Deputies mention consultations with voters asone way to improve decision-making, yet politi-cians admit that public opinion is rarely taken intoconsideration. This coincides with the view by

numerous Saeima deputies that opportunities forthe public to influence parliamentary decisions areextremely limited. The above leads one to con-clude that consultations with voters (the public) aremostly formal in nature and create a mere image ofpolitical participation.

In the context of these tendencies one can agreewith the viewpoint of many Saeima deputies that themost influential State institution is the Cabinet.However, Saeima decisions are also greatly influ-enced by the parties of the ruling coalition, politicalparty leaders, leaders of business groupings, theso-called “grey cardinals,” and the mass media. Ininterviews for this study, politicians mentionednumerous times that in Latvia no more than 50 peo-ple have the capacity to substantially influence pol-icy-making in the country, and they are not electedSaeima deputies or government ministers. ManySaeima deputies claim not to trust political partiesor leaders of business groupings, or influentialbehind-the-scenes activists.

Bearing the above in mind, one can concludethat a certain seclusion, centralization, and elitismis often characteristic in the decision-makingprocess of the Saeima, particularly when dealingwith economic issues of interest to business group-ings or sectoral associations. Interviews with politi-cians revealed that in such cases a direct dialoguetakes place between party leaders and leaders ofthe interested groupings. The “grey cardinals” playthe role of contact makers and consultants in thisprocess, yet they are not lobbyists who performcertain tasks for an immediate fee and who co-oper-ate with all parties at the same time. There are veryfew professional lobbyists in Latvia, as political bar-gaining, for the most part, takes place directlybetween interested parties.

Although most of the public believes that politi-cians operate under the complete control of theirparties’ financial supporters (a view that is rein-forced by the direct dialogue between parties andtheir sponsors), politicians themselves see such aviewpoint as overly simplistic and stress that theytry to balance the interests of various conflictinggroupings in order to attain greater independencein the adoption of decisions.

NGOs, citizens’ groups, other initiative groupsand municipal leaders also have little or no influ-ence on parliamentary decisions, as these politicalagents have few resources of power at their dispos-al. However, politicians know very well that thepublic controls the most important resource

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required by them – votes during elections. There-fore, many politicians consider the mass media asimportant players in the policy-making process.

Public participation in the policy-making processshould be promoted for several reasons. Firstly, itwould improve the public’s ability to participate indecision-making over the longer term. Secondly,certain elements of the public are already capableof formulating valuable suggestions, and the per-ceived disadvantage of longer and more inclusivediscussions more than offsets the greater disadvan-tages involved in repealing an ill-adopted decision.Thirdly, increased public participation wouldimprove political dialogue and decision-makingquality, and would decrease the chance for smallgroupings to have undue influence on decisions.Fourthly, public participation and the overcoming ofscepticism would lessen the gap between the pub-lic and the political elite, as well as open paths fornew ideas and new politicians. Here the mass mediaare perceived to be among the most importantagents for promoting public participation.

On the parliamentary level there are severalinstitutional mechanisms that provide the publicwith opportunities to participate in the policy-mak-ing process. Deputies elected to the Saeima occa-sionally arrange meetings with their constituents,and may submit suggestions for legislative amend-ments based on recommendations from their vot-ers. The public can examine bills that have beensubmitted to the Saeima through the Internet(www.saeima.lv). It may also initiate legislation on itsown or turn to the President, who may initiate leg-islation on the public’s behalf. In addition, peoplemay organize pickets, demonstrations, petitiondrives, and other activities.

The public receives a regular flow of informationabout the work of the Saeima, which is constantlyunder the scrutiny of the press, radio and televi-sion. However, it is not always easy to find informa-tion that is essential to the adoption or influencingof the decision-making process. Politicians oftenrefrain from speaking about problems analyticallyand usually answer questions in a formal or superfi-cial manner. This sometimes raises public doubtsabout their professionalism and competence. Themass media themselves often fail to provide ana-lytical evaluations of decisions taken, as thisdepends on the professional qualifications of jour-nalists, the ideological bent of the mass media, andthe level of editorial autonomy in several presspublications. Therefore, the acquisition of informa-

tion that is essential for conducting rational analy-ses is not always possible, unless political analystsand experts are involved.

Political dialogue with the wider public intensi-fies during election campaigns at both the nationaland municipal level. However, the consistent fail-ure to fulfil pre-election promises, even among theruling coalition, indicates a lack of political respon-sibility, which in turn promotes the development ofcynical views in society about politics and politi-cians, and decreases public trust in the country’selected institutions.

Politicians’ lines of communication with sectoralassociations and in particular with business groupingsare the most enduring. Since these groups haveaccess to a greater degree of useful information,greater efforts are expended by politicians in main-taining communications links with them, either direct-ly or through the mediation of the “grey cardinals.”

Among parliamentary politicians there is talkabout the necessity to reform the policy-makingprocess. Saeima deputies interviewed for this sur-vey viewed the lack of competence and democratictransparency, as well as the selfish interests of par-ties, as impeding factors. While they do see corrup-tion and the interests of business groupings as anobstacle to quality decision-making, they believethat better results would be obtained by improvingpolitical activity, involving more young, competentprofessionals and perfecting existing laws.

Even though the solutions mentioned by politi-cians could significantly improve the policy-makingprocess, the implementation of clear and conceptu-al policies in an atmosphere of political responsi-bility would provide a far greater investment indecreasing the confidence gap between the publicand the political elite. It would also raise the pres-tige of politicians and create favourable conditionsfor the advent of a young and competent genera-tion of politicians in Latvian parliamentary politics.

Decision-making

in the government

The highest collegial executive institution inLatvia is the government, or Cabinet, which isapproved by the Saeima. The Cabinet includes thePrime Minister, the Deputy Prime Minister, ministerswho are politically responsible for the work of theirministries, and state ministers who are politically

6 0


responsible for the work of individual sectors of theirrelevant ministries. The state secretary of each min-istry is its highest civil servant. He or she managesthe ministry’s administrative activities and co-ordi-nates the actions of ministry departments and divi-sions. Each ministry also has a parliamentary secre-tary, who maintains a permanent link between theministry and the Saeima and its commissions, andwho is appointed by the Prime Minister.

Draft documents for both individual ministriesand the Cabinet are mostly drawn up at the depart-mental level. If a document is being prepared forapproval in the Cabinet, then the draft – which isfirst approved in the relevant ministry and accept-ed by the Minister – is taken for discussion at ameeting of state secretaries. Other ministries orinstitutions under the authority of the Cabinet pro-vide their opinions and recommendations regard-ing the document no later than two weeks after itsexamination at the state secretary meeting. In cer-tain cases, an evaluation must also be receivedfrom the Latvian Local Government Association andfrom the European Integration Bureau.

The draft document is evaluated at a Cabinetmeeting usually no later than two weeks after it hasbeen examined to co-ordinate viewpoints and sup-ported at a Cabinet committee meeting. Cabinetcommittee decisions are usually taken unanimously.

Issues may be examined at Cabinet meetingsonly if all members of the Cabinet have receivedthe relevant materials beforehand. Cabinet meet-ings are not open to the public and only a restrict-ed number of persons may participate in them. TheCabinet adopts its decisions by a simple majorityvote. The Prime Minister, Deputy Prime Minister,ministers and ministers for special assignmentshave voting rights at Cabinet meetings. State minis-ters also have voting rights regarding issues thataffect their sectors. The Prime Minister may inviteexperts to Cabinet meetings for advice and expla-nations on the issues put up for discussion.

Under Article 81 of the Constitution, the Cabinet isentitled to adopt regulations with the force of lawbetween sessions of the Saeima. In accordance withthe Rules of Order of the Saeima, the Cabinet mustsubmit these regulations to the Saeima no later thanthree days after the new session of the Saeima hascommenced. If the Saeima does not transfer theseregulations for examination to standing committees ordoes not approve them in the final reading within aperiod of six months after they have been transferredto committees, then the regulations are repealed.

Citizens do not have many institutional mecha-nisms with which to influence the preparation andadoption of decisions by individual ministries orthe Cabinet. The public may direct proposals andrecommendations to State institutions, and maygain a certain insight into the legislation preparedby ministries from the State Chancellery’s homepage on the Internet (www.mk.gov.lv), where informa-tion is available regarding all draft documents sub-mitted at state secretary meetings.

As mentioned previously, Latvia has a parlia-mentary supremacy system, and the direction ofeach government’s activities is in fact is decided bythe Saeima, as it votes for the approval of the Cabi-net following debates regarding the governmentdeclaration.

The government declaration is created by nego-tiation and is based on the programmes and tacti-cal interests of the political parties belonging to thecoalition. Normally the declaration is not based onclearly defined models of national development –not only because compromises need to be foundbetween the various political forces, but alsobecause there is a lack of alternative models.

The average government lifespan since theelection of the 5th Saeima in 1993 has been about10 months. Notwithstanding such instability, theoverall political orientation of Latvia’s governmentshas remained unchanged, which is also reflected inthe government declarations. Except for the StateForeign Policy Concept, which was accepted in1995, no strategic national development docu-ments have been adopted. Therefore, it is not sur-prising that the cornerstones of Latvia’s internaland external policies are based on the country’sefforts to integrate into the European Union and theNorth Atlantic Treaty Organization (NATO).

A programme prepared several years ago by theLatvija 2010 economists’ association has become anunofficial national development concept that isreflected in government declarations. This pro-gramme, which is based on a neo-liberal paradigmand Washington Consensus principles, provides fora rapid transition to a market economy, the wide-spread privatization of government property, mini-mal interference of the State in economic activity,and the maintenance of macro-economic stability.The resolution of social issues has been given asecondary role.

However, this programme has lost some of itsrelevance due to several significant factors, such asthe mixed results of privatization to date, the aggra-

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C H A P T E R 2

vation of social problems, the banking crisis of 1995,the political instability of transit business, and par-adigm reviews in the world political economy.Therefore, the recent completion Latvia’s nationaldevelopment plan and Latvia’s development strat-egy project can be evaluated positively.

Latvia still has no strategic vision regarding itsfuture that has won clear political support andacceptance at the State level, and there is no ade-quate development concept. The lack of such basicprinciples significantly complicates co-ordinateddecision-making.

The lack of widely accepted development con-cepts is partly compensated by two factors. Firstly,Latvia’s unchanged Euro-integration priority hasled to the harmonization of Latvian regulatoryenactments with European Union documents. Sec-ondly, several sectors in the period following therestoration of independence have had develop-ment concepts and sector policy documents pre-pared (see Chapter 1). However, one cannot helpbut notice that these concepts and documents havenot been mutually co-ordinated.

Draft decisions regarding policy priorities andconcrete solutions are usually prepared by the rel-evant ministry’s own specialists, who consult main-ly with colleagues from other departments withintheir own ministry, as well as interested groups andNGOs. A slightly unusual fact is that ministry man-agement and politicians play a relatively smallerrole in preparing both tactical and strategic deci-sions (see Chapter 4).

This is partly explained by another observation.In a September 2000 survey of ministry departmentdirectors, half of the respondents indicated thathigher-level policy makers do not support thempolitically, and that the priorities advanced by thegovernment do not conform to the real needs of thecountry. The department directors also expressedwidespread distrust of both government and oppo-sition parties, party leaders, ‚minences grises (“greycardinals”), and leaders of economic groupings.From the above, one can surmise that a gap is form-ing between politically appointed ministry leadersand the civil servants working under them.

The services of independent experts are usual-ly used very little, and the results of the survey forthis study suggest that the attitude towards them iscontradictory. On the one hand, most respondentstrusted professional experts and indicated thatthere is a shortage of them in the country. The lackof professional employees and the shortage of

funds for paying them was also seen as a significantobstacle that is not allowing for an improvement inthe preparation of decisions. On the other hand,respondents expressed dissatisfaction with thequality of expert studies. Government commissionsare delayed or fulfilled superficially, and concretesolutions and alternatives are not offered. This maybe one of the reasons why unofficial consultationswith experts are undertaken more often (as is thecase in the Saeima, mentioned earlier in this Chap-ter). The assistance of international organizationsand experts is used even less.

Consultative councils and discussions withsocial partners have a generally restricted role inthe preparation and adoption of decisions. One ofthe oldest such institutions is the National Tripar-tite Co-operation Council, which was established in1993 to promote discussions among employers,employees and the government. Some achieve-ments were reached, such as increases in the mini-mum wage, social guarantees for the employees ofinsolvent undertakings, and the co-ordination ofdraft worker protection laws. Nevertheless, in sev-eral cases the government and the Saeima haveignored the Council’s recommendations and agree-ments reached with it, thus reducing the relevanceof such consultations. Similarly the Council of theEconomy, which was established in 1999 under theMinistry of the Economy and which is composed ofmany acknowledged specialists, cannot boast of alarge impact upon policy-making.

The impact of large population groupings on theCabinet’s policy-making procedures has been negli-gible. Politicians and ministry employees admit thatpolicy-makers do not sufficiently observe the inter-ests of the public and that there should be greaterpublic participation in policy-making. Yet many alsodoubt whether ordinary citizens are capable of con-tributing to policy-making processes in a meaningfulmanner. Unfortunately, the public usually does notreceive sufficient information regarding draft deci-sions. Only those documents that have alreadybeen submitted to state secretary meetings areaccessible in the Internet, and information regardingthe earlier stages of the formulation of draft deci-sions is provided only in individual cases.

Cabinet regulations regarding policy-makingprocedures provide for draft decisions to be care-fully co-ordinated with interested institutions, andhere the opinion of the Ministry of Finance is espe-cially important. This ministry often has the finalsay, as it can reject the allocation of additional

6 2


funds for the implementation of draft regulations orlaws. Therefore, it is sometimes insufficient for the-oretically good laws to be adopted (such as theFreedom of Information Law) if there are insufficientfunds for their implementation (as in the educationof civil servants).

However, the Prime Minister may ensure thatany issue is examined in detail at a future Cabinetmeeting, thus by-passing the usual co-ordinationprocedures. Yet if politically sensitive issues arerepeatedly examined in this manner, then differ-ences of opinion among the government’s coalitionpartners can arise. This was the case when AndrisÍ˚éle was Prime Minister from 1995-1997 and 1999-2000. On several occasions, the Premier wasreproached for convening Cabinet meetings onissues about which views had not been co-ordinat-ed beforehand.

It must be said that unofficial discussions bymembers of the governing coalition on the co-ordi-nation of views prior to the decision of variousissues do occur in the Co-ordination Council, orCoalition Council, which is a forum for the expres-sion of party interests and political bargaining.Since the Cabinet structure is centralised, thiscouncil could be a productive forum for the govern-ment’s coalition partners to influence the policy-making process and to arrive at common positions,particularly since its meetings are reflected very lit-tle in the mass media. However, interviews withpoliticians indicate that these council discussionsare used mainly for the exchange of information andto establish each party’s position on a certain issue,rather than to formulate a common point of view.Moreover, the manner in which this council func-tions and the degree of its effectiveness is largelydependent on the Prime Minister.

Issues submitted to the Cabinet by ministries inwhich party representatives have no direct interest,but for which there are possible alternative solu-tions, are initially discussed in the Cabinet at theconceptual level. This simplifies the co-ordinationof draft laws and accelerates the arrival at a consen-sus. Once the Cabinet has taken a conceptual deci-sion, the ministry responsible prepares a concretesolution based on the approaches approved by theCabinet.

The proportion of conceptual issues on the Cab-inet agenda is fairly large, and the government isactually overloaded with an excessive number ofminor issues to scrutinize. These should beresolved at a lower level, thereby increasing the

opportunities for strategic management by theCabinet. However, government’s civil servants arereluctant to assign tasks to lower-level executiveinstitutions, as they do not have faith in the capaci-ty of such institutions to deal with the issuesentrusted to them.

One problematic feature of the policy-makingprocess is the lack of horizontal co-ordination. Thegovernment’s ministries do not sufficiently co-ordi-nate the advancement of priorities and the formu-lation of draft laws among themselves. This situa-tion has resulted from the centralization ofexecutive institutions, which is furthered by theCabinet’s decision-making procedure regulations.In an attempt to eliminate this problem, the StateChancellery established a Policy Planning and Co-ordination Department in September 2000. Its prin-cipal task is to improve policy-making in the Stateapparatus, prepare relevant legislative recommen-dations, co-ordinate the implementation of thegovernment declaration, analyse the activities ofState institutions, and generate ideas for the coun-try’s development strategy.

The lack of a unified strategy and co-operationmechanism, along with the introvertive tendenciesin each ministry, are also manifest in inter-ministrystruggles for influence and funding, which are repli-cated between central and local government struc-tures. Such an undesirable state of relations doesnot allow the institutions involved to fully performtheir functions and encumbers the State adminis-tration system.

It is becoming apparent that ministers are notalways able to control the ministries entrusted tothem. Although in Latvian circumstances it is possi-ble for party scores to be settled through ministrysubordinates, the principal contributing factor tosuch conflicts is, in all probability, the increasinginfluence of the civil service, which is furthered bythe frequent changes of government.

However, the role of the civil service in the pol-icy-making process is not overly large. Only 4% ofpolled ministry department directors claimed tohave sufficient knowledge about the policy-makingprocess to take part in it in a meaningful manner,and only 32% believed that their initiatives couldinfluence the views of policy-makers. Moreover,both the public at large and local governmentemployees, as well as civil servants themselves,rate the influence of ministry employees far behindthat of economic groupings, “grey cardinals,” theSaeima, the government and political parties.

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C H A P T E R 2

A tendency to politicise the higher civil servicehas been observed in Latvia. This was especiallyevident in personnel changes at the Ministry ofEducation and Science in 2000, as well as at theMinistry of the Interior. Thus, the civil serviceappears to be progressively abandoning its politi-cal neutrality and professional competence, whichare so necessary for the successful administration ofany country, and is acquiring increasing politicalloyalty to the ministers in office. Moreover, in suchcases hierarchical subordination is often ignoredand the principles of professional career advance-ment are distorted.

Decision-making in local

governments

The duality of local governments (such as munic-ipalities) fundamentally affects their policy-makingpractices. On the one hand, territorial local govern-ments are elected in general elections, and there-fore society has given them a political mandate. Onthe other hand, the autonomy of local governmentsis limited by the fact that their functions are fixed inlaw and can expand or contract in accordance withnew decisions by the Saeima or the Cabinet. Localgovernment finances are regulated through theLocal Government Equalization Fund, which meansthat in a sense, local governments can be seen asrepresentatives of the State’s executive institutionsin Latvia’s districts, cities and parishes. In fact, upuntil 1998 local governments were considered as acomponent of the State executive authority.

The duality of local governments is highlightedat annual discussions with the government regard-ing a wide spectrum of issues. Experts in the workof local governments believe that the results ofthese discussions depend on the attitude of thegoverning coalition towards local governmentissues and on the will of the national government toimplement achieved agreements. In recent yearsgovernment politicians appear to have adopted amore favourable attitude towards local govern-ments than previously. One reason for this is thegreater degree of public trust in local governmentsthan in political parties. A second contributing fac-tor is the Council of Europe’s continued monitoringof the Latvian government’s relationship with localgovernments, following the submission of a com-plaint by Latvian local governments in 1996.

Another fundamental problem lies in the fact thatthe country’s administrative territorial and regionalreform has not been completed. The slow course ofthis reform reflects the unclear policy of the State’scentral institutions towards local governments. Sincethe reestablishment of independence, elected sec-ond-level local governments have been abolished,with district management assigned to delegatedcouncils made up of, and chosen by, the chairper-sons of city and parish councils in each district. Theeffectiveness of such an innovation is doubtful, as inthese district local governments it is not easy toexamine issues that transcend the dimensions ofone single administrative territorial unit.

The continued uncertainty over the final form ofan eventual regional reform model is giving rise todisagreements and competition between potentialregional centres, and is encumbering their co-operation.

A new accent is now being placed in the estab-lishment of so-called planning regions, in order topromote the attraction of finances from the Euro-pean Union’s structural reform funds. The estab-lishment of such planning regions is an acknowl-edgement of the necessity to create largerterritorial entities with tangible economic potential,and where resources could be utilised more ration-ally. The as yet uncompleted administrative territo-rial reform is directed to this end, and is beingaccepted with great misgivings by many local gov-ernments, as confirmed by the results of a surveyconducted in October 2000 with local governmentleaders. The slow pace of voluntary local govern-ment amalgamation also testifies to this reticence.Most local government leaders support closer co-operation with neighbouring parishes or cities, butreject amalgamation as an option. They argue thatthe marginalization of peripheral local governmentswill increase, and that accessibility to services willbe reduced for inhabitants and institutions locatedoutside of the main regional centres.

In addition to their direct duties, local govern-ments perform an important political link betweenthe country’s administrative institutions and itsinhabitants, as they are the State institutions withthe closest links to the people. Only 20% of this sur-vey’s respondents have met with Saeima deputiesor ministry department heads, while 30% have metwith their local government councillors. A similar(though less marked) tendency can be seen in theproportion of letters written to politicians, min-istries and local government representatives.

6 4


However, geographical proximity is not the onlyfactor determining the closeness of links betweenthe country’s inhabitants and local governments.Saeima deputies, ministry department heads, mem-bers of the public and local government leaders allunanimously agree that local government decisions(as opposed to Saeima and Cabinet decisions) havethe greatest impact on the public. The frequency ofcontact with any public institution also depends onthe extent to which people believe they can influ-ence decision-making, and the degree to whichtheir views are taken into account.

Over half of the local government leaders ques-tioned for this study asserted that the public wish-es to participate in policy-making activities, andthat people often use public meetings as a meansto scrutinize important issues. However, local gov-ernment politicians also believe that many inhabi-tants are not sufficiently competent to resolveimportant local government issues.

Local government politicians place a greatdegree of trust in professional experts, even thoughthey rarely use their services. Consultations with

ministries and Saeima politicians also occur rarely.This is determined partially by the general scepti-cism and distrust that local government leaders feelfor these institutions, and by the perception thatopportunities for achieving favourable results arevery limited. More than 90% of surveyed local gov-ernment leaders believe that Latvia lacks a clearState policy regarding local governments, and thatthe national government’s priorities do not conformto the actual needs of local governments. Localgovernment leaders also said that they do not feelsupported by higher-level policy makers, and thatgovernment priorities frequently change, whichmakes the development course of local govern-ments unpredictable in the long-term.

This sense of isolation from higher-level politi-cians is compounded by the local government viewthat decisions taken by the Saeima and the Cabinetare not sufficiently transparent, and that neitherlocal government politicians nor the public can domuch to influence them.

There is a widespread view by both local gov-ernment leaders and the public that decisions in


Ojårs Kalniñß, Director of the Latvian Insitute

A wealth of creative potential

Latvia stands out in a positive light as a country with a rich cultural heritage and great future cultural potential. Regardless of its weaknesses in other areas (political, economic, and social welfare), Latvia’s achievements in culture, art, science and sports are lasting values. They are proof that Latvia has a wealth of unique traditions and creative potential.

Since Latvia regained its independence in 1991, State financial support to culture and sports has dramatically declined, but Latvia’s artists and athletes still stand out in the global arena. The excellent results of Latvian athletes in the Sydney Olympics and in world and European sports championships are all significant, particularly because Latvia is a fairly small nation with only 2.3 million inhabitants. Latvia has been especially successful in hockey, for instance. Not only due to its national championship team, but also because Latvian hockey players take their place among the world’s top professional players in the North American National Hockey League.

Latvian opera singers have also risen to stardom, performing in some of Europe’s most esteemed opera companies. The pop group Pråta vétra (Brainstorm) was extremely successful at the Eurovision song competition in 2000, and its subsequent popularity in Europe proves that Latvian artists are able to compete on the global pop music stage. The Latvian post-folklore group I¬©i is described in America’s respectable traditional music magazine Rootsworld as one of the best post-modern folk music arrangers and performers in the world.

Latvia has proven that even in economically difficult times and with virtually no financial support from the State, sports and culture can thrive and reach great results thanks to initiative and commitment.

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C H A P T E R 2

the country’s higher institutions are determined byeconomic groupings, which are more influentialthan the Saeima or the government itself. Whenasked: “Who do you believe influences the adoption of impor-tant political decisions in Latvia, and to what extent?” morethan half (59%) of surveyed local government lead-ers and nearly half (44%) of the surveyed publicsaid that in their opinion, leaders of economicgroupings influence higher-level decision-makingto a large extent. Another 31% of local governmentpoliticians and 35% of inhabitants said theybelieved this was the case “to a fair extent.”

Under circumstances of a higher-level conceptu-al vacuum, local governments are actively formulat-ing their own regional development strategies.Such strategies for the regions of Latgale and Zem-gale have been prepared locally, without any sig-nificant input from national State institutions.Extensive planning is also occurring at the districtlevel to conform to these regional strategies, as wellas to several dozen sectoral concepts at the nation-al level.

Professional experts are being consulted in theformulation of these district plans, and the publicmay also express its views in the discussion ofthese plans at their draft stage. Even though theseplans are being carefully thought out, they are notmutually linked and co-ordinated, and in theabsence of a common national development con-cept, there is concern as to whether they will besuccessful.

The distrust by local government leaders ofboth the Saeima and the country’s central executiveinstitutions, their scepticism regarding the consul-tative capacity of the public, and their limited con-sultation of professional experts in policy-makingplaces them in a peculiar, cocoon-like situation ofseclusion. The most popular method for acquiringinformation is through consultations with otherlocal government representatives. The similarity ofproblems faced and the holding of regular contactsis generating a sense of internal solidarity amonglocal government leaders.

The most widespread and one of the most seri-ous problems identified by local government lead-ers is the lack of funding, which affects both localgovernment policy-making and work capacity. Localgovernments are particularly dissatisfied with thefact that they are being delegated more and morenew duties, for which they are granted insufficientfunds from the State budget (the allocation of whichis perceived to lack transparency).

While the Law On Local Governments outlines themechanisms and sources for the formation of localgovernment budgets, this process is complicatedand does little to stimulate development. Thebasic source of local government budgets is per-sonal income tax, but only the local governments ofRiga, Liepåja and Ventspils directly collect this tax.The others receive their funding through the Statebudget and the Local Government Finance Equal-ization Fund, which has been established to ensurethat all local governments receive at least a mini-mum level of funding. Resources for this fund aretransferred from the State budget, and thereforethe link with the amount of income tax paid by theresidents in each local government’s jurisdiction isvery approximate. The amount of State funds to bedisbursed to each local government is calculatedby using two-year-old data. If additional personalincome tax is collected, then the relevant local gov-ernments do not receive this additional income.This is why several larger local governments areseeking to administer the personal income tax col-lected within their jurisdiction on their own.

In 1997, the functions of the second (district)level of local government were changed, and theirbudgets were tangibly reduced. Presently, districtlocal governments receive earmarked subsidies forthe performance of a few functions, based on thenumber of inhabitants living in each district.

The chronic lack of funding is one of the reasonswhy some local governments have adopted ques-tionable tactics to increase their budgets, as was thecase with donation-seeking by the city of Jürmala.Several other local governments have also soliciteddonations or services from entrepreneurs in returnfor the adoption of one decision or another.

Entrepreneurs have a large impact on local gov-ernment decision-making. One could say that localgovernments are like the State in microcosm. Justas powerful and large-scale economic groupingshave considerable influence at the national level,so individual local entrepreneurs or their groupingsacquire importance at the local government level.This influence is particularly felt when decisions aretaken about local government procurements. Insuch cases the policy-making process is often trans-parent only in theory.

Local governments are entitled to borrowfunds, but under restricted circumstances. Latviahas not acceded to the article in the EuropeanLocal Government Charter that provides for thefree movement of capital. Therefore, local govern-

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ments are denied the possibility of obtaining cred-it directly from banks. Instead, they must petitionthe Ministry of Finance’s Credit Council for a loanfrom the State Treasury.

One solution to this problem might be to dele-gate individual functions to NGOs. However, localgovernments generally lack confidence in NGOcapabilities. Nearly half of the local governmentleaders surveyed indicated that they were not surehow successfully NGOs could carry out functionsthat might be delegated to them in the future.

However, the division of funds in local govern-ments themselves is not always transparent andtheir use is not always effective. State Audit Officedata indicate that in 2000 only 120 of 581 Latvianlocal governments completely complied with Lat-vian law and compiled reports with a comprehen-sive list of their expenditures. The budgets of otherlocal governments are not even recorded in writing,which gives rise to splendid opportunities for themanipulation and ineffective use of resources.While the State Audit Office perceives the incorrectcompilation of financial reports to be a significantviolation, individual local government officials con-sider this to be an insignificant detail. Many claimthat they don’t have the funding to commissionsuch reports. In any case, the above clearly indi-cates an urgent need for greater transparency in theactivities of some local governments.

Under conditions of limited funding, the effec-tiveness of the use of resources becomes especiallyimportant, and there is reason to doubt whetherlocal government funding is being used effectively inall spheres. For example, the attempt to decen-tralise the provision of social assistance and toinvolve local governments in this activity does notappear to have been successful. Research by theMinistry of Welfare has shown that the lowest incomeper capita is usually in families with children. How-ever, such families usually do not receive appropri-ate support from local governments, which direct amuch larger proportion of funding to social assis-tance for pensioners. The fact that local governmentsdo not sufficiently follow up on the implementationand results of their decisions is a serious problem.

This lack of effectiveness is partially associatedwith various other characteristics of local govern-ment decision-making. In many cases local govern-ment leaders are influential figures, whose status isdetermined not only by law, but also by the force oftheir personality and whether or not they work full-time in municipal politics. Some local government

leaders choose not to observe such decision-mak-ing regulations as the obligation for draft decisionsto be prepared and submitted in a timely mannerto other local government councillors, or regula-tions concerning budget formation and control.

This Report’s survey of local government lead-ers’ value orientations is worthy of attention, con-sidering the influence that these people have intheir communities. Two-thirds of local governmentleaders believe that the economic growth of thecountry is more important than social justice andequality. (Opinions were evenly divided among thepublic: 48% shared the view that social justice is ofsecondary importance, 47% believed it to be of pri-mary importance, and 5% had no opinion).

More than 90% of surveyed local governmentleaders believe that mechanisms should be estab-lished to promote increased public participation inpolicy-making processes. However, two-thirds alsobelieve that the public is overly emotional andbadly informed, and thus cannot successfully par-ticipate in policy-making activities. Nearly 70% oflocal government leaders also gave low ratings totheir own political influence, and doubted whethertheir initiatives could influence the views of policy-makers at the national level.

The surveyed municipal politicians believed thatthe public is well-informed about decisions thathave already been adopted, but admitted that infor-mation about draft decisions is not widely available.In general they gave very low ratings to the massmedia, which they viewed as lacking competence,responsibility, honesty and independence.

Characteristics of Latvian

public policy

The facts expressed above, along with otherinformation, indicate that the public policy processin Latvia does not occur strictly in accordance withthe country’s constitutional and legal framework. Insome cases, decision-making counters the letterand/or spirit of the Latvian constitutional system(the preparation and adoption of unofficial andsecret political decisions, known as “state cap-ture”), while in other cases civil society groups donot make full use of the opportunities provided bya democratic State system, because many peoplelay excessive responsibility for the problems ofsociety on State institutions.

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The preparation and

adoption of parallel

decisions

It is characteristic for Latvian political leaders tosometimes “work out their relationships” (or con-sult with each other) not in the premises of theSaeima or the Cabinet – which by their very natureare public institutions – but in such private andclosed spaces as suites in the Hotel de Rome. Ininterviews with the country’s inhabitants, membersof the Saeima, ministry department directors andlocal government leaders, the following points ofview were expressed: important political decisionsare prepared outside of public institutions (forexample, in private firms); the political platforms ofparty and State institutions on various importantissues are determined by individuals who are notState officials and who sometimes hold no office inany political organization; open and legitimateinstitutions (such as the Saeima) formally approvedecisions that have already been made previouslyin an informal manner.

These opinions testify that parallel to the pub-lic preparation, adoption and implementation ofpolicy decisions as provided for by the Constitu-tion, a secret and illegitimate system is operatingpartly outside the framework of State institutions.It is probable that this secret and illegitimate sys-tem does not operate all of the time and in relationto all issues, as the majority of surveyed politicalagents indicated that legal and open institutionsare also very important. However, this illegitimatesystem does play a large role in the creation ofLatvian public policy, a role that cannot be pre-cisely determined due to its behind-the-scenesmanifestations. For illustrative purposes, Informa-tion 2.3 provides an extreme model of a closed andillegitimate policy-making process.

The dominance of State

institutions

On the one hand, many policy decisions areprepared and adopted outside of official Stateinstitutions, as evidenced by a transparency deficitin the activities of these institutions, and by the

fact that State officials tend to consult a very nar-row circle of potential political agents.

On the other hand, the public itself tends toaccord an excessively dominating role to Stateinstitutions. Many members of the public are eagerplace the responsibility for the resolution of variousissues upon State institutions in such large measurethat the role of civil society is sharply reduced.

In research conducted by the Delna branch ofTransparency International, 74% of respondentsfrom the public believed that the governmentshould assume the main role in combating corrup-tion. Only 12% believed that this role should betaken on by the people themselves. About 3%believed that NGOs should undertake this task,and just as many named the mass media. However,taking into account that in most corrupt transactions(for example, bribe-taking), at least one member ofa State institution is involved, it would be logical toassume that responsibility for combating corrup-tion should be undertaken jointly by the State andby civil society. Such a division of responsibility hasnot yet been strengthened sufficiently in the con-sciousness of the wider public.

The lack of transparency in

public policy

The lack of transparency in public policy not onlyhinders its effectiveness, but also violates the rightto free speech as outlined in Article 100 of the Con-stitution: “Everyone has the right to freedom ofexpression, which includes the right to freely receive,keep and distribute information and to express hisor her views. Censorship is prohibited.” The publicpolicy process in Latvia is insufficiently transparentboth at the administrative level (employees of Stateinstitutions sometime refuse to provide inhabitantseven with information that should be accessible tothem according to law), and at the political level,where decisions are occasionally taken in a closedand secluded manner. Therefore, we can differenti-ate two aspects of this issue – administrative trans-parency and political transparency.

In 1999, the Delna branch of Transparency Inter-national conducted a study on access to informa-tion at State and local government institutions.Information requested in writing was immediatelysupplied in only about 30% of the cases. The other70% of requests were answered with a letter of

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refusal. When the information was requested againfor a second time (usually citing a legal provision),approximately half of the second requests receiveda satisfactory reply, while the other half eitherremained unanswered or were again turned down.

The perception that Latvian public policy ischaracterized by a marked lack of transparency isextremely widespread among the Latvian public. In1999, nearly half (47%) of surveyed Riga residentsand over a third (34%) of surveyed rural residentsbelieved that State or local government institutionsconceal important information from the publiceither often or very often, while almost a third ofRiga residents (32%) and 41% of rural residentsbelieved that this occurs occasionally.

Notwithstanding this deficiency, there has beennoteworthy progress during the past year in thefield of administrative transparency. The Freedom ofInformation Law is being more fully realised, and anincreasing number of officials are becoming awarethat the public does have the right to request infor-mation that has not been restricted by law. Howev-er, it does not appear that political transparency inthe discussion and adoption of important politicaldecisions has increased. The average inhabitant ofLatvia does not have access to complete, reliableand accurate information regarding fundingreceived by political parties, or regarding the originof funds obtained for the purchase of property byhigh-ranking State officials. This lack of information


Extreme model of a closed and illegitimate policy-making process

1. A private person (for example, an influential entrepreneur) or firm becomes aware of an issue requiring a political solution. He or she determines the options at hand.

2. This person contacts political decision-makers (Saeima deputies, ministers, “party treasurers,” “grey cardinals,” and the like). Sometimes the essence of such contacts lies in earlier or current monetary payments, which might include the financing of political parties.

3. Following consultations, the private person’s (or firm’s) lawyer prepares the basic precepts of a draft law or even its entire text.

4. Ministry civil servants may also become involved at the drafting stage of the law, but other groups whose interests might be affected are ignored.

5. The minister linked with the relevant private person brings the issue to the Cabinet. Through closed discussions the minister gains support for the draft law from other ministers of his or her party, and from the other governing coalition parties.

6. The draft law is put forth to the Saeima, where party leaders, “key figures” (or “movers”) ensure the support of their relevant faction members. Other members of Parliament do not receive full information about the issue, but rely upon their party/faction leadership.

7. The public administration implements the adopted law. The influential private person, with the help of his or her political contacts, ensures that the law is implemented according to his or her interests.

Under such a policy process model, stages 1, 2 and 3 are completely hidden from the wider public. In stage 4, information may reach the public through “leaks” sent to the media by people opposed to the draft law. The public is usually informed no later than at stage 5, once the draft has been submitted to the Cabinet. In such a closed process the observance of human development priorities is difficult, if not impossible. While there may not be many actual cases in Latvia conforming entirely to such an extreme model, its elements have frequently been detected in practice.

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also applies to the background of relationsbetween political parties and many other importantpolitical matters.

The “other side of the coin” of a lack of trans-parency lies in the lack of knowledge displayed bythe public itself. Results obtained from public sur-veys correspond to those obtained in surveying min-istry department directors. Over half (61%) of sur-veyed inhabitants agree or partly agree that theyhave insufficient knowledge of the policy-makingprocess to participate in it. Even more (65% of inhab-itants) agree or partly agree that policy-makingshould be left to experts, because the average citi-zen is either insufficiently informed or too emotionalto effectively participate in this process. Nearly two-thirds (64%) of surveyed ministry department direc-tors also believe this to be the case. The low self-evaluation of inhabitants regarding their awarenessand capabilities is a serious barrier to any increase inpublic pressure for more political transparency.

Massive, campaign-style,

but short-term public

participation

In the beginning of the 1990s the political par-ticipation level of Latvia’s inhabitants noticeablysubsided. Recent years have been characterized byuneven, but growing political activity among indi-vidual social groups (see Chapter 3 for moredetails). In Latvia public participation is often mas-sive, campaign-style and short-term. Such were theteachers’ strike at the end of 1999, the farmers’protests during the summer of 2000 at Latvia’s bor-der crossings, and the collection of signatures toamend the Law on Power Industries and restrict the pri-vatization of Latvenergo (see Information 2.4).

Meanwhile, average political participation lev-els (with the exception of voting at Saeima and localgovernment elections) remain at a very low level inLatvia. According to the 1999 Survey of Living Con-ditions in Latvia, only 14% of those aged 18 or overhad signed a petition (political demand) or otherpolitical document during the past five years, orprovided financial support to a public or politicalorganization or movement. A mere 4% had takenpart in a political rally, demonstration, or meeting,published their views in the press, participated inthe organization of election campaigns, or partici-

pated in meetings or conferences regarding politi-cal issues (see Chapter 3 for details on the formsand intensity of public participation).

While some of those who displayed politicalactivity did succeed in having their demands at leastpartly satisfied, such participation cannot ensurepermanent and full public control of public policy.

Firstly, up until now it has been possible tomobilise broad societal groups mainly for the reso-lution of relatively straightforward issues, such aswage increases or restrictions on the privatization ofa State enterprise (farmers’ demands were slightlymore elaborate). Other issues to which easily for-mulated solutions are more difficult to apply, can-not be resolved in this manner.

Secondly, campaign-type or short-term politicalparticipation does not allow for the resolution ofpolitical issues that require long-term attention.Thus, for example, if the public wishes to ensurethat the interests of various social groups areobserved in Latvia’s negotiations with the Euro-pean Union, then a permanent form of monitoringwill have to be instigated over several years.

Thirdly, participation in politics to date hasnearly always been associated with protests againstan already initiated or implemented State policy.The broader public does not mobilise in order totake part in policy-making while “nothing bad hasyet happened.”

Overly hasty or lengthy

stages in the public policy

process

The public policy process is usually divided intoseveral stages: the submission of proposals, the for-mulation of alternatives, the adoption of decisionsand their implementation. All four stages are essen-tial. If one of them is missed, carried out too hastilyor delayed for too long, then the public policyprocess may be less effective (see Information 2.5).

Even though it is difficult to establish scientificcriteria by which to assess the desired length ofeach stage, there are examples in Latvia where dis-proportionately hasty (or lengthy) stages of the pub-lic policy process have negatively impacted thequality of decisions made. In several cases the for-mulation of alternatives has been too hasty, as inthe exclusion of essential agents from the process,

7 0


or in the selection of a single option within a narrowcircle of decision-makers. One such example is thedecision by the Ministry of Education and Scienceto merge the Medical Academy with the Universityof Latvia. Up until the time when this issue attractedwide public attention and dismay, the two universi-ties themselves had not even been invited to par-ticipate in the debates on their own future duringthe second stage (the formulation of alternatives).

Policy without analytical

substantiation

The research conducted for this Report testi-fies that there are examples in Latvia where dis-proportionately hasty (or lengthy) stages of thepolicy-making process have negatively impacted


Petition against the privatization of Latvenergo

The State-owned Latvenergo energy supply monopoly was first slated for privatization in February 1996. Since that time discussion has continued regarding the following issues: whether Latvenergo should be preserved as a single company or be divided; the degree of foreign participation in the company’s privatization; and the extent of its privatization.

In February 2000, the Cabinet decided to divide Latvenergo into several smaller companies and to privatize 49% of its thermoelectric plants. The opposition in the Saeima, led by the Latvian Social Democratic Workers’ Party (LSDSP), the New Party and the Association for Human Rights in a United Latvia, objected to these plans, and particularly against the division of Latvenergo. The Energy Trade Union and the Latvian Association of Free Trade Unions also joined in the opposition.

The trade unions prepared amendments to the Law on Power Industries and successfully collected the 10,000 signatures required to initiate another signature collection drive. Under this second campaign, the signatures of 130,000 citizens, or one-tenth of eligible voters, were gathered in support of the trade unions’ amendments. According to the Constitution, the Saeima must examine a draft law that has been submitted by at least one-tenth of Latvian voters. If the Saeima does not support the draft law or if a markedly different version of the law is adopted, then a referendum must held on the issue. The Fatherland and Freedom/LNNK faction of the ruling coalition voted together with the opposition, and the draft law submitted by the voters was adopted.

Up until the year 2000, the only influential agents in the political debates for and against the privatization of Latvenergo had been political parties, and in all likelihood the economic groupings standing behind them. While the collection of signatures was initiated by the trade unions, it was actively supported by the opposition political parties. Sceptics accused these parties of continuing their battles with the ruling coalition through the manipulation of voter sentiments.

The essence of the conflict lay in the collision of interests between various potential privatizers, but some inhabitants may have acted in accordance with populist and not particularly well-founded convictions against the privatization and reform of the energy monopoly. Public opposition to the government decision was also based on a well-founded distrust of the privatization process in general, based on several previous negative experiences.

As a result of the two signature collection drives, the privatization of Latvenergo turned from an issue that had been examined in a very closed circle to one that any Latvian citizen could influence. If one does not count the non-citizens living in Latvia, no-one was excluded.

The restrictions on the privatization of Latvenergo had both positive and negative results. On the negative side, the important decision to stop the privatization of Latvenergo was taken without seriously evaluating professional economic arguments and analyses for and against it. A non-privatised Latvenergo may have difficulty withstanding future competition in the European energy market. On the other hand, a large segment of the population was shown that the democratic mechanisms provided in the Latvian Constitution for the expression of the will of the voters – the submission of draft laws and referenda – can be an effective means in deciding important issues.

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the quality of decisions made (see the analysis inChapter 4). Another study entitled Independent Pub-lic Policy Analysis in Latvia: Assessment of the Situationand Conclusions determined that “the problem is anundeveloped decision-making culture in the coun-try. Only in very rare and specific cases is there ademand for high-quality policy analysis andresearch (such is the case within the governmentitself), not to mention demands for an independ-ent analysis. Applied research commissioned bythe government is only in rare cases directly asso-ciated with policies and their evaluation or formu-lation.”

Conclusions

Since the end of the 1980s, Latvia has beenexperiencing the transition from a situation wherethe Communist Party strictly regulated and restrict-ed individual and organizational participation inpolicy-making, to a situation where – at least for-

mally – an unlimited circle of agents can participatein the policy-making process.

The most influential political decision-makersand influencers of the policy-making process are theCabinet, the Saeima, leaders of business groupings,political leaders, “grey cardinals” and the media.

The most effective political influence channelsare closed, and for the most part associated withlarge payments of money and personal contacts.

Frequently even successful political decisionsin Latvia have been taken in a closed and non-transparent manner.

The policy agenda of political parties and the gov-ernment differs greatly from the policy agenda of thepopulation at large. This is resulting in public alien-ation and distrust of the country’s administrativeinstitutions. International organizations such as theEuropean Union have such wide institutionalisedopportunities to influence the agenda of the Latviangovernment, as has almost no other political agent.

During the course of privatization, sharp conflictshave broken out between political and economic


Hasty amendments to the Law on Pensions

In August 1999, the Latvian government announced that senior citizens were in danger of not receiving their pensions because the social insurance budget was experiencing a large and growing deficit. The Law on Pensions was radically amended later that month. The age limit for receiving pensions was increased, and the pension that a working pensioner could receive was reduced. The opposition in the Saeima believed that the main cause of the deficit was associated with problems in the collection of taxes, and that the Law on Pensions should not be amended.

The opposition initiated a referendum regarding the Law on Pensions, which took place in November 1999. Between August and November the governing coalition reconsidered the amendments it had adopted and proposed a new set of “softer” and more sensible amendments. As a result, less than 50% of citizens took part in the referendum, and the “softer” version of the Law on Pensions came into force in December 1999.

In this case a political decision affecting a very large social group – working pensioners and those approaching retirement – was formulated and adopted with haste and in a closed environment. Those directly concerned were excluded from the decision-making process, resulting in a widespread confrontation with the government. As a result, the government’s pension policy was hastily re-formulated for a second time, leading to the adoption of the “softer” amendments to the Law on Pensions.

This example of an unsuccessful policy process showed that despite the imperfections of Latvia’s civil society, the democratic system does not allow for the adoption of closed or hasty decisions if a large part of society opposes them. In the long-term, such experiences may heighten the consciousness of a civil society and promote increased public participation in the policy-making process. The creators of public policy, for their part, should recall that in a democratic society the adoption of closed, insufficiently justified and hasty decisions regarding issues that affect the vital interests of a large social group is not acceptable.

7 2


elite groups, and the wider public has had almost nochance to influence this important process. Theexception has been in the privatization of Latvenergo,which was suspended for an indefinite period fol-lowing a successful campaign to collect the signa-tures of one-tenth of the country’s voters. The par-ticipation of the public is also hindered by a lack ofeconomic competence and the lack of transparencyin the privatization process.

The Constitution provides for a democratic deci-sion-making procedure with very wide possibilitiesfor influencing draft decisions. The Saeima is formal-ly the most influential policy-making centre.

The public does have institutional means toengage in the policy-making process, but thesemeans are used very little because the publicplaces little trust in politicians and does not believein its own strength. This is compounded by a gener-al lack of specific knowledge, skills and information.

The policy-making process in the Saeima isclosed, centralised and elitist, in which party lead-ers, “grey cardinals” and business groupings playan important role.

Even though the Saeima is seen as a very goodforum for discussions, little substantive discussionactually takes place. Opposition proposals are fre-quently rejected outright, which compels it toresort to such extra-parliamentary means of influ-ence as petition drives.

Sometimes the decisions of the Saeima lack con-ceptuality and internal consistency. Therefore, thewish by some parliamentarians to overcome theirincompetence and narrow-mindedness is under-standable.

While most draft decisions are formulated inministries, the analytical capacity of the Saeima islimited. To compensate for this deficiency, unoffi-cial consultations are conducted with experts.

The average lifespan of post-independence Lat-vian governments has been very short and thisthreatens the continuity and conceptuality of poli-cy-making.

The priorities advanced by the political leader-ship of ministries often differ from real needs, caus-ing civil servants to lose confidence in the leader-ship of their ministries. Higher civil servants wishingto reduce this gap have themselves become politi-cised, and this in turn threatens the normal func-tioning of the bureaucratic apparatus.

Draft ministry decisions are often prepared with-out involving outside resources, and only occasion-ally in consultation with interested groups or NGOs.

It is difficult for the public to influence govern-ment policy-making activities due to the lack of therelevant institutional mechanisms. Various consul-tative councils and social partners have only limit-ed influence.

Departments in several ministries (Welfare,Agriculture, Transport, Environmental Protectionand Regional Development) co-operate in thepreparation of draft laws with sector associationsand NGOs, but this practice is not regular.

The political co-ordination of draft decisionswithin the governing coalition is insufficient, andthis often threatens the stability of the government.

The government is acquiring increasing influ-ence at the expense of the Saeima. This is becausethe preparation of draft laws is occurring mainly inexecutive institutions, and is determined by theneed to resolve increasingly complex issues requir-ing specific knowledge.

The autonomy of local governments in Latvia isstrictly limited. In relations with State institutions,they must rely on the European Local GovernmentCharter because their status is not defined in theLatvian Constitution.

Local governments do not feel the support of thegovernment and the Saeima, and do not see wideopportunities for co-operation with the public in orderto achieve more advantageous decisions by higher-level institutions. This has promoted the “encapsula-tion” of local governments and the development ofcloser ties between local government leaders.

The work of local governments is restricted byincomplete administrative territorial and regionalreform.

Local governments have insufficient funds forthe performance of the functions entrusted to them.This has led some local governments to seek theacquisition of resources by questionable means atthe fringe of legality. However, there are grounds tobelieve that the effective use of funding by localgovernments may increase.

Local government leaders are sometimes veryinfluential within their communities. This may neg-atively impact both decision-making and the for-mation of local government budgets. Local entre-preneurs can substantially influence localgovernment decisions, which together with theinfluence of local government leaders reduces thetransparency of decision-making and creates fertileground for corruption.

Alongside a public policy system is provided forby the Constitution in the preparation, adoption

and implementation of decisions, a parallel, closedand illegitimate system exists partially outside ofthe existing State institution structure.

The public itself tends to accord an excessivelydominating role to State institutions. Many mem-bers of the public are eager place the responsibilityfor the resolution of various issues upon State insti-tutions in such large measure that the role of civilsociety is sharply reduced. As a result, a transparen-cy deficit remains in the work of State institutions.

There have been practically no signs in recentyears of an increase in the transparency (or politicalopenness) of the discussion and adoption of themore important draft political decisions.

In Latvia public participation is often massive,campaign-style and short-term.

Meanwhile, the average level of political partic-ipation (with the exception of voting at Saeima andlocal government elections) remains very low.

There are examples in Latvia where dispropor-tionately hasty (or lengthy) stages of the public pol-icy process have negatively impacted the quality ofthe decisions made.

Political decisions in Latvia are sometimestaken without a sufficient analysis of the situationand an evaluation of the possible consequences.

Recommendations

In order for the preparation and adoption of pol-icy decisions to change significantly for the better,the dependence of the parties elected to theSaeima on narrow interests must be reduced. Thisdependency is connected with costly pre-electionadvertising campaigns. Political advertising strate-gies must therefore be changed.

In order to lessen public cynicism and reduce theestrangement between the public and the politicalelite, real consultations with voters must take place.Politicians must make greater efforts to observe pre-election promises, and show a positive example inthe performance of their leadership functions.

The discussion of opposition proposals in theSaeima would contribute to a climate of mutual trust.

The analytical capacity of the Parliament shouldbe strengthened by according additional funding toeach faction, or by establishing a separate analyti-cal service that would increase the decision-makingcapacity of the Saeima.

Public mass participation in political partiescould be an effective means for strengthening polit-

ical transparency and quality. Party leaders wouldbe subject to dual control – both from their votersand from rank-and-file party members.

The policy-making process could be improvedby a more demanding public and by its increasedparticipation in this process. It would thus be easi-er to ensure that greater policy attention is paid tohuman development goals.

The quality of government decisions could beimproved by unburdening the Cabinet, and by del-egating the decision of less important technicalissues to ministries. This would significantlystrengthen the Cabinet’s strategic leadership role.

The approval of a long-term and mutually co-ordinated national development strategy wouldfacilitate the work of civil servants and promotegreater political manageability.

The more intensive involvement of independ-ent experts in the preparation of draft decisionswould provide an opportunity to increase theamount of alternative solutions and facilitate theinvolvement of the public in the policy-makingprocess.

Renouncing the politicization of the country’shigher-level civil servants would help to promotethe employment of a more professional and highlyeducated staff.

The implementation of the government declara-tion and other conceptual documents would befacilitated by the promotion of horizontal inter-min-istry co-ordination.

Increased public involvement in the decision-making process would be facilitated if the prepara-tion of draft decisions became more transparentalready at the ministry level. A publicly accessibledraft document register should be established forthe public to examine even before such documentsare presented at state secretary meetings.

Political instability would be reduced and gov-ernment lifespans would be increased if coalitionpartners devoted more effort to discussing contro-versial Saeima and Cabinet agenda issues amongstthemselves.

All state and local government institutionsshould strictly abide by regulatory enactments thatguarantee public access to information.

In order to reduce the importance of concealedand illegitimate political influence channels, anti-corruption institutions should be strengthened andlegislative loopholes should be closed.

In order to generate a longer-term perspectiveat the local government level, the country’s admin-

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7 5

Introduction

The extent of public participation in politics andpolicy-making has already been evaluated inthe1996 and 1998 Human Development Reports onLatvia. These Reports analyse the various forms ofparticipation and the obstacles that delay it. In thisnew Report, which focuses on public policy, partic-ipation is examined as a component of policy-mak-ing. In contrast to previous Reports, participationwill be evaluated here from the perspective of thepublic, the individual and everyday practice.

In the previous Chapters we have described thephenomenon known as closed policy-making. Oneof its pre-conditions is the passivity of the public.Closed policy-making flourishes in conditions whena country’s inhabitants display little interest in pub-lic policy, are not familiar with its mechanisms anddo not believe that they can influence policy-mak-ing. The myth that politics is a closed process pro-motes a practice of non-participation, which itselfpromotes the establishment of closed policy-mak-ing processes. In order for the public to break thiscycle, it must actively demand the practice of openpolicy-making that is geared to serve the broadestpossible range of interests. It must also declare itsown priorities and seek ways to realize them.

The main task of this Chapter is to analyse suc-cessful, open and responsible policy-making exam-ples, as well as the participation strategies, mecha-nisms and resources used to realize them. In 2000the authors of this Report conducted researchregarding public policy and participation. Theirfindings show that only 5-7% of Latvia’s inhabitantsare actively involved in policy-making. Activeinvolvement in this Chapter is referred to by theterm “participation.” In analysing participation, thisChapter initially focuses on two issues – the partic-ipation arena (or space) that is institutionalized bylaw, and the type of participation taking place inthis arena.

The mass media have a significant role to play inthe formulation of open public policy. They mustmonitor the transparency of the policy-making

process, and report on both the good deeds andthe misdeeds of those in public office. As an inte-gral part of civil society, the mass media shouldalso enlarge the public arena, and create not only apublic forum for discussion, but also initiate thesediscussions and advance the interests of society.However, in order for the media to honourably ful-fil this role, its journalists, editors and publishersmust be conscious of this calling and be worthy ofthe public’s trust.

The public arena as

the central domain

of participation

During the Soviet period, State institutionsdominated the formation of the political and publicarenas. With the restoration of independence, thepublic regained the opportunity to become a newpolitical agent. On the one hand, individuals andgroups have made use of this opportunity and haveacquired new knowledge and skills in order tobecome involved in the public policy process. Onthe other hand, the public has entered a politicalarena in which a specific division of authority andpolitical traditions had become entrenched over aperiod lasting several decades. The totalitarian,centralized Soviet State had generated perceptionsregarding authority in the public arena that endureto this day, and that have been manifest in theoverly assertive activities of more than one Staterepresentative.

The task of the new participants in the publicarena – interest groups, professional associations,NGOs, socio-economic strata and other emergingparticipants from civil society – has been not onlyto declare their presence in the public policyprocess and to establish new traditions of co-oper-ation, but also to break from previous traditionsand to forge better ones. Business interests haveemerged as the most powerful participants in thepublic arena. As has been noted in the previous

C H A P T E R 3

The Advent of Participationin Public Policy

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two Chapters, these interests are dominated by anarrow circle of people, and may at times differdiametrically from those of the public at large. Theinterests of business leaders are so closely associ-ated with public policy at the national level thatthis Report considers the participation of influentialbusiness leaders to be a crucial component of Statepolicy.

The participation of the public is possiblethrough the interplay of three factors. Firstly, partic-ipation requires an appropriate legal and institu-tional environment, which encompasses both theopportunities for participation guaranteed by lawand the existing participation practice. Secondly, inorder for people to make use of these opportuni-ties, they must possess the relevant desire, abili-ties and knowledge. Thirdly, the participation ofthe public must be supported by the State andreceive the appropriate financing.

Legal framework of

the public arena

A solid legal framework has been establishedfor Latvian citizens to participate in the public pol-icy process. In addition to the first two Articles ofthe Constitution, which institutionalize the demo-cratic foundations of the country and the sover-eignty of the people, a new Chapter on Fundamen-tal Human Rights (Chapter 8) came into force in1998. This Chapter gave increased legal rights forboth citizens and non-citizens to participate inpolitical activities.

The Law On Local Governments stipulates thatlocal government council meetings are open tothose living or working within a given territory, andthat the minutes of council meetings and the textsof adopted decisions are to be made publiclyavailable.

The adoption of the Freedom of Information Law in1998 has made it easier for the public to obtaininformation on adopted decisions and signedagreements. Even though the Freedom of InformationLaw encapsulates norms already included in otherregulatory enactments, it has given the public a uni-fied overview of its rights to seek and obtain infor-mation.

The law ensures an arena for the realization ofstable co-operative practices between State struc-tures and the public, and allows for the expression

of public interests. These forms of co-operation aredefined in the 1998 Cabinet regulations On the Del-egation of State Administrative Functions to Authorized Insti-tutions. Under these regulations, the executive bodyof a State institution is entitled to entrust Stateadministrative functions to NGOs or individuals.

Access to information in the country is graduallyimproving. Draft regulatory enactments andamendment proposals are accessible on the gov-ernment’s and the Saeima’s Internet home pages(www.mk.gov.lv, www.saeima.lv). The availability of elec-tronic versions of such draft documents to anymember of the public provides opportunities to fol-low and influence their adoption procedures. WhileInternet resources are available to a comparativelysmall part of the population, they have the poten-tial to strengthen links between the public andState institutions and to promote the transparencyof the public policy process.

Politically active participants stated in theReport’s survey that they are satisfied with the par-ticipation opportunities offered in Latvia’s regula-tory enactments, but acknowledged that difficultiesarise in applying these rights in practice. Latvia’sregulatory enactments set the scene for the func-tioning of a civil society, but personal experienceand perceptions sometimes bear out that the pub-lic policy process is closed and that many inhabi-tants are excluded from it.

Important policy issues and those associatedwith the acquisition of considerable materialresources are frequently decided outside of thepublic arena. This has created a gap between thosewho wield power and the public’s understanding offairness (see the analyses in Chapters 1 and 2).Representatives of the country’s administrativeinstitutions are perceived pay little attention to theinterests of the public, as revealed by a fragmentfrom an interview with a representative of a non-governmental organization (NGO):

“What complicates things is that you personally do not suf-fer. It is the city, or in a sense, the common good that suffers.You cannot submit a claim [in court] if you have not beeninjured. [There needs to be] a means for the public to litigatewith the Riga City Council. When we investigate State andlocal government matters, [we are told], what’s it to you? Youdo not live there and you are not the direct recipients of theservice. When we inquire how [State structures] are working, –[we are told to] leave it alone.” (NGO representative)

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C H A P T E R 3

However, politically active inhabitants arebreaking more frequently into the public arena,which is dominated by State institutions. They areinterpreting the public interest in a languageunderstandable to the members of the publicarena. In the case that follows – the construction ofa parking garage on Basteja bulvåris in Riga – thepublic interest and benefit does not seem to haveappeared as a criterion for the evaluation of theproject. Representatives of the public presentedlegal arguments on the public’s right to defend thecity’s natural environment and its so-called GreenZone. Riga City Council representatives and theentrepreneur involved dismissed the alleged non-conformity of their interests with those expressedby representatives of the public as a “politicalassignment” (or “commission”), thus not calling thepublic’s right to represent its interests into ques-tion, but rather the true motivations of the garage’sopponents. The representation of the public inter-est in this case was limited to one public discus-sion, as formally required by law. Very few peopleparticipated in this discussion, which ultimately didnot serve as a mechanism to hear out and reconcilediffering interests.

The methods of influence available to the pub-lic are frequently not effective enough for people torealize their interests in a meaningful manner. TheFreedom of Information Law does not resolve situationsthat arise when a State institution fails to issuerequested information. It is possible to initiatecourt proceedings against withholders of informa-tion, and in cases where the activities of a Stateinstitution affect the public interest. The power ofthe courts in democratic countries is an importantinstrument for realizing the public interest anddeciding on issues of importance to the public.However, NGOs in Latvia assess the defence of thepublic interest in courts as an expensive, time-con-suming and often ineffective procedure. Rarelycould any of the surveyed NGO representativesname a case where the wider interests of societygained the upper hand following a court case.Research indicates that the public has little trust inthe country’s judicial system. In a survey conductedby the Delna branch of Transparency Internationalin 2000 regarding corruption, nearly half (48%) ofrespondents considered court representatives tobe either “very dishonest” or “fairly dishonest.”Nearly a third (32%) of respondents who had beeninvolved in court cases indicated that they had topay additional (unofficial) fees or make use of unof-

ficial channels (personal contacts, services in returnfor services) to further their interests.

However, there have also been positive experi-ences in court cases. The Ogre Tenant’s Society hassuccessfully used the courts as a means to defendlow-income families. Court judgments have forcedlocal governments to review and co-ordinate publicutility tariffs, and many low-income families havebeen saved the fate of being evicted from theirplaces of residence.

The enshrinement of people’s rights in the lawsof the land is not sufficient for the public interest tobe realized. State institutions must feel the need tohear the views of the public and to obtain its sup-port. They must also educate the public and createnew opportunities for co-operation. One way ofensuring that the public uses its rights more fully isby actively encouraging its participation. A practiceof such mutual co-operation exists with many small-er Latvian local governments. We will look at suchtargeted strategies later in relation to the VentspilsProgramme for the Integration of Society. Anotherway to increase the public’s decision-making capac-ity is through public pressure itself, which forcesthose in power to take note of the public’s interests.

Public participation

resources

The public arena (or public space) is formed byrepresentatives of society and their associations inall of their various forms. Such activities as singingin a choir, acting in a theatre or partaking in a knit-ting group, while superficially not associated withpolitics, also have an important role in the forma-tion of the public arena, public networks and skillsdevelopment. These skills and networks can bemobilized by the participants of the activitiesreferred to in order to defend their interests if nec-essary. Within such groups, manifestations of small-scale democracy (or “home democracy”) areexpressed. Together with everyday concerns, thepolicy process can be discussed, and people’sinterests can be defined and formulated.

The high level of public activity at the end of the1980s and in January 1991 was a significant factorthat led to the reestablishment of Latvia’s inde-pendence. Once Latvia recovered its sovereignty,this activity collapsed and did not grow into a broadmovement of political or non-governmental organi-

7 8


zations. It would be difficult to maintain such sus-tained wide-scale public activities as during Latvia’sstruggle for independence in any country. The basisfor the activity of that period was a pervasive feelingof enthusiasm and hope that could not be sustainedfor long. For the greater part of the population,Latvia’s independence struggle turned out to be aonce-only and spontaneous process of participa-tion. Only a small minority continued the activitiesthat they undertook, either as representatives of thestructures of a reborn country or as participants innon-governmental and sectoral organizations.

One can mention a number of causes for the fallin public participation. Firstly, public passivity hasdeep roots in Latvia. Since the Soviet period, pas-sive resistance was a conscious form of protestagainst the policies of the day. This is indirectlyshown in the effectiveness of spontaneous protestsin Latvia, which are provoked not only by the unwill-ingness of the country’s administrative institutions tolisten to public demands, but also by the inability ofthe public to seek other channels of participation.

Secondly, public activity depends upon peo-ple’s ability to take responsibility both for theiraction and inaction. In the participation researchconducted for this Report, the public mentions irre-sponsibility as a characteristic feature of all Statestructures. In the secret adoption of decisions, theresponsibility for them also becomes secret andopaque. The lack of responsible policy-makingimpedes the development of the country, and doesnot permit the formulation of a sequential and goal-oriented public policy. Irresponsible policy-makingis an example and an excuse for a cynical publicattitude against State institutions. It gives rise tojustifications for not paying taxes and corruption,thus denigrating the idea of the public good.

Thirdly, many people do not participate in polit-ical activity because they do not believe that theycan influence the policy process. Irresponsible andclosed policy-making makes for a passive societywith low self-esteem. On the other hand, it is also theend product of a passive society. The public consis-tently places all the active forms of public influencein last place among a range of options available,even though representatives of State and local gov-ernment institutions evaluate some of these forms(such as political activity by sectoral organizationsand NGOs) a little more highly. Both the public andrepresentatives of State and local government insti-tutions consider NGOs and initiative groups to havethe least influence in policy-making.

Fourthly, the majority of the public is livingunder varying conditions of economic hardship. Anumber of studies have determined that most peo-ple are preoccupied with ensuring a means of sub-sistence for themselves and their families. In com-bating their everyday problems, they feel that theydo not have the time and the energy to becomeinvolved in the resolution of issues affecting thewhole of society.

The study for this Report on public policy andparticipation reveals that publicly active respon-dents are slightly better educated and substantial-ly better informed about policy-making processesthan their more passive counterparts. They alsoevaluate their material circumstances and capacityto act more positively.

Publicly active persons live in the same environ-ment and see the country’s political processes in thesame light as passive persons. They also consider,for the most part, that decisions taken in Latvia donot serve the interests of the majority of the coun-try’s inhabitants. Even though their outlook is sub-stantially more optimistic, they also see the domi-nant political model as one of closed policy-making,in which the public does not play a significant role.On average, an overwhelming majority (about 83%)of inhabitants do not believe that any initiative oftheirs can influence the views of the country’s policy-makers. In contrast, slightly less than half (48%)

of publicly active respondents (those whowould actually try to contact the relevant policy-makers following the adoption of an unsatisfactorydecision) felt this way.

While the political environment does influencethe level of public participation, it does not deter-mine whether the public will opt for participation.In a more detailed analysis of the causes that giverise to participation, we can see three factors:• Motivation for participation (drives);• Support of institutions and like-minded persons;• Knowledge and ability to participate.

Motivation for participation

Research cites a sense of duty and caring for fel-low human beings as the most important drives forinvolvement in public activity. Similar motivationsare cited among NGO leaders and volunteers seek-ing to influence and take part in policy-making (seeInformation 3.1).

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C H A P T E R 3

Support of institutions and

like-minded persons

An important sustainer of motivation for partici-pation is membership in an official or unofficialgroup in which ideas are listened to, discussed andrealized. While not all participants of organizationsor interest groups are equally active, joint activityprovides inspiration and support for other activity.The opportunity to become socially active and tospend one’s free time in an interesting manner isitself a drive for public activity. A membershipgroup collectivizes individual views and transformsthem into public or interest group views, creatingan opportunity to involve individuals in the publicpolicy process.

Local governments have an important mainte-nance and support function for public activities.Thus, for example, in the parish of Èslîce publicactivities are organized by the chairperson of theparish council herself, who also gathers the youth ofthe parish to concerts, lectures and discussions.Similarly, public activity in the district of Prei¬i isexpressed through the local government in co-operation with local cultural and educational insti-tutions.

Both Latvians and non-Latvians are equallyactive in NGOs, which are most frequently open bytheir nature, and in which nearly anyone can partic-

ipate. Information regarding NGOs and their activi-ties is freely available on the home page of theNon-governmental Organization Centrewww.ngo.org.lv. Even though none of the organiza-tions surveyed by the authors of this Reportacknowledged that their circle of participants wasrestricted, in practice each organization includes aparticular circle of like-minded persons. A certainselection criterion lies in the commonality of inter-ests and inclinations of an organization’s members.Education, ethnicity, age, sex or profession mayalso play a role.

Knowledge and ability to

participate

Data acquired in researching public policy andparticipation reveals that respondents’ level ofknowledge of the policy-making process is closelycorrelated with their level of participation in policy-making. Only about 8% of respondents believe thatthey fully understand the policy-making processesin Latvia. Another 22% “tend to disagree” with thenotion that they might have limited knowledgeabout the decision-making process. NGOs, in whichthe buds of civil society are being formed, are a sig-nificant school of democracy.

Members of public interest organizationsacknowledge that work skills can be acquired main-


Stories of motivation for participation

“I became involved [in the public movement] in 1996, when an intensive racket involving the forced evacuation of motor vehicles was occurring. The window at my workplace looked out onto a lot where illegally parked cars had been impounded. I myself was not a victim. Unfortunately, here most people become involved only after they themselves have become victims, not when the victims are others. I understood that in this city an open, sordid form of villainy was occurring, and that it was being carried out by an institution allegedly created for ensuring the public order. I understood that the process could be influenced. From a passive person I became an activist. In each party the majority of people are passive. Not everybody works actively. So I moved to the active minority. One needs to overcome oneself. Many people believe that they cannot influence anything. They lack the experience. I am the same type of person as they are, but once one understands that one can influence things …” (NGO representative)

“In this country there is a large bureaucracy and a lack of funds. One needs to be bold and to be driven by a sense of indignation if one wants to reach one’s goals. Material security is not as significant as experience and contacts. If necessary, the evening and night hours [can be devoted to public activities]. I know that the project will be ready without my help. But what if some mistakes occur? Will I later think that things could have been different? I have often asked myself why have I taken this on.” (NGO representative)

8 0


ly through experience. The representatives ofLatvia’s older NGOs acquired their initial skills insuch a manner. A network for the further transfer ofknowledge and skills has developed with the activeparticipation of numerous NGOs. Training is organ-ized and co-ordinated by the Non-governmentalOrganization Centre, the Latvian Adult EducationUnion ([email protected]) and other organizations.

The establishment of Latvian NGOs has been,and continues to be supported by foreign NGOsand foundations. Many of the NGOs that wereestablished in the first half of the 1990s drew theirinspiration from the activities of émigré Latvians,who are mentioned to have contributed with a pos-itive attitude towards life, an ingrained understand-ing of democracy and its forms, and skills in the for-mulation and presentation of views.

NGOs with long-term work experience indicatethat the quality of their activities has improvedtremendously. Initially their activities were mainlyassociated with the provision of information andeducation. Their main focus has now turned to influ-encing policies and defending various interests.This new direction requires a continuing upgrade ofskills in such areas as:• The ability to express one’s views and to co-ordinate them with those of like-minded persons;• The establishment of contacts with like-mindedpersons and participation in collective activities;• The initiation and management of collectiveactivities;• Co-operation with the mass media and withState authorities;• The preparation of information and the attrac-tion of support for one’s cause;• The ability to engage in self-evaluation.• The foundations of public activity are formed byboth knowledge and skills, and by the ability to usethis knowledge.

At present public interest groups still lack theability to mobilize people into collective action.One issue that always arises when the interests ofState authorities clash with the public interest asexpressed by NGOs, concerns the rights of eachparty to represent the public interest. The legitima-cy of State authority is also based on this precept.

Organizations representing specific public orprofessional group interests are in the strongestposition compared to other interest groups. Theirrepresentative legitimacy is a potent instrument forensuring that their views will be taken into accountin the policy-making process.

Organizations established for the resolution ofconcrete issues or the popularization of an idea orviewpoint are in a less advantageous position. Forexample, one group of professionals that does notrepresent any particular segment of society workswithin the Delna branch of Transparency Interna-tional. Delna has declared itself as a defender of thepublic interest and is often mentioned in thisReport. It acts as an intermediary by hearing com-plaints from the public and conducting subsequentresearch. One of its ongoing tasks is to activate soci-ety and to gain public support for its work – in otherwords, to continually increase its degree of publiclegitimacy.

Financial resources

for participation

Freedom of association is guaranteed to Latvia’sinhabitants by the country’s Constitution. Never-theless, the stable and long-term association ofpeople requires financial resources. There is awidespread perception among the Latvian publicof NGOs as volunteer organizations that do notrequire considerable funding. This is not so in real-ity. While the activities of many organizations areindeed conducted by volunteers, funding is neces-sary for the implementation of projects. Environ-mental activists, for example, voluntarily take partin protest activities, but require resources for thepreparation of their informative materials.

In order for NGOs to conduct truly independentoperations, they require stable funding to coveradministrative expenses and the rental of officespace. The lack of funding for such needs is men-tioned in more than one interview, as in the follow-ing quote from an NGO representative:

“The lack of resources is one of the most serious obstaclesto the formal organization [of interest groups]. (…) One canfind people with energy and motivation, but they need to beavailable when the State is available – during working hours.(…) Consultations with a lawyer cannot be conducted onSundays. An organization must have resources in order tobecome actively involved.” (NGO representative)

The activities of most Latvian NGOs subsidesoon after their foundation because they areunable to attract volunteers and ensure the neces-sary funding. According to data from Latvia’s Non-

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C H A P T E R 3

governmental Organization Centre, of the morethan 4500 NGOs registered in Latvia by 1999, only asmall proportion (about 15%) receive fundingexceeding 5000 lats (8000 USD) per year. About 23to 33 per cent of NGOs receive 500 lats or less peryear.

Financial regulations regarding association inofficial organizations are not particularly favourableto the activities of public interest groups. Firstly,public activity is not distinguished from variousother activities. The same financial requirementsare applied to both profit and non-profit organiza-tions. The Law on Non-profit Organizations provides forthe granting of non-profit status to both profitundertakings (companies), and non-profit (public)organizations. Similarly, the Law on Public Organiza-tions permits public (non-profit) organizations toengage in profit-seeking activities.

Secondly, the use of financial means for publicpursuits is impeded by the imposition of taxes onthe financial activities of public interest organiza-tions, including on donations received. Latvia lacksa comprehensive law on the operation of founda-tions or funds, which are compelled to register as

non-profit organizations. For example, the parentsof schoolchildren who establish a school supportfoundation as a public organization will be forced topay taxes twice, since this organization will operatewith donated funds from which taxes will havealready once been paid.

Activity can be qualified in one of two ways:either as entrepreneurial (or profit-seeking activity,which is defined in the Commercial Law as commer-cial activity), or as economic activity that is eithernon-profit or takes place only once. Neither currentregulatory enactments nor the already adoptedCommercial Law provide any tax or other relief.

The third obstacle hindering NGO operationslies in fund-raising difficulties. While the traditionof donating to public activity is developing slowlyin Latvia, there is currently no law that regulatesgovernment tax policies regarding the financing ofNGOs. Existing regulatory enactments do not pro-vide equal rebate criteria for all organizations. In1998 the Law On the Income Tax of Enterprises wasamended, according to which public, cultural, edu-cational, scientific, religious, sports, charitable,health and environmental protection organizations


Irîna Kulitåne, Director of the White House (Baltå måja) Foundation in Lîvåni

Our wealth lies in our people

My country and my people have often had to start over from scratch. The people of our time have felt this directly and painfully, and therefore I can only admire their faith in goodness, their ceaseless desire to work and their ability to look towards the future with hope.

I am proud of my compatriots; of those whose accomplishments have surpassed day-to-day expectations and who shine like stars because of it, as well as of those who I have passed by without seeing the true meaning of their existence. Through our work at Baltå måja we become involved with people’s destinies, both directly and indirectly. One can draw great strength and motivation from these destinies. It comes for free and does not cost one santim.

Our wealth is in our people. Their good deeds and their good will are the key to building our tomorrow. I have many builders of our tomorrow around me: invalids, pensioners, the unemployed, businessmen, single people and families. These are more or less successful people who help each other morally and materially. They support education, culture, social welfare and sports; they create and cultivate business. All of them search for and find pleasure in the small things of life: working together on cultural events, educating themselves, doing honest work, and taking part in community projects whose significance and influence will only be appreciated after many years.

As long as there are those who need help, people will be capable of doing good deeds. Not by dividing up state funds and giving away what is left over, but by listening carefully, looking deeply, empathizing and looking for common solutions. Over the past four years, Baltå måja has come across thousands of people like that all over Latvia. Is that not reason enough to be proud?

8 2


and foundations could receive a tax rebate amount-ing to 90% of donated funds. However, this rebatedoes not apply to all organizations with a specifictype of activity or goal, but only to those that havemade it onto a list that is approved by the Ministryof Finance. Income tax is also imposed on financialdonations. Four organizations have managed toobtain this special status: the Soros Foundation –Latvia, the Latvian Culture Foundation, the LatvianChildren’s Foundation and the Latvian EducationalFoundation. Only the first of these is not a Statefoundation.

According to Non-governmental OrganizationCentre data, 80% of the funding received by LatvianNGOs is obtained from abroad. However, eveninternational support has been irregular andrestricted, as international donors do not alwayshave a concentrated and organized approach to thesupport of organizations or activity sectors. Thefinancial basis of Latvian NGOs is usually not var-ied, as most organizations rely upon only one ortwo main sources for their funding. Latvia has fewfinancially stable NGOs and most must rely on sup-port for a succession of specific projects.

Research regarding corporate donations inLatvia shows that donations by private entrepre-neurs form nearly a quarter (24%) of NGO budgets.These donations are often in the form of goods,premises or transport. They are mainly motivatedby support for the aims of a particular organization(usually in regard to social services), and may stemfrom the philosophical and value system of thecompany itself, which may be inclined to the provi-sion of a specific type of assistance.

Donors usually support individual events andactivities. Therefore, organizations with long-termgoals focusing on the defence of broad public inter-ests (such as “watch-dog” organizations) find itharder to attract local resources. These organiza-tions require long-term financial support, as thegoals of these organizations are not achievable inthe short term.

Currently Latvian public interest organizationsoperate mainly with the assistance of foreign fund-ing. During the next few years, foreign-based fund-ing for the consolidation of a civil society in Latviawill be reduced by such international donors as theSoros Foundation – Latvia and the United NationsDevelopment Programme. This funding will bereplaced in part, but not fully, by funds from theEuropean Union and the Baltic-American Partner-ship Foundation. Thus any tax breaks offered to

local donors by Latvian legislation will become sig-nificant, along with funding from the State budgetfor the activities of NGOs. An important source ofNGO funding may also come from local govern-ments, which, according to data from the Baltic-American Partnership Programme, currently allo-cate an average of not more than 0.5 to 1.5% of theirbudgets for the support of NGOs.

The media in the public

arena

The media have a dual role in policy-making.The easiest and most visible assignment is to act asa watchdog, uncovering corruption, incompetenceand negligence in the State administration. A sec-ond, more complicated task is to present societywith a broad and multifaceted overview of events,giving citizens the opportunity to participate fully inthe process of democratic governance. This secondtask, which is inevitably connected with the need,the duty and the responsibility to participate in set-ting the political agenda, requires both higher jour-nalistic standards and greater trust in the media onthe part of society and its institutions.

The past years have shown that the Latvianmedia perform their watchdog role with gusto.Hardly a day passes without some story appearingin a newspaper or on TV about suspicious dealingsin the State administration. As in any democraticsociety, some of the stories dug up by the pressresult in the resignation of the implicated politicianor civil servant, some influence the outcome ofelections, but others have no tangible results. Inthe last few years there have been a number ofoccasions when information discovered by thepress or TV has led to the resignation of State ormunicipal officials. Nevertheless, those cases whenmedia coverage does not have any results some-times leave a deeper impression and can lead to afeeling of powerlessness. Such cases simply under-line the fact that the media are only one part of afunctioning society. The media will not have thenecessary impact in the absence of influential non-governmental organizations and the effective work-ing of the judicial and executive branches of gov-ernment.

Even if the media were completely effective aswatchdogs, they would still have a limited role inthe formation of public policy. They could point to

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C H A P T E R 3

mistakes and deficiencies in the policies pursuedby the government and State administration, butthey could not assume a fully active role in devel-oping and implementing new policies.

The media represent civil society, not the powerof the State, and their mission is to serve society.On the one hand this is a passive role, with themedia acting as a conduit, generating opportunitiesfor diverse opinions to be expressed and tobecome known. On the other hand, this is also anactive role. The media must act as the eyes andears of society, constantly trying to discover andunderstand the truth about issues that are impor-tant to society. They must scrutinize both what ishappening in society itself and the actions of gov-ernment and State institutions. As has already beennoted in Chapter 2 of this Report, the media have agreat deal of influence in setting the policy agenda.

This means more than simply being a watchdog.If that is their only goal, then the media risk acquir-ing the reputation of “being interested only inscandals.” The media must also generate debate ontopics of general political, economic and socialimportance. The press is especially suited fordeveloping such discussions, because, in contrastto the electronic media, the printed media aremore suited for the exposition of complicated argu-ments and the development of the kind of extend-ed, multifaceted debates that lie at the core of par-ticipatory democracy.

There have been a number of occasions duringthe last ten years when the press has activelyworked to influence the policy agenda and to pro-mote public debate. For instance, in 1992, when theLatvian Parliament (still known at the time as theSupreme Council) was drafting a new election law,the press sparked a public discussion on the pro-posal to limit the number of parties that could beelected to the soon-to-be-renewed Saeima by set-ting a minimum percentage of the vote that a partywould have to obtain in order to gain representa-tion in Parliament.

Remembering the problems that Latviandemocracy faced in the interwar period, when alarge number of parties with only one or twodeputies threatened the Saeima with paralysis, thepress argued that society should consider whetherto set a threshold which would not allow partiesreceiving less than four or five percent of the voteto get into Parliament. Although a number of small-er parties objected, the Supreme Council decidedas a result of these debates to set a threshold of

four percent. Although this may not have been apanacea for Latvian democracy, it has significantlycontributed to the structure of the party system,giving voters a relatively clear political choice whenthey vote in elections to the Saeima.

There have been other cases when the presshas addressed important issues. For instance, thebusiness newspapers Dienas Bizness and Biznes &Baltiya have initiated a wide-ranging debate on therecently adopted Commercial Law. It is too early tosay what the results of these discussions will be,but they demonstrate a commendable desire to getinvolved in the formation of public policy.

Nevertheless, in spite of these examples, Lat-vian journalists in general do not sufficientlyappreciate the fact that their vocation includesactive support for public participation in the for-mation of public policy. The situation is, in asense, paradoxical. On the one hand, both societyand journalists themselves have an exaggeratedsense of the media’s ability to solve a variety ofspecific, everyday problems. On the other hand,neither journalists nor society sufficiently appreci-ate the ethical and social responsibility incum-bent on the media.

Soviet conceptions about the role of the mediain society are still very much alive. The phrase “thefourth power” has gained widespread currency allover Eastern Europe when speaking of the media.Unfortunately, it creates a skewed perception ofthe media’s place in society and of their ability toaffect the course of events. “The fourth power”(“ceturtå vara”) is clearly an imprecise translation ofa two-hundred-year-old English phrase, “theFourth Estate,” which was coined by the famousEnglish politician Edmund Burke. The French Rev-olution, which began with the summoning of theEstates-General, helped to popularize the ideathat Parliament represents three estates: thenobility, the clergy and the “Third Estate”, i.e. allthe rest. During a debate at Westminster Burke isreported to have directed the attention of his fel-low parliamentarians to the press gallery and saidthat there sits a fourth estate, more important thanall of them.

In its essence every “estate” is part of a broadersociety. Estates are social groups, not administra-tive institutions. The concept of three “powers” car-ries a completely different meaning. Emerging fromthe eighteenth-century political philosopher Mon-tesquieu’s theories on the proper ordering of theState, it gives each of the three “powers” or branch-

8 4


es of government – the legislative, the executiveand the judicial – a definite place in the constitu-tion of a law-based State. These branches of gov-ernment wield power in a literal sense, since theymake decisions, laws, decrees or verdicts that arebinding on others.

The media do not wield such power. Theirstrength lies elsewhere, in the fundamentally dif-ferent yet no less important ability to address,influence and convince the participants of the poli-cy process. But the media do not have the final sayin the decision-making process and their opinionsare not binding on others.

Thus, the term “the fourth power” is largely anatavism. In the Soviet system, where all the mediabelonged to the State and every public utterancehad to reflect official State policies, any public crit-icism – even if it was uttered by a journalist – car-ried the weight of an official condemnation. Whenthis power was not used for purposes of politicalpersecution, many people without any other meansof affecting events saw it as a means of solving avariety of every-day problems.

As a number of qualitative and quantitativestudies show, many people still think that themedia, especially the press, do play or should playthis role even now. Approximately 40% of Latvia’sinhabitants say that “writing letters to newspapers”or “meeting journalists” are a very effective or fairlyeffective means of affecting policy. As a means ofparticipating effectively in politics, these methodsare outscored only by participation in elections andreferendums. They are considered to be the mosteffective of all the forms of participation in whichcitizens present reasoned arguments to convinceState officials or their fellow citizens of the correct-ness of their views. Nevertheless, these methodsare not as effective as they were in Soviet times, ascan be seen from this excerpt from a focus groupdiscussion on the chances for effectively fightingcorruption:

“... God forbid, if somebody wrote to a newspaper backthen. We had this conflict in our communal apartment. Theguy responsible for our apartment came and said – fix it your-self for your own money! ... All the renters got together anddecided to write to the newspaper Pravda. We wrote a letter,and a correspondent came. A half-hour later the buildingsupervisor ran over and changed everything himself.

- And now?- You can write what you want! So what! You can throw

whatever dirt you want at them, they’ll just wipe it off.”

During the Soviet period the media could onoccasion serve as something of an ombudsman,helping average people solve their every-day prob-lems. The media were influential thanks to the fearthat any publicly expressed criticism aroused in thestrictly controlled Soviet “public arena.” In a demo-cratic State both the role of the media and themechanisms through which society influencesevents are completely different. There is a func-tioning administrative and judicial system, anddaily conflicts between landlords and renters arenot played out on the pages of the country’s mostinfluential newspapers.

Confusing the term “the fourth estate” with “thefourth power,” people reinforce this misleadingview of the real role of the media in a democraticsociety. Imagining that the media’s power is compa-rable to that of the legislative or executive branchesof government, society can get the impression thatproblems can be solved simply by publicizingthem. If a problem is not immediately resolved aftera newspaper article or a TV newscast, people canstart feeling helpless. Sometimes they blame themedia for the lack of results. In this way the term“the fourth power” not only reflects, but also rein-forces false conceptions about the ways in which cit-izens can actually affect the political process.

Unfortunately, Latvian journalists themselvesare not united in their views on the values and stan-dards that should guide them in their work. Just fiveyears ago there was a lively debate in the Latvianpress about whether journalists may take moneyfrom the people they write about and whether paidadvertisements should be clearly distinguishedfrom editorial material. Even now a columnist forone prominent newspaper defines the standard bywhich journalists should be judged as the ability “topresent reality ... in a complete and multi-faceted way, to bean honest mediator between the reader and this reality,”while a columnist for another well-known newspa-per says: “I find the pseudoneutrality of Latvian journalismrevolting. It’s better to let everyone know who the journalist issupporting and then let them draw their own conclusions,rather than have the journalist try to fool everyone with his‘objectivity,’ but really be advertising his favourite party.”

Latvian journalistic codes of ethics can providesome insight into the system of values of the Lat-vian media. Perhaps they do not always reflect theactual behaviour of the journalists, but at least theyaffirm their ideals and give society a point of refer-ence for evaluating these journalists’ work (seeInformation 3.2). A wide-ranging debate about jour-

8 5

C H A P T E R 3

nalistic ethics arose in Latvia after the municipalelections in the spring of 2001. As a result, a num-ber of publications and electronic media signed acode of professional ethics, thereby joining theranks of those media that already had written codesof ethics. It is to be hoped that active discussionsabout questions of ethics will continue and thushelp to diminish the problems that have existed upuntil now and that are outlined in this Report.

This is especially important because withoutsuch ethical principles the media are unable to ful-fil the role of the “Fourth Estate” in the policy sys-tem. These principles must be generally acceptedand publicly declared in order to serve as an effec-tive basis for media activity and for the public’sevaluation of the work of the media.

It is important for the media to be ready to playthe role of the “the Fourth Estate,” but it is almost

equally important for the other participants in thepolitical system to perceive the media as some-thing more than simply a hindrance or a weapon inpolitical struggles.

As the surveys done for this Report demonstrate,the opinions of Saeima deputies, civil servants, theleaders of municipal governments and the populationas a whole differ to a certain extent on the influence,honesty and competence of the media. For instance,when asked: “Who influences the adoption of important deci-sions in Latvia, and to what extent?” nearly three-quarters(72%) of Saeima deputies – whose work is under con-stant scrutiny by newspaper, radio and TV journalists– answer that the media affect important decisions “toa great extent” or “to a significant extent.” In contrast,only 42% of the population as a whole and of munici-pal government leaders believe that the media hassuch significant influence (see Table 3.1).


Journalists’ codes of ethics

The spring of 2001 witnessed a fruitful debate on journalistic ethics in Latvia. A study on hidden political advertising that came out soon after the March municipal elections caused quite a stir. Partly in answer to this study, a number of prominent media (including Neatkarîgå Rîta Avîze and the leading Russian-language newspaper Chas) jointly signed the Professional Code of Ethics of Latvian Press, TV, and Radio Journalists. This code now joins others that were worked out in the first half of the 1990s by the Latvian Union of Journalists (LUJ), the News Division of Latvian Television (LTV) and the newspaper Diena.

The newly adopted code and the older ones adopted by the LUJ, LTV and Diena all aim to ensure that the information provided by journalists is complete and truthful. “A journalist’s main goal is to ensure that society receives accurate information.” (LUJ) “Journalists must not represent any interests other than society’s right to know the truth about events that it finds important or interesting.” (Diena) “The information that journalists communicate must be believable, objective and complete.” (LTV) “The media must reflect the truth, as far as this is possible. The interests of the readers/listeners/viewers are more important than the interests of the owners, the sources of information or the advertisers.” (Professional Code of Ethics of Latvian Press, TV, and Radio Journalists). The LTV and Diena codes demonstrate a commitment to preventing journalists from becoming involved in real or seeming conflicts of interest and to strictly separating editorial materials from advertising. These codes are clear and detailed, stating, for instance, that journalists are not allowed to “broadcast materials in order to gain some hidden material benefit, to accept gifts, or to include hidden advertising in broadcasts” (LTV) and that “journalists and their employers must conduct their personal lives in such a way as to avoid real and potential conflicts of interest.” (Diena) These principles are also reflected, in less detail, in the other codes: “An author’s text must not imitate advertising.” (LUJ) “Editors and journalists must be objective and must not use the content of articles or radio or TV broadcasts in their personal interest. (Professional Code of Ethics of Latvian Press, TV, and Radio Journalists)

A written, publicly available code of ethics creates a reference point that allows society to evaluate the work of the media. It is much more effective in stimulating quality work than references to unwritten “universal ethical norms” or to confidential clauses in a journalist’s contract. Journalists themselves and society at large must use these publicly declared principles as a means of improving the work of the media.

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8 7

C H A P T E R 3

Nevertheless, in comparing the answers to thisquestion, it is clear that there is a broad agreementon the main trends. Each of the groups surveyedplaces the media in seventh place among the six-teen participants in the political system. Each ofthe groups considers the most influential of theseparticipants to be the ones who are either part ofthe political and economic elite or the main institu-tions of the State (the Cabinet of Ministers, the par-ties in the governing coalition, the leaders of thepolitical parties, business groupings, the Saeimaand the “grey cardinals”). All of the other partici-pants in the political process are seen as being lessinfluential. The relative ranking within these twobroad categories is fairly dissimilar, which makes itall the more significant that the big picture remainsthe same: the elite has a crucial influence on deci-sions, the rest of the participants in the systemhave relatively little influence, and the media aresomewhere in the middle.

All four groups surveyed have similar views onthe competence and honesty of the media. Inresponse to the question: “To what extent do you trustthe media to make competent, honest and just decisions?”less than 3% in each of the groups surveyedanswered that they trusted the media “to a largeextent,” 20 - 28% answered that they trusted them“to a fair extent,” but the majority of between 62%and 76% answered that they trusted them “not verymuch” or “not at all.”

These results are especially significant becausein each of the groups there was at least one organi-zation or group of people that was trusted by morethan 50% of those surveyed. In the population as awhole this was true of only one group, the profes-sional experts, who are trusted to a fair or largeextent by 52% of those surveyed. Civil servants trustnot only themselves and the Cabinet of Ministers,but also the Saeima (52%) and industrial and profes-sional organizations (56%). Saeima deputies trust theSaeima, the Cabinet of Ministers (57%), local govern-ment leaders (60%) and professional experts (83%).Local government leaders trust themselves themost, but trust professional experts only a little less(80%).

When asked what interests the media, all four ofthese groups broadly agree. Over half (51%) of theinhabitants as a whole, 68% of civil servants, 69% oflocal government leaders and 78% of Saeimadeputies agreed fully or partly with the statementthat “journalists are not interested in serious polit-ical analysis, they only search for scandals.”

The fact that the competence and honesty of themedia receive fairly low ratings may seem surpris-ing because surveys have consistently placed TV,the press and radio among those institutions thatpeople trust the most. A survey done in the fall of1999 indicated that the media’s level of trust (69%)was the highest for any State or societal institution.

This seeming paradox could be explained byassuming that society has defined the role of themedia relatively narrowly, seeing them only asbearers of information and as watchdogs (or as“only looking for scandals,” which is the same thing,only in a negative light). Insofar as the media fulfilthis role, they can be trusted. The public seeming-ly does not think that the media can effectively ful-fil any broader functions. Although a large numberof people in the previously mentioned survey donot trust the government (54%), when asked whoshould take the lead in fighting corruption, 74%answer that it should be the government. Only 3%answer that it should be the media.

Thus, it is clear that the Latvian media play amore or less effective role in watching over the workof State institutions. However, they only vaguelyperceive the role they could play in policy forma-tion and, judging by public opinion, do even less toactually fulfil this role.

Forms of participation and

public perceptions of their

effectiveness

Participation can nominally be divided intoelection activities, short-term and spontaneousparticipation, and long-term participation. Theestablishment of contacts with State structures andpartaking in public discussions can be distin-guished as separate mechanisms.

The most popular form of participation in Latvia iselection activities, or voting in Saeima and local govern-ment elections and referendums. Since the restora-tion of Latvia’s independence three Saeima elections,three local government elections and two nationalreferendums have been held. A third national refer-endum regarding draft amendments to the Law onPower Industries did not take place. After a sufficientnumber of signatures had been gathered for holdingthe referendum, the Saeima adopted the amend-ments that had been proposed by the opposition.

8 8


Voter activity since the beginning of the 1990shas slightly subsided but remained generally sta-ble (see Figure 3.2). In a survey conducted by theCentral Electoral Commission following the 1997local government elections, respondents explainedthe relatively low participation rate with a lack ofsuitable candidates and with the conviction thatvoting in elections would not bring about anymeaningful changes.

The 2000 study conducted regarding publicpolicy and participation showed that people con-sider local government elections as a more effec-tive form of influence than Saeima elections, eventhough the participation rate in local governmentelections has been lower (see Figure 3.2). Fore-casts conducted at the beginning of 2001 indicat-ed an increase in voter activity for the March 2001local government elections. The political partiesinvolved also devoted a great deal of campaignactivity to these elections.

Partaking in referendums is seen as the mosteffective form of participation. The 1997 referen-dum took place together with local governmentelections and attracted a larger number of inhabi-tants with voting rights than might otherwise havebeen the case. The initiatives on pension reformreferred to in Chapter 2 are the only ones not tohave made it to the referendum stage.

Latvians participate more actively in electionsthan other ethnic groups. This is partly explainableby the smaller proportion of Latvian citizens

among the other ethnic groups, which is alsoreflected in their lower rate of pre-election cam-paign activity. Activity in elections also increaseswith one’s level of education. The higher the levelof education, the more likely one is to vote in elec-tions. In Latvia, women have been more active vot-ers (particularly in local government elections),while men have been more active in the organiza-tion of election campaigns. The most active votersare persons of pre-retirement and early retirementage. Voting activity decreases for those aged over65. The most inactive voters are young peoplebetween 18 and 24 years of age.

The most active voters in Saeima elections arefrom Latvia’s Vidzeme region, or of the upper mid-dle-class and higher income groupings. The mostactive voters in local government elections are fromLatgale, as well as people who place themselves inthe lowest social group and expect a slight declinein their material well-being. Latgale stands out as aregion with close co-operation between local gov-ernments and the public.

Generally the most active voters are satisfiedwith the available participation mechanisms.Demands for the introduction of additional demo-cratic mechanisms are also less likely among thosewith a higher level of education, family income andposition in society.

The most active voters in referendums are ruralinhabitants, persons of pre-retirement and earlyretirement age, and persons who predict a decline

F i g u r e 3 . 1

Voter participation in elections and referendums, 1990 – 2001(percentage of inhabitants with voting rights)

100

90

80

70

60

50 %40

30

20

10

0

79

62

89

58

72

57

6972

25

8 9

C H A P T E R 3

F i g u r e 3 . 2

Forms of participation and evaluations of their effectiveness(% of surveyed inhabitants who took part in [light blue] or viewed various forms of participation as effective [dark blue])

Voted in Saeima elections

Voted in local government electionsSigned petitions in support of a referendum

Met with local government councillorsParticipated in rallies, pickets, demonstrationsEncouraged people to vote for a particular political party

Met with journalists

Participated in public discussions

Met with ministers and civil servants

Wrote letters to newspapers

Wrote letters to my local government

Turned to NGOs for assistanceParticipated in the organization of at least one election campaignParticipated in the discussion of my muni-cipality’s or parish’s development plan

Member of an NGO

Met with members of the Saeima

Participated in strikesWrote letters to ministries and civil servantsActively distributed information regarding a particular political issueWrote letters to the President,Prime Minister

Donated money to political partiesLobbied to have a political decision taken

0 10 20 30 40 50 60 70

%

6547

6256

2664

1634

1340

1339

1142

1129

1122

940

929

722

637

631

628

623

539

517

437

217

233

127

9 0


in their material well-being. The most passive areyoung people aged18 to 24, non-Latvians, employ-ers and entrepreneurs.

Other forms of participation associated withelections are also mentioned as being effective,such as partaking in the organization of electioncampaigns and distributing information regardingparticular political issues.

Short-term and spontaneous participation is seen to bethe most effective form of political participationafter voting in elections. As can be seen in Figure 3.2,the effectiveness of strikes, rallies and demonstra-tions rates highly, but only a small proportion ofrespondents have participated in them. The high-est proportion of persons attending pickets,demonstrations and rallies is in Riga. The mostactive participation in strikes has been by ruralinhabitants from the Zemgale region, where thelargest farmers’ protests have taken place, includ-ing those of the summer of 2000.

Those engaged in long-term forms of participation (6or 7% of respondents) are about half as numerousas those who have engaged in short-term participa-tion. While approximately one-third of those sur-veyed see activity within a political party as aninfluential form of participation, only 1 to 2% havechosen to engage in it.

Activities in NGOs are seen to be comparative-ly less effective but have a higher participationrate, particularly in Riga and other Latvian cities.The most active NGO participants are of pre-retirement age (45-54 years). While ethnicity is nota deciding factor, NGO data indicate that the lead-ership of such organizations is assumed mostly byLatvians.

The establishment of direct contacts with Stateauthorities and the mass media may be used asa mechanism for both spontaneous and long-term participation. The influence achieved bywriting letters to newspapers or meeting withjournalists is much greater than that which canbe achieved by writing letters and meeting withlocal government councillors, employees of min-istries and State institutions, the Prime Ministeror the President. Of contacts with State institu-tions, writing to and meeting with local govern-ment councillors is twice as effective as writing toand meeting with representatives of other Statestructures. In general, letter-writing, especiallyto newspapers, is more prevalent in Riga, whilethe inhabitants of Latgale are more likely tomeet with officials.

Participation in public meetings (a practiceundertaken by 11% of respondents) or in discus-sions on one’s municipal or parish developmentplan (6% of respondents) could develop into a sta-ble practice. About one-third of those surveyedbelieve such participation mechanisms to beeither very or fairly effective. Participation in pub-lic meetings is approximately equal in Latvia’scities and rural areas, but rural inhabitants, partic-ularly in Latgale and Vidzeme, are nearly threetimes more active in discussions of city or parishdevelopment plans. Latvians have been involvedtwice as often in discussions of development plansas non-Latvians.

About 18% of respondents had not participated inany political activities. Non-participation was charac-teristic of older persons and respondents with a lowlevel of education. Young people aged 18-24 alsohad a comparatively high non-participation rate.

Overall, the most active participants in thepolitical process are Latvians, rural inhabitants, andpeople of pre-retirement or early retirement age, aswell as those with a higher level of education. Inevaluating the political process, most inhabitantsdo so through the prism of the realization of theirown interests.

Certain similarities are discernable among thoserespondents who actively participate in policy-making by using one or more of the participationforms and mechanisms referred to. For the mostpart, such persons are not entirely satisfied with thecurrently available forms of democracy and consid-er that improved political participation mecha-nisms should be developed. Latvians and ruralinhabitants form a greater proportion of such pub-licly active persons.

Political participation is significantly facilitat-ed by access to information regarding decisionstaken by State institutions and knowledge of thedecision-making process. In total about one-thirdof respondents claimed to be informed to a largeor fairly large extent about decisions alreadyadopted by State institutions. Half as manyclaimed to be informed about draft decisions. Ahigher-level education could be mentioned asonly the last of several significant participationfactors. The provision of participation mecha-nisms by State structures is of fundamentalimportance for promoting the participation ofpolitically active persons.

Overall this Report’s research data corroboratesthat of NGOs: Latvia has a good legal framework for

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C H A P T E R 3

participation, but many inhabitants lack the skillsand experience required for meaningful participa-tion in the public policy process.

Participation strategies

In a more extensive analysis of the forms of pub-lic participation in Latvia, this Report distinguishessix different participation strategies (see Figure3.3). Various types of skills, as well as experienceand funding are required to implement them. Par-ticipants can use several strategies at the sametime, and with the accumulation of experience, canshift from one strategy to another.

Spontaneous and short-term political participation strate-gies have great potential, as many people react toevents in the form of “home democracy.” ThisReport’s participation survey shows that 56% ofrespondents discuss what they view as unsatisfac-tory political decisions with their colleagues, mem-bers of the family and friends. Through the publicexpression of their opinion in various manners,people sometimes even hope to indirectly influ-ence the policy process. A typical arena for suchspontaneous participation is the mass media,which, as has been mentioned previously, is amedium in which many people place high hopesand which many consider to be an instrument ofauthority. While it is possible to publicize one’sviews by addressing the media, this is rarely suffi-cient to achieve the realization of one’s interests.This strategy sometimes occurs in the form of indi-vidual expression, or in the spontaneous mobiliza-tion of like-minded people. Even though the inter-ests thus represented may be of a collective nature,their proponents rarely defend them actively overthe longer term. This is one reason why the use ofsuch a strategy is unlikely to have a direct influenceon the public policy process.

The environment formed by spontaneous par-ticipation and “home democracy” creates a basisfor broader participation. Publicly active personsstate twice as often as passive ones that within theenvironment of their families and friends it isacceptable to become actively involved in publicactivities.

The strategy of spontaneously expressing one’sviews is used not only by individuals, but also byinterest groups and professional organizations. Insuch cases, problems affecting the interests of theorganization are defined and a group is delegated

to defend the organization’s interests. Any resolu-tion is seen to occur in the short-term process ofdialogue or spontaneous protests, without engag-ing in long-term participation. This is shown in thefragment of an interview with the head of a profes-sional organization:

“The Architects’ Union is a public organization. It is notassociated in any way with policy in State institutions. It is avoluntary organization with membership fees, congress meet-ings, and board elections.” (Chairman of the Union)

Spontaneous reaction without further participa-tion in the resolution of a problem is a form of par-ticipation that does not require large resources. Itcan provide a basis for the further expansion ofactivities with the participants’ increasing aware-ness of more effective forms of participation.

Another noteworthy form of spontaneous partic-ipation is the spontaneous formation of groups for the reso-lution of concrete issues. This form of activity is expand-ing rapidly, and one striking example has been inthe form of tenant associations, which have beencreated to manage privatized apartment buildings.Such associations arise in answer to such concreteissues as heating and insulation, home repair andthe privatization of land. Most frequently theseassociations arise spontaneously, with the initialtenant meetings occurring outdoors next to theapartment building or in one of its stairwells. Insome cases, this participation grows into perma-nent activity through the creation of an officialorganization with legal status, as was the case withthe Ogre Tenants’ Society.

Similar working strategies are used in Latvia’srural areas, where many small business ideas havearisen through discussions in unofficial groups.Latvia’s Rural Development Programme has alreadybeen described in Chapter 1. In response to theopportunities provided by the World Bank-financed Rural Development Project, local initiativegroups have been established in several parishesto generate local development strategies. Thesehave provided the basis for further business ideasand entrepreneurial activity projects generated toattract rural development credits.

Spontaneous participation mechanisms maybe used also for the defence of long-term interestsin such cases where co-operation attempts do notbear fruit. A protest organized in a non-traditionalmanner has a greater chance of gaining the massmedia’s attention and influencing public opinion.

9 2


F i g u r e 3 . 3

Public participation strategies in Latvia

PUBLIC PARTICIPATION

STRATEGIESIN LATVIA

Spontaneous grouping in reaction to concrete events, as a means of expressing one’s interests and becoming involved in problem-solving activities.

Mechanisms: formation of spontaneous associations for the resolution of concrete issues.Resources: individual skills, “stairwell democracy.”

Participation in response to public involvement promoted by State administrative structures.

Mechanisms: regular participation through institutionalized channels.Resources: support provided by State administrative structures, funding, volunteer and paid work, joint projects with other donors.

Monitoring the activities of State administrative structures and their representatives.

Mechanisms: publicising possible illegal activities, informing the mass media, influencing public opinion, initiating court proceedings.Resources: donor funds, skills, volunteer and paid work.

Assuming functions delegated by the State administration, and providing social assistance through the NGO network.

Mechanisms: delegation of functions, volunteer work, fund-raising.Resources: volunteer and paid work, skills and knowledge, donor funds and membership fees, competence, registered professional associations and interest groups.

Active defence of one’s own group or public interests.

Mechanisms: submission of proposals and recommendations, participation in the preparation of programme documents and regulatory enactments, influencing public opinion.Resources: donor funds and membership fees, experience, knowledge regarding policy-making and influence, skills, volunteer and paid work.

Spontaneous and short-term reaction to events based upon one’s own group interests, without becoming involved in the policy-making process.

Mechanisms: expression of views through various means of communication.Resources: individual and collective skills, competence within the scope of registered professional associations or interest groups, public recognition and “home democracy.”

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C H A P T E R 3

The Environmental Protection Club has organizedboth officially registered and unannouncedprotest activities. One of these took place inDecember 2000 in opposition to the felling oftrees for the construction of a parking garage inRiga’s Kronvalda Park. A sharp conflict betweenpublic and private interests concluded with thefelling of the trees, as described by the environ-mental activist:

“We were unable to climb the trees. The enemy was morealert. (…) We were outmanoeuvred. It was hard to react. Thetrees were felled very early in the morning or at night, wheneverybody is sleeping. Were it not for the Green opposition, thepublic might have noticed maybe a week later. (…) It became afuneral procession for the felled trees.” (Representative ofthe Environmental Protection Club)

Protest activities are commonly conducted bythe Environmental Protection Club to draw publicattention to particular problems, and to put pres-sure on State and local government authorities.

Protest activities are sometimes an extremeform of participation that is adopted after other par-ticipation methods have failed to yield the desiredresults. A group of low-income inhabitants fromVentspils, having felt unable achieve the recogni-tion of its interests through co-operation and non-traditional rallies, took the radical step of burningan effigy of the city council chairman at one of itsassemblies. This drew greater attention to thegroup’s problem than might have been the casewith other methods.

In Latvia, individual unconventional activitieshave led to more permanent co-operation andprovided long-term results. The blockade of bor-der crossing points by farmers in the summer of2000 compelled the Ministry of Agriculture to paygreater attention to farmers’ issues. A stable co-operative instrument has evolved in the form ofthe Farmer’s Co-operative Council, through whichfarmers can co-ordinate their interests with Stateinstitutions.

Examples from experience show that sponta-neous protest activities are an appropriate strategyfor the defence of one’s interests and the resolutionof local issues, and that these provide participantswith experience, skills and knowledge that can beused in regular activity strategies.

The participation of the public can also be initiated byState structures, and is successful in cases where rep-resentatives of the public are offered suitable par-

ticipation channels and partnership (see the sec-tion on Ventspils’ Integration of Society Programmelater in this Chapter).

Some public organizations undertake to monitorthe activities of State administrative structures and their rep-resentatives. Such a strategy is directed to prevent-ing and publicising possible illegal activities withthe participation of the mass media, and co-oper-ating with State institutions in the adoption ofdecisions that are important to society. This is apermanent and responsible form of activity andmost often is directed to the defence of the publicgood. In order to implement such monitoring activ-ities, an official form of organization is necessary tokeep abreast of possible illegal activities or to bean intermediary in the assessment of such cases.

Public interest organizations often undertake anintermediary role between State institutions andmembers of society. This occurs in cases where thelink between State structures and the public isweak and where inhabitants are not informed aboutadopted decisions. Public interest organizationsthen step in to provide the missing information andsupport network. Since the exposure of hiddenpolicies is an important element of such a strategy,information regarding decisions most often isacquired through unofficial channels. Many publicmonitoring groups and organizations have theirown channels for the acquisition and further trans-fer of information:

“Last week J. M. informed us that a group of nouveauxriches is levelling [seaside] sand dunes with bulldozers. Thishas not been approved. Later, of course, it will be.” (NGOrepresentative).

Public organizations thus ensure openness withan alternative information transfer system. Suchorganizations also provide support and practicalknowledge for the resolution of various issues:

“It is ironic that personal contacts with people in the RigaCity Council shorten the information acquisition process. The-oretically we have many problems with this. People inform usthat such and such an event is occurring. We request infor-mation from the Riga City Council or the [Greater Riga]Regional Environment Administration. Theoretically, anyoneshould be able to go and find this information for himself. Buteither they are unable to obtain it or its acquisition time isvery long. People are unaware of the fact that municipalemployees are their servants, whose duty it is to provide infor-mation.” (NGO representative)

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Public interest organizations have undertakena unique law enforcement (ombudsman) role, asthey serve the interests of inhabitants who havenot gained or do not know how to acquire supportin State institutions.

The supervision of State structures is usuallydone in a professional manner and requiresknowledge about State administrative mecha-nisms and regulatory enactments. Public organiza-tions usually have a small core of paid employeeswho ensure the continuity of activities. This typeand volume of work requires a full or part-timecommitment because contact with State institu-tions must be made during working hours, whenmost of the working public is indisposed andunable to directly use such participation activities.Moreover, in contrast to the previously discussedstrategies that do not require the investment ofconsiderable resources, this type of permanentparticipation is possible only with the assistanceof donor funding. An example of this strategy islater described regarding the construction of aparking garage in Riga.

Another participation strategy is the assumptionof functions delegated by the State to NGOs. Enduringtraditions of co-operation have thus been estab-lished between stable NGOs and State institu-tions. In some cases the NGOs assume their tasksbefore the adoption of the relevant national legis-lation, as with Latvia’s medical professional organ-izations, which have been performing broad regu-latory and educational functions in their sectorsfor years.

According to data from the Non-governmentalOrganization Centre, some 80% of public organiza-tions co-operate with State and local governmentstructures in the adoption of decisions and prepa-ration of regulatory enactments. Participation mayalso occur on an unofficial level through the provi-sion of unofficial consultations to the relevantdecision-makers. Such a strategy requires long-term participation, knowledge regarding policy-making, interest-defending ability and stable con-tacts with State administrative structures. Thisstrategy will later be examined in more detailregarding reproductive health policy.

Practical aspects

of participation

Three examples of effective participation will befeatured further in this Chapter, and special atten-tion will be paid to the participation strategies usedin these cases.

One example concerns the Ventspils Integrationof Society Programme, which was established topromote the participation of residents, and particu-larly non-citizens, in the preparation and discussionof decisions by their local government. Obstacles tothe existence of an integrated and open societywere determined, and methods for their optimalresolution were proposed. The programme looks atintegration from the perspective of the local com-munity and the individual. The people of Ventspils,and particularly its non-citizens, were encouragedto take part in discussions of the programme and toincrease their level of participation.

The second example of participation concernsthe construction of several underground and multi-storied parking garages in the centre of Riga. Theseconstruction activities resulted in acrimonious pub-lic and NGO confrontations with the Riga City Coun-cil. Various issues were discussed in relation to thiscase, including construction in the natural territoriesand green zones of Riga, the fate of trees and gar-dens, the fate of the city’s cultural and historical her-itage in the designated construction sites, and theimprovement of the traffic flow in the city. Oppo-nents of the projects viewed them as unethical, andas the manifestation of a nation-wide encroachmentby State structures and entrepreneurs onto publicgreen space. Public participation partially influ-enced decision-making on these issues. In one casethe planned garage was not built, while in the otherscompromises were reached.

The third case of participation is related toreproductive health policy, which in the widestsense is directed to the regulation of the demo-graphic situation in the country. Latvia has one ofEurope’s lowest birth rates and is not experiencinga full renewal of its population. Reproductive healthand economic indicators reveal much about thelevel of a country’s development. Reproductivehealth policy is understood as policy regarding fam-ily planning, sexual health, medical treatment ofinfertility, maternity assistance and public educa-tion. This is a wide field where State institutionsmust co-operate with local governments, schools,

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NGOs and all levels of medical service providers,beginning with primary care doctors and endingwith specialized service professionals.

Public participation: the

example of the Ventspils

Integration of Society

Programme

The Ventspils Integration of Society Programmewas initiated by the chairman of the Ventspils CityCouncil and was worked out in about ten months froma basic idea to a final document (see Information 3.3).

One of the issues considered in forming theintegration programme was increasing public par-ticipation by creating new forms of public participa-tion and encouraging the public to use them. Inanalysing the development of the programme, onecan determine several successful factors.

The formulation of the programme was skilfullymanaged and the varied interests of residents wereco-ordinated. The city’s residents formulated the


Formulation of the Ventspils Integration of Society Programme

May 1999. The Ventspils City Council chairman presents his initiative.May-July 1999. Four City Council-organized meetings take place with the participation of

representatives from local government institutions and various NGOs. The significance of the initiative is assessed and a solution is proposed. The public is involved in formulating the first ideas regarding the practical side of integration.

On 26 July 1999, the City Council formally authorizes the formulation of the Ventspils Integration of Society Programme (SIP) to facilitate the City Council’s work in promoting the consolidation of a civil society, to ensure the implementation of the national State Integration Programme in a timely manner, and to foster the development of Ventspils as a dynamic, open and modern city.

July 1999 to January 2000. A working group is established with the participation of City Council and other municipal representatives, the Ventspils School of Graduate Studies, the Naturalization Board’s regional office, the Ventspils branch of the Latvian Society for the Blind, the public organization Nåc lîdzi! (Come Along!) and Ventspils High School No. 3.

The working group agrees on the definition of integration and on the course of work to be followed. It considers the means at its disposal for co-operation with NGOs, the hearing of non-citizens’ interests and the use sociological research.

The working group discusses the programme’s structure and agrees on an implementation strategy. The draft programme is published in the mass media. Experts are invited to comment, and an annual public forum is organized.

In February 2000 public discussions of the integration programme are held. Some 50 residents directly take part. Reviews and opinions regarding the draft SIP are published in the newspaper Ventas Balss.

On 17 April 2000, the Ventspils City Council approves the final version of the Ventspils Integration of Society Programme and establishes a permanent commission for its realization.

On 29 April 2000, a forum entitled Integration of Society in Europe, Latvia and Ventspils takes place. The forum is attended by the President of Latvia, foreign diplomats, local government representatives, the OSCE mission and UN representatives (as Ventspils SIP experts), NGO representatives, representatives of local government institutions, and the public. The Ventspils SIP is formally put forward and the tasks of local governments in realizing full societal integration in the country are discussed.

In January-March 2000 a candidate list for the city’s Consultative Council for Non-citizen Issues (KPNJ) is published and discussed.

In May 2000 the Ventspils Consultative Council for Non-citizen Issues is established. It is granted local government commission status, along with the right to delegate its representatives to other commissions established by the City Council where the KPNJ has been accorded voting rights.

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programme with their own resources, using availablestatistical data and sociological survey materials.They also prepared sectoral assessments and prob-lem descriptions. Every resident had a say regard-ing the content of the programme. Outside expertswere invited in the last phase of the project.

The draft programme was provided for discussionto the widest possible circle of Ventspils residents,who were invited to partake in the discussions. Alllocal mass media were informed of its progress, andthe full text of the draft programme was published inboth Latvian and Russian. The two public discussionswere attended by both individual residents and NGOrepresentatives. The most active participants wereRussian-speaking non-citizens, whose inability tospeak the Latvian language and non-citizen statuswould normally restrict their participation.

The residents of Ventspils were involved, andnot simply informed about the contents of the pro-gramme, with special attention being paid to Russ-ian-speaking residents. In one of the places for dis-cussion of the integration programme – Pårventa,where the majority of residents are Russian-speak-ing – the discussions took place in Russian at therequest of those present. This show of respectraised the prestige of both the working group andthe programme itself.

Even though the nation-wide Integration of Soci-ety Programme had been widely discussed inVentspils proper, not much information hadreached the city’s Russian-speaking residents. Itwas actually the Ventspils integration programmethat generated interest about the nation-wide pro-gramme and gave rise to local-level discussions.

The Ventspils Integration of Society Programmewas designed to establish enduring, reciprocal dia-logue between the public and the city’s local gov-ernment institutions. During the formulation of theprogramme, the City Council opened (and contin-ues to operate) a “hot telephone,” through whichany resident could express his or her concerns. Postboxes were also placed in various locations through-out the city for the submission of written recom-mendations, which were replied to by city officials.

As a result of the formulation of the Ventspils inte-gration programme a new type of institution in Latviawas established – the Ventspils Consultative Councilfor Non-citizen Issues, which is made up of non-citi-zens and recently naturalized citizens. The Consulta-tive Council has an advisory function and may dele-gate its members to local government commissions.At present, representatives of the Council are partic-

ipating in the work of 13 local government commis-sions, with the right of one vote in each commission.

The Consultative Council for Non-citizen Issues isan intermediary institution between a municipalauthority and the public. For non-citizens and newcitizens it provides a stable and long-term participa-tion arena, as non-citizens are denied the opportu-nity to use the most popular and most effective par-ticipation forms (at least according to respondents’replies) – elections and referendums. The sense ofrejection that many non-citizens feel gives rise toinsecurity about their status and makes them reluc-tant to use other forms of participation that are avail-able to them by law. In the participation study forthis Report, non-citizen respondents acknowledgedthat they often did not turn to local governmentswith their problems, because they considered thatlocal governments work only for their electors.

The Council ensures a communications networkbetween residents and the local governmentthrough the activity of the residents themselves. It issignificant that this network arose from the wish ofthe local government to hear the concerns and inter-ests of the city’s residents and to transform them intoequal partners. As one of the members of the Con-sultative Council said, the opportunity to work insuch a council is helping people regain respect forthe State. Some of the non-Latvian intelligentsia whowere actively involved in the independence move-ment during the 1980s became non-citizens withoutvoting rights in the restored Republic of Latvia. Manyfelt superfluous, unwanted and betrayed. Their with-drawal from participatory activities as a whole was apassive protest not against the State as such, butagainst the expression of State authority:

“I have four generations living here, and yet I have toprove that I am loyal to the country. What is this country?Political parties? I have not been in prison, and I do not haveto prove my loyalty. I know Latvia’s history fairly well. Alsothe language and the national anthem. That is why I did notassume citizenship.” (Member of the ConsultativeCouncil)

The formulation of the Ventspils integrationprogramme gave rise to several other forms of par-ticipation, including the establishment of a unionof national cultural societies, cultural events proj-ects, and a people’s diplomacy initiative. Withinthe scope of this last activity, Ventspils residentsof Russian origin – referring to the poor politicalrelations between Latvia and Russia – established

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links with Russians in Russia in the search for newforms of political, economic and cultural co-opera-tion. They also shared their thoughts about the cir-cumstances of the Russian-speaking minority inLatvia.

Chapter 1 of this Report shows that trust inLatvia’s State institutions is low not only amongnon-citizens, but among a wide spectrum of thecountry’s inhabitants. The formation of co-opera-tion networks at various levels – and doted withreal powers – between State authority structuresand the public, could become a viable trust-pro-moting venture. The Ventspils Integration of Soci-ety Programme is one example where a co-opera-tion network was established with the support of alocal government, and which generated publicactivity from a part of the population that had notbeen active up until then.

Monitoring of State and local

government institutions: the

example of the construction

of parking garages in the

centre of Riga

The controversial construction of several park-ing garages in Riga brought forth several partici-pation strategies from the public. Individualprotests appeared in the form of both daily con-versations under “home democracy” procedures,and in the form of visits, telephone calls and let-ters to the mass media and NGOs. The reaction ofsome members of the public was quite emotion-al, and expressed in concerns about the disap-pearance of Rigans’ favourite rest areas, reducedair quality in nearby apartment buildings, and thefelling of trees in city parks. Public organizationscombined this individual activity into collectiveaction, and individual concerns were translatedinto a political level of communication (see Infor-mation 3.4).

In this case only a few interest groups engagedin active work. “Green” interests were representedby members of the Environmental Protection Cluband the Green Party of Latvia. The Delna branch ofTransparency International and the Soros Founda-tion – Latvia worked against the exclusion of the

public from the decision-making process and theadoption of decisions against the public interest.The Latvian Architects’ Union also expressed itsdissatisfaction with the projects supported by theCity Council.

The most successful dialogue was between theentrepreneurs who planned the parking garagesand the Riga City Council. The entrepreneurs hadcarefully prepared projects, well-trained employ-ees with good communications skills and their own“good name” at their disposal. The City Counciltook a strong stand that went counter to its ownRiga development plan for 1995-2005, and classi-fied its contributions to the construction of theparking garages as investments.

The co-ordination of interests with the public wasnot of decisive importance. Even though public dis-cussion of the Jékaba Arkåde parking garage was organ-ized as provided for by law, it did not appear to beseriously aimed at clarifying the views of the broaderpublic. One entrepreneur described it as follows:

“I placed advertisements in Diena and Rîgas Balss. It istheir own fault if they do not read the newspapers. There isnothing I can do about that. About 20 people showed up. Itwas very good – no problems. There were no ‘Greens.’ Thatwas their problem.” (Entrepreneur)

Public discussions are often poorly advertisedand take place for form’s sake. Newspaper noticestend to “disappear” in the sheer volume of printedinformation.

“It is not that people are not interested, but that it is notorganized so that people come (…) If a noise is not made, thenthe mass media are not involved. There was a discussion.Where were you then?” (NGO representative)

Public discussions regarding the projects didnot take place in the context of Riga’s developmentand were held merely for form’s sake. The onlyexception was with the project at the VérmañdårzsPark, for which the City Council placed a suggestionbook in its vestibule, and which allowed any mem-ber of the public to express his or her opinion. How-ever, this concession by the City Council did notreceive a universally positive evaluation:

“Two books were filled. We wanted to publish [some of thematerials] but couldn’t get near them. Only for half an hour.On the one hand the views are written, but on the other theyare still kept hidden.” (NGO representative)

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In the end, the Riga City Council took the viewsof the public into account and decided against theconstruction of an underground parking garage atthe Vérmañdårzs Park. However, a full compilationof the views expressed remained inaccessible tothe public.

The entrepreneurs involved in the other casesform a powerful interest group that seems to havehad a greater influence on city councillors than dis-cussions with the public. While these entrepre-neurs do not ignore the public interest, they look atit primarily from an economic perspective. Marketsurveys show that parking garages around Old Rigawill be used by employees of the Saeima, govern-ment ministries and financial institutions, residentsof Old Riga and entertainment seekers. The reac-tion of the public to the projects is not seen to beas objective and significant as market surveys andexpected profits. The initial public reaction to the

construction of the Jékaba Arkåde parking facility wasmostly negative, and potential clients from theneighbouring Jékaba kazarmas building complex alsoprotested. Nevertheless, the project went ahead asplanned. A compromise agreement reached in dis-cussions with City Councillors and public organiza-tions was not fully implemented, as several treesthat were supposed to be left standing were latercut down, and a number of the trees saved as aresult of the compromise were damaged.

This openly demonstrates the weak position ofsome public organizations and State and local gov-ernment institutions in the face of private capitalinterests. Neither the public nor the supervisorymunicipal institutions involved could ensure the fullimplementation of promises made during discus-sions. The public was poorly organized in this case,and the public organizations involved were unableto mobilize broad and sustained public activity.


Participation attempts and mechanisms regarding the construction of parking garages in the centre of Riga

Agents involved:• Riga City Council• Entrepreneurs• Individual residents• Public interest organizations

Stages and mechanisms of participation1. Residents provide information to the mass media and public interest organizations through

letters, telephone calls, visits, and subsequent publications in the press.2. Representatives of the public take part in the public discussions announced by the entrepreneurs.3. An exchange of views takes place in the mass media.4. The Environmental Protection Club organizes various protest activities.5. Public interest organizations co-ordinate their views about the projects with the Riga City Council

and arrive at compromise solutions.6. The legal aspects of the parking garages’ construction are investigated with the financial support of

the Soros Foundation - Latvia.7. The Soros Foundation verbally asks the Minister for Special Assignments Regarding the Reform of the

State Administration and Local Government Affairs, the Prosecutor-General, the plenum of the Supreme Court and the State Audit Office to bring the matter before the Constitutional Court, but is turned down.

8. The Soros Foundation submits a written request to the Constitutional Court and asks it to investigate the matter. The Court does not take up the issue.

9. Protest activities continue, but the number of active supporters decreases as this form of activity loses its effectiveness.

10. The Environmental Protection Club considers changing its participation mechanisms and turns to the courts.

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On the other hand, the builders of the parkinggarage did agree to archaeological excavations onthe site, felled less trees than originally planned,planted new trees following the completion of theproject, and made serious architectural efforts toensure that the structure clashed as little as possi-ble with its surroundings.

As mentioned previously, public pressure com-pelled the City Council to rule against the construc-tion of a parking garage at the Vérmañdårzs Park,and compromises were achieved in the other cases,including the announcement of a new tender for theconstruction of a parking facility at the riverfront.

The public defended its interests through theuse of two different forms of influence. Protestactivities drew the most public attention, had agreater effect on influencing public opinion,induced dialogue and achieved compromise solu-tions. However, the Greens did not manage to sus-tain the momentum of their protests and mobilizesufficient public support.

Resorting to court action has not been any moreeffective. The Soros Foundation – Latvia becameinvolved in the dispute after reading publicationsin the mass media and after receiving personal andtelephone complaints by individual representa-tives of the public. The issue was discussed by theFoundation’s Civil Society Commission, which ruledthat the Foundation should investigate the issuefurther before taking a concrete stand. To datethere have been no concrete results affecting theactual realization of these projects. Having receivedunofficial verbal refusals, the Soros Foundation and

the Delna branch of Transparency International con-tinued to correspond with various State institutionsin order to get the car park issue examined by theConstitutional Court. While there is little likelihoodof this happening, the main aim of the Soros Foun-dation has been to use its monitoring actions todirect the activities of local governments towardstransparent and responsible policy-making.

“[Success] in the car park matter was 50:50. From thepoint of view of a court battle we have lost. But the public haswon by showing that the local government cannot do whatev-er it likes. We have made the local government think abouthow it will operate next time. (…) We raise questions and getthings moving. Then people become more educated. The localgovernment has to answer for its activities.” (NGO repre-sentative)

With protest activities having lost their effec-tiveness, the Environmental Protection Club hasconsidered taking the Riga City Council to court.This activity is really directed towards the future.According conservative estimates, in the case of adefeat, it would take several years for the matter togo through the entire Latvian court system andreach an international court. By then other issueswill have assumed greater importance.

Organizations fulfilling a “watchdog” role in thepublic interest seek effective ways to improve thesituation step by step. Even if no concrete result isachieved, such activities have the positive effect ofactivating the public and making it more difficult todisregard public interests in the future. According


Romåns Vainßteins, Professional world cycling champion

A small nation with great resolve

I like the fact that Riga is being renewed and modernized at such a fast pace. Riga’s central area is kept clean and tidy. Parks in Riga’s central area and other cities are in order and well taken care of. I am particularly pleased with Ventspils, where development is taking place at full speed. The construction and modernization of the sports centre in that city is a great step forward, because young people will have a place to entertain themselves as well as the opportunity to become high-class athletes.

I am glad that every inhabitant has the opportunity to work and take responsibility for his own prosperity and happiness as he chooses. I am proud that Latvia is an independent nation and I want it to remain that way in the future. Our forefathers fought for centuries to be free. I am proud to be Latvian and I want my children and grandchildren to be Latvian. We are a small nation but in our hearts and souls we are as large as any other.

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to representatives of such public interest organiza-tions, activities of this nature help to form and tostabilize participation channels, and render eachsuccessive form of participation easier to imple-ment and more effective.

Policy-making and the

defence of interests:

the example of reproductive

health policy

Reproductive health policy is one field whereNGOs have become actively involved, co-operatingwith State institutions and assuming some of theirfunctions. Nationally this policy is not defined.A draft reproductive health law has been in prepa-ration since 1994 and was passed in its first readingby the Saeima only in 2000.

The long road of the reproductive health lawthrough the corridors of power can be explained by alack of interest on the part of those in political office.Reproductive health policy is very costly. Healthservices, investments in the purchase of technology,and social assistance to families with children incurgreat expenses. Reproductive health policy affects abroad yet “scattered” part of the population, as itdoes not address as concrete a target group as, forexample, pension policy. Therefore, politicians havenot advanced it to the centre of their activities.

In the previously discussed cases of participa-tion the policy process was directed by powerfullocal governments and entrepreneurs (with theVentspils integration programme it was the localgovernment, while with the Riga parking garages itwas the Riga City Council together with entrepre-neurs). In contrast, reproductive health policy isbeing put forward by a group of health specialistsand representatives of the public. These peoplehave assumed part of the State’s functions in theformation of reproductive policy, and are seeking todefend their own interests in the process.

The reproductive health sector can be dividedinto two policy traditions that exist in parallel. Onetradition is characterized by centralized, closedand hidden decision-making dominated byintrigues, as other interested participants andrank-and-file doctors stay in the sidelines and qui-etly criticize the process amongst themselves:

“X does not really want to leave the Riga City Counciland begin to work. In principle he is right. That is related toelections. X is the State proxy in hospital B. He forces hospi-tal B to its knees, which has to do the same [as the hospitalmanaged by X]. Well, the manager of one hospital cannot bethe State proxy in another. That is the way it happens.Nobody gets let in.” (Doctor)

Passivity is upheld by several circumstances.Many doctors do not believe in their abilities tointervene. A stable view has evolved regarding theauthority hierarchy in the medical sector: in orderto intervene one must work in “high” positions andbe linked to political parties. A second contributingfactor is the insecure position of reproductivehealth specialists. With cardinal changes in thehealth care system, the number of places for doc-tors is decreasing. The birth rate is falling and thedemand for maternity specialists has rapidlydecreased. Several maternity departments inLatvia have been closed. Many district centre hos-pital maternity sections are underworked and thestaff fear losing their jobs in the case of hospitalmergers. Financial resources in the sector are limit-ed and there is a constant battle for them. In such asituation it is not easy to overcome personal inter-ests and to work in the name of collective goals.

The perception of a centralized policy is echoedin the education system. Active youths from theLatvian Family Planning Association Papardes zieds(Fern Blossom) characterized the practice of healtheducation in their schools as reflecting closed,incompetent, and non-transparent teaching meth-ods. Only one of the youths said that it was possi-ble to freely express one’s own views on reproduc-tive health in his school.

The second tradition in the reproductive healthsector is one of involvement and participation, par-ticularly by NGOs, which have been active in theformulation of reproductive policy. For example,Latvia was also represented by NGO workers at the1994 UN Cairo conference on population and devel-opment. A serious assessment of the situation atthe national level began only in 1997, when the Lat-vian Ministry of Welfare, in co-operation with theUN Demographic Fund and NGOs, conductedresearch and prepared a draft reproductive healthstrategy.

Interest in Latvia’s reproductive health policieshas been shown by foreign NGOs and foundations,the World Health Organization and the UNDP.Papardes zieds – the first Latvian NGO in this field – was

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established with the direct assistance of émigré Lat-vians, who provided personal leadership and inspi-ration for the activities of the organization. Jointactivities provided an opportunity to establish a col-lective strategy for reducing the level of abortionsand educating the public on reproductive health.

A powerful organizational network with extensivework experience has now developed in this field,uniting both professional and public organizations.According to data from the Non-governmental Orga-nization Centre, about 250 NGOs mention reproduc-tive health in their spheres of activity at least once,while about 40 professional and public interestorganizations actively operate in this field.

The largest number of public interest organiza-tions associated with reproductive health work inRiga – about ten in total. Nine organizations oper-ate in Kurzeme, six in Zemgale and Vidzeme, andfive in Latgale. Some of the regional organizations,such as the Youth Health Centre in Dobele, havemanaged to attract foreign donors. The principalproblem outside of Riga is the lack of personnelwith management and co-ordination skills, which isexacerbated by the exodus of talented young peo-ple to the larger cities to further their education. Itwas due to this circumstance that the successfullyestablished youth centre in Saldus closed its doors.

The outstanding and long-term leader amongLatvia’s reproductive health organizations is Papardeszieds, which has been operating in the educationalfield since 1993. Representatives of the organizationacknowledge that its initial goals have been largelyachieved. A volunteer teaching network has beenestablished and teaching materials have been pro-vided to schools. The level of knowledge amongyoung people has improved. Now the task of influ-encing policy, and the acquisition of skills associatedwith this, has been brought to the foreground.

“We are travelling along two roads. Educating the public– providing information and opportunities. Teaching peoplethat they have rights, and then promoting an active attitudetowards reproductive health, and participation in policy-mak-ing. The second is to work with policy-makers. We have edu-cated members of the Saeima. I spoke with M in Cairo for awhole week. All of those who were there from the ministry –Z, P, K – have changed. In this field we have educated theentire higher echelon. (…) B is the [next] patron of the BalticGynaecological Congress. He agreed while he was still themayor of Riga. I hope that at the congress we will still be ableto say: Prime Minister B, ex-mayor of Riga.” (Representa-tive of Papardes zieds)

It is significant that young people who are notsatisfied with the information acquired at schoolregarding reproductive health have becomeinvolved in the activities of Papardes zieds, andgained an education as volunteers in this NGO.Thus, while not yet being aware of their participa-tion in political life, they have become policyimplementers. Politics and democracy are alsoassociated with “grassroots” forms of participa-tion, which initially may be unwitting, but whichprovide valuable participation experience.

The participation of public organizations in theformation of reproductive policy allows one tomake several conclusions regarding methods ofinfluence and participation. One of the methodsused most often by the organization is personalcontacts with influential politicians and civil ser-vants. Various situations are taken advantage of –both when officials become patients and throughjoint participation in various events. Influentialofficials involved in the realization of projectsbring them attention and raise their prestige.

The second widely used method involvessoliciting the participation of other NGOs in bothofficial and unofficial working groups. The draftreproductive health law, for example, was devel-oped in an unofficial working group with theactive participation of representatives from pro-fessional and public organizations.

Another method of influencing policy isthrough official requests and legislative propos-als. For example, Papardes zieds and theMenopause Association asked the State to par-tially fund hormonal therapy for women duringmenopause. This request was based on predictedsavings in health care funds, as complications thatcan arise by not using such therapy might cost theState even more.

As a whole, reproductive health policy reflectsthe entire policy process in the country. The dis-satisfaction of people working in this sector and ofpatients receiving medical services has fuelledtheir desire to improve the situation. This is animportant political factor that stimulates peopleto become active agents of policy formation. Thedefence of interests must be formulated andexpressed in a language and level that conformsto the policy process. People become politicalagents from the moment that they formulate andexpress their interests.

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Summary and

recommendations

The public arena, in which there is a place for allpublic interests, is beginning to appear in Latvia.The first steps have occurred in small local govern-ments, which have themselves undertaken to buildbridges toward a civil society, and in individualState institutions. However, the ruling politicalmodel is still far from the ideal of a civil society.Even though the legal framework for it has beensecured, participation in practice has been increas-ing at a slow pace and with difficulty. On the oneside stands the public, which does not know theextent of its rights and which does not believe ineither the promises given by the government or inits own ability to influence the implementation ofthese promises. On the other side can be found theState administrative system, which does not con-sider the views and desires of the public to be anintegral part of its work motif. Each side mentionsthe other’s unwillingness and inability to partici-pate as a reason for non-co-operation.

A large potential for activity lies dormant with-in Latvian society, where there is a comparativelyhigh interest in the public policy process. Only22% of those surveyed said that they are not inter-ested in politics. Currently this public interest isnot being used to its full extent. It is mainly usedin elections and referendums, and in the discus-sion of politics under “home democracy” proce-dures. Most people are not aware or have a limit-ed knowledge of the public policy process andtheir right to influence it.

The NGO sector has reached a certain level ofmaturity and competence. Several NGOs can workas equal partners with State and local governmentinstitutions in deciding on issues and implementingadopted policies. Clearly, not all members of socie-ty can resolve all issues. But the benefit of societalparticipation is more than just competent decisions.The most important benefit is public support for thepolicies adopted by State institutions.

Public support cannot be gained by simply“going through the motions” with formal consulta-tions. There must be long-term co-operation withpublic interest groups following the adoption of adecision and its implementation. The quality andimplementation of decisions is thus improved, anda competent and active society is formed.

The advent of public participation in policy-making would be facilitated by following four paral-lel steps:• Promoting the accommodation of public inter-ests by State institutions;• Strengthening the ability of the public to partic-ipate;• Improving public monitoring mechanisms;• Promoting co-operation between NGOs in thedefence of public interests.

Promoting the

accommodation of public

interests by State institutions

This direction of development on the road toincreased public participation arises through theawareness that State structures cannot and mustnot take decisions in the name of society withoutconsulting with it. The divide that separates theState administration from society is conducive toclosed policy-making that serves mainly privateinterests. It is strongly inhibiting the develop-ment of the country and an improvement in thewell-being of the population. Closed policy iscosting the country dearly, and in the future thesecosts could be even greater. Only with the pur-poseful opening of State and local governmentinstitutions to the public will irresponsible, chaot-ic and corrupted policy-making be reduced.

Politicians and civil servants will not acquirethis awareness suddenly and unexpectedly, but asthe result of systematic education and the acquisi-tion of knowledge. The relevant political educa-tion programmes must be presented withoutdelay, without awaiting the natural change of gen-erations in the future. The competence of Stateand local government structures is analysed morein detail in the next Chapter.

State structures need to offer real co-operationmechanisms directed both to the hearing of pub-lic interests and to accountability for decisionstaken. NGOs are one step ahead of State struc-tures in the sense that a broad database has beenestablished regarding Latvian NGOs and theirareas of activity. This database can help State andlocal government institutions to find appropriateco-operation partners.

Strengthening the ability of

the public to participate

A second road that must be travelled in order forthe public to enter and participate in politics, is thestrengthening of its participatory abilities. This couldbe achieved with the civic education of society.Some educational functions have already beenassumed by NGOs in cooperation with the massmedia, but the popularization of educationally posi-tive examples is only one step in the process. Civiceducation must enter school curricula and continuingeducation institutions with the support of the State.

State support in both moral and financial formmust be provided for NGOs, which form the partic-ipatory base for public participation. In Latviasocial activity is increasing despite the lack of a uni-fied and conscious State NGO policy, rather thanbecause of any consistent policy. As Latvia pre-pares for membership in the European Union, weshould recall that Latvia wishes to approach amodel that accords civil society greater importancein State policy-making.

In the previous Reports from 1996 and 1998,many recommendations were made for strengthen-ing the NGO sector. These have not, however,gained widespread support. The authors of thesereports maintain that:• The State must establish a clear tax policy inrelation to NGOs;• Organizations operating with donated funds inthe name of the public good must not be taxed(NGOs share all donations with the State);• The State must promote philanthropic activitiesby offering advantageous tax breaks to donors andby facilitating the establishment of foundations.

The current experience of co-operation betweenthe State and NGOs must be assessed. The successor failure of the delegation of State administrativefunctions to NGOs has still not been appropriatelyevaluated. At this time there is no common under-standing of the usefulness and effectiveness ofsuch practices, and there is no policy regardingtheir further development. The fields in which theassistance of public and private organizations couldbe useful need to be clearly determined. In someministries and State administrative organizationsco-operation with NGOs has been successful, whilein others it has not gained the required support orhas turned out to be unsuccessful. Allegations

regarding an unwillingness to co-operate havebeen made by both sides. An evaluation of co-operation to date will not only help to better organ-ize future policy, but also provide the positiveeffect of openly recognising the important role ofthe public at large.

Improving public monitoring

mechanisms

The third path involves the strengthening ofmechanisms that promote the realization of publicinterests. A good legislative framework alreadyexists in the definition of people’s rights, but it isalso necessary to provide guarantees and mecha-nisms for the realization of these rights. The 1998Report recommended the establishment of aninstitution that would fulfil the role of ombudsman,whose functions are currently being carried out inLatvia by various NGOs. In Lithuania such an insti-tution is operating successfully. One can alsochoose an alternative to the appointment of anombudsman by strengthening existing mecha-nisms. In such a case, NGO activities would requirestrong support from the country’s court institutions.

With the expansion of opportunities for the pub-lic to monitor State institutions, the implementa-tion of this Report’s first two recommended stepswill be more easy to realize. However, one shouldremember that an improvement in public monitor-ing mechanisms requires first and foremost thepolitical will of those in power.

Promoting co-operation

between NGOs in the

defence of public interests

The public at large still does not get sufficientlymobilized and does not use all of the mechanismsat its disposal. NGOs could implement more uni-fied and purposeful activities in the defence ofpublic interests. They would achieve better resultswith consolidated and consistent action. Expandingcontacts and co-operation with other interestgroups would also help. The non-governmentalagents with the greatest influence in policy-makingare experts and professional organizations. This

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C H A P T E R 3

potential should be activated, and in case of neces-sity, organized and supported.

The basic reason behind the lack of a consistentpolicy regarding civil society is the previously men-tioned inability or unwillingness of State structures

to understand the country’s national developmentpriorities. If the contribution of civil participation andnon-governmental organizations to national devel-opment is not fully appreciated, then public activitywill continue to remain sidelined as unimportant.

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istrative territorial and regional reform should becompleted as soon as possible, though not overlyhastily and in a considered manner.

Sufficient funds must be provided for the per-formance of local government functions, and toensure the effective use of these funds. Administra-tive territorial reform, educational and consultativemeasures, and fully functional accounting systemsshould help in this regard.

The manner in which the preparation and adop-tion of decisions occurs at the local governmentlevel, and the fact that currently this process is onlyrelatively open, indicates that the mutual estrange-ment between decision-makers and the public atlarge must be reduced. Only then will the publicevaluate the decision-making activities of Stateinstitutions more positively, and only then will thelegitimacy of the policy-making process increase.

7 4


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Introduction

Latvia has two main levels of public adminis-tration: central (or national) and local (or munic-ipal). Each level has its own specific functionsand tasks, and ideally, their execution should bebalanced, as high quality public administrationrequires the same basic implementation princi-ples in both cases. The concentration ofresources and the optimization of governance atonly one level threatens the uniformity of humandevelopment as a whole. Chapter 4 examines thepossibilities of implementing effective and highquality public policy for promoting humandevelopment at both levels of governance inLatvia.

In the context of this Chapter and from thehuman development perspective, the activities ofLatvia’s administrative institutions will be exam-ined from various aspects:• management – the capacity for long-term plan-ning from a human development perspective;• multisectoral co-operation – the capacity towork in a team and to plan policies in co-opera-tion with other departments;• knowledge – the capacity to integrate policyexpertise in decision-making, to understandhuman development trends and to observe thesetrends for the most effective formulation andimplementation of policy;• accountability and reporting – the capacity toanswer to the public about policies and theirresults, and the capacity to promote participatorydecision-making.

The capacity of administrative institutionsdepends on many factors that are difficult todefine and to measure – from their infrastructureand environment to their management methods,financial and human resources, and finally totheir underlying values. Since modern technolo-gy plays a significant role in effective and suc-cessful governance, the extent of its use atLatvia’s administrative institutions will also beexamined.

Only through good governance will Latvia beable to attain its human development goals, andin order for this to happen, the operational capac-ity of the country’s policy-making agents will haveto be strengthened in all aspects. Good gover-nance has several specific principles based ondemocratic values (see Information 4.1).

The operational capacity

of Latvia’s central

administrative institutions

The aim of the next four sections is to analyzethe capacity of the State’s central institutions todevelop and implement sustainable humandevelopment policies. This will involve a study ofthe institutions’ leadership capacity, co-opera-tions skills, use of policy expertise and degree ofaccountability (or readiness to answer to the pub-lic in a clear and transparent manner).

Several Latvian and foreign experts have statedthat Latvia’s central administrative institutions donot possess the capacity to ensure the country’sintegration into the European Union. This capacityhas also been deemed insufficient for overcomingthe impediments of the transition period and forforming a modern, law-abiding and autonomousdemocracy. Capacity is tied to decision-making,human resources, infrastructure, and the use ofmodern technology. As pointed out in the EuropeanCommission’s reports of 1999 and 2000 concerningLatvia’s readiness to join the European Union, thecountry’s low ratings in institutional capacity arelinked to the slow pace of administrative reform.

Analytic reports on administrative reform inLatvia often mention various objective reasons forLatvia’s lack of success in raising the operationalcapacity of its policy-making institutions at thenational level:• For historic reasons there is a lack of senior civilservants with extensive experience in open policy-making practices.

C H A P T E R 4

Administrative Capacity in theContext of Human Development

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• Latvia’s rapid transition pace has not permittedthe devotion of much attention to the learningprocess of policy-making. The fact that policy deci-sions sometimes occur “in order to put out fires”leaves little time for evaluating alternatives andinvolving the public in extensive dialogue.• In many instances ministry salaries are too lowto attract and to maintain the extended interest ofcompetent employees, which makes it difficult toensure “institutional memory” in government min-istries. Furthermore, the employee salary systemin State institutions has not yet been reorganized.The European Commission has pointed out thatmanagement contracts are popular both withinand outside of the civil service framework. Whilethese add to the basic salaries of ministryemployees, they also create a split salary system,

promote the development of semiautonomousadministrative institutions, and render control,monitoring and transparency more difficult.• There is a lack of a unified system to attractcapable university graduates.• Foreign experts have mentioned that there arenot enough civil servants in Latvia to implementgood governance effectively.

Latvia’s ministries understand these problemswell. The Ministry of Justice in its 1999 annualreport writes that: “One of the most serious problems hasbeen the change of staff. In 1999, 31 employees left theministry (24% of all employees), while in 1998, 20% of ouremployees left. The frequent change in staff prevents thedevelopment of a unified group of employees and retards theimplementation of a strategic plan for the ministry. Theprincipal reasons for the changes in personnel are the limit-


Inga Goldberga, Director of the Latgale Regional Development Agency

Increased regional awareness and activity

The year 2000 was a turning point in Latvian regional politics. Debates over the most suitable model of regional development for the country took place not only on a regional level, but also at the national level of governance and with the participation of the public, which closely followed the search for a common solution.

Latvia’s regions were particularly active in 2000, taking advantage of favourable decisions passed by the Cabinet of Ministers, as well as the European Union’s Phare programme aimed at supporting Latvia’s National Programme for the Equalization of Social and Economic Development. This regional activity was echoed at the national level. The government and other central institutions supported grassroots initiatives, included regions in the development of the Phare-funded national programme, and found the means to support regional development institutions. These were good examples of how the government and the Saeima can support development efforts outside of the nation’s capital.

A testimony of regional activity can also be found in the cooperation and coordination that takes place within Latvia’s regions in the drafting of regional development strategies, and in the establishment of regional development agencies as implementing institutions. The development of joint projects testifies to the large degree of activity and cooperation that has already taken place.

Although Latgale is the region with Latvia’s lowest economic indicators, it was the first to produce a development plan that complied with all of the European Union’s requirements – the Latgale Regional Development Strategy. All of Latgale’s local governments have agreed to its implementation, as have the region’s politicians under the Latgale Development Council. The Latgale Regional Development Agency has also been established in this regard. Thanks to their ability to clearly formulate their priorities, Latvia’s regions can participate actively in politics on the national level. As a result they are acquiring the opportunity to defend their interests and influence policy-making.

The search for region-to-region cooperation, led by well-educated regional development specialists, has emerged as a new trend. Regional awareness is increasing along with the regions’ political influence, and this will serve to decrease the “brain drain” of talent from the regions over the longer term, increase economic activity, and ensure balanced development across the country.

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C H A P T E R 4

ed career opportunities in the ministry and the highersalary offers in the labour market. This is tied to the low, setsalaries at the ministries and to the delay in developing andimproving this system.”

While higher salaries do help to attract young,well-qualified employees, they do not in them-selves guarantee that the institutions in questionwill be able to formulate policies that serve to pro-mote sustainable human development. Similarly, whileoutside factors and Latvia’s historic backgroundmay partially explain the country’s administrativeshortcomings, they do not provide an excuse forthese shortcomings. In this Chapter we shall exam-ine the strong and weak points of Latvia’s adminis-trative institutions, and establish how to developtheir strengths and minimize their weaknesses inthe formulation of high quality, human develop-ment-oriented public policy.

In search of a strategic

vision

A government must have a strategic vision inorder to work effectively. Namely, it must be able to:• see the total picture of human development;• conduct long-term planning;• feel accountable for its policy results;• bring together the various institutions involvedin policy-making, and coordinate their work to theachievement of common goals.

At present the Latvian government lacks a spe-cific strategic direction. It does not have a “unifiedvision” or an official plan directed to reachinghuman development goals over the next 10 – 15years and supported by all political agents.


Principles of good governance

Participation. All people must have the opportunity and the ability to participate in decision-making processes (either directly or through the mediation of interest groups).

Rule of law. Governance must be based on laws that are just and impartially applied.

Transparency. Decision-making processes must be transparent, and this requires a free flow of information. Decision-making processes, institutions and information must be sufficiently accessible for the population to understand and monitor the public policy process.

Responsiveness. Institutions of governance must respect and take into account the interests of various groups of society.

Consensus. Institutions of governance must act as a mediators among various groups, promoting compromise and the arrival at a consensus.

Equality and social justice. Men, women, and the least protected population groups must have equal opportunities to participate in governance and improve their quality of life. The promotion of social justice is the basic criterion for quality policy-making.

Efficiency. Institutions of governance must try to achieve an optimal cost-benefit relationship in performing their functions.

Accountability. Policy-makers must be accountable to the public that has delegated them power and the right to decision-making.

Strategic vision. Governance must be directed towards both short-term and long-term goals. Human development must be foremost in mind, taking historic, cultural and social factors into account.

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While the government declaration could promote acommon vision for the country’s administrativeinstitutions, it cannot guarantee the institution of acommon national strategy. There are several rea-sons for this.

First, any government declaration is a politicaldocument that applies only while the acting gov-ernment is in power. Thus, its sustainability is farfrom guaranteed. In addition, such declarations aretoo all-encompassing for the Cabinet to overseetheir implementation. They address a great deal ofissues, goals and tasks, of which many are second-and third-level priorities. Furthermore, because thedrafting of government declarations has no directlink to the drafting of State budgets, it is highlyunlikely that the priorities written within such dec-larations can be co-ordinated and implementedeffectively. As a result, government declarationslose their overall significance, and become formaldocuments for whose implementation neither thepoliticians themselves nor the country’s adminis-trative institutions feel entirely responsible.

The present policy-making processes in Latviaalso have other features that indicate the lack of astrategic vision. The Cabinet of Ministers hasapproved almost two hundred programmes andother strategic policy documents (strategies, con-cepts, et al.) that are only rarely co-ordinated.Focused human development cannot be attainedwithout a far-reaching vision. Again, the State bud-get’s detachment from the implementation of theseprogrammes must be mentioned. Although ministryemployees are assigned to work out the many pro-grammes prescribed in any government declara-tion, the allocation of national budget funds is usu-ally not connected with t these programmes, whichconsequently cannot be implemented effectively.

There is no institutionalized government moni-toring mechanism under which the governmentwould have to systematically produce reports onthe fulfilment of its policy programmes and on therealization of its priorities (see also Governmentaccountability later in this Chapter). However, theroots of the problem lie deeper within the policy-making process itself, where the country’s politicalleaders are unable to agree upon long-term humandevelopment goals. This problem is reflected inthe continuing inability to arrive at a NationalDevelopment Plan, which is meant to be a medium-term development programme connected withLatvia’s plans to join the European Union (seeInformation 4.2).

Politicians have a limited understanding ofhuman development as an integrated develop-ment process and as a complex policy goal. Forexample, in order to distribute the country’sresources more equally among the population andincrease the general level of prosperity (which isone of Latvia’s main human development assign-ments), social factors should be considered alongwith macroeconomic factors in planning the Statebudget. Worldwide experience shows that econom-ic growth alone cannot guarantee human develop-ment. Human development is based on social jus-tice, equality and participation. Latvia’s policymakers should be thinking more in the long term,and should plan budget resources for projects andprogrammes that will provide a long-term invest-ment in the development of the entire country. Thisentails both a rational allocation of budget funds,and accountability for the spending of publicresources.

As long as Latvia does not have a single, com-mon vision about its long-term development prior-ities, it will also lack consistent priority policies.Furthermore, as long as Latvia’s budget-plannersdo not place priority on sustainable human devel-opment, there is no basis to believe that any prior-ity policies will be effectively realized.

Finally, it is worth noting that any vision of thecountry’s development strategy must encompassnot only goals and priorities, but also the basicvalues that guide the government. The govern-ment must first identify its basic values in orderfor the public to understand what to expect of it,and it is not sufficient for government employeesthemselves to be aware of these values. Thesemust be stated clearly and publicly. As the politi-cal analyst William Dunn writes, the policy-makingprocess is actually a form of practical ethics, sincethe process of granting preference to a particularpolicy is not only a “technical” decision, but also amoral choice.

More attention must be paid in Latvia to theethical principles of policy-making. The assuranceof sustainable human development is closelylinked to such ethical principles as, for example,equality and participation, as well as accountability(see the analysis in Chapter 1). Therefore, politi-cians, civil servants and the “community of politicalmovers” must gain a better understanding of thebasic principles of human development. This canbe achieved to a great extent by attracting qualifiedpolicy expertise.

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C H A P T E R 4

Co-operation and

co-ordination

The formulation of open, human development-oriented policies is often hindered by the lack of hor-izontal co-operation between a country’s administra-tive structures. Integrated and co-ordinatedmulti-sectoral policies are just as important or evenmore important than single sector policies from the

human development perspective. In multi-sectoralpolicies priority is given to social justice, the rationalbalance of economic growth and the transparent allo-cation of resources, which can only be achievedthrough co-operative efforts. In view of the prerequi-sites for sustainable human development and the pri-orities connected with them (social integration,poverty reduction, gender equality, regional develop-ment, environmental protection and the rational useof resources), it is obvious that these issues cannot beresolved by one single department or ministry.


The National Development Plan – an attempt to create a strategic visionfor the country

In March of 2000 the Cabinet approved the preparation of a National Development Plan (NDP) that would reflect the development directions expressed in other strategic planning documents, and that would conform to the requirements of the European Commission. The Cabinet determined that the NDP should be a mid-term planning document for the next six years. It should analyze Latvia’s socio-economic situation, assign development priorities and stipulate the steps to be taken to realize these priorities.

A management group formed by high-ranking ministry employees is politically accountable for preparing the NDP. This includes approving the NDP’s preparation methodology, work plan, and programme priorities. A so-called “unity group” consisting of specially selected ministry employees is responsible for the NDP’s day-to-day preparation work. The experts who have been hired to write up the NDP must also consult with this “unity group.”

To those involved, the preparation of the NDP has been a significant learning process. Up until now there had been no attempts to work out a similar plan in Latvia, which means that there is no previous experience to rely on in implementing the project.

Several problems have already arisen in the preparation of the NDP. The project management structure does not promote a feeling of responsibility for the end result. Although the Secretariat of the Minister of Special Assignments for Co-operation with International Financial Institutions is managing and co-ordinating the preparation of the NDP, the management and co-ordination structure remains very fragmented. There is no politically neutral institution capable of simultaneously leading this process and putting aside ministry-level interests in favour of a “common cause” and human development priorities. There is also no higher-level political pressure to induce the maximally effective preparation of the NDP as a document supported by the entire government. Currently no one feels particularly responsible for the NDP as a whole, and the quality of the work put in is suffering as a result.

Those working on the preparation of the plan cite the lack of a long-term development strategy as a major impediment. At present there is no agreement on the direction of Latvia’s development over the next ten to twenty years, and this is delaying effective medium-term planning as well. The State budget planning process remains entirely separate from the NDP planning process. Several people involved in the preparation of the NDP have stressed that there is little sense in speculating about Latvia’s mid-term political priorities if specific budget funds are not allocated for the realization of the NDP.A positive element is that steps are now being taken to unite both processes.

It is significant that the NDP is being developed independently, and that it is not controlled by the European Union or influenced by outside forces. While the Latvian government has generally been able to fulfil activities entrusted from outside in an efficient manner, it must still learn to assume internal commitments and to fulfil them in a co-operative manner for the good of the entire country.

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Research indicates that poor inter-departmentalco-operation in Latvia’s administrative institutionsis hindering the realization of the country’s humandevelopment priorities. Although there are severalsuccessful examples of inter-ministry co-operation(such as in rural policy and Euro-integration), civilservants still place the interests of their own min-istry above all others, and lack the required deter-mination to co-ordinate their efforts in realizing acommon policy. This problem is not unique toLatvia, but afflicts all democratic countries to a larg-er or smaller extent. “Competition” between min-istries is not a universally negative phenomenon, asit may also be a motivating factor and give rise toinnovations. On the negative side, competition canlead to contradictions in State policy. The imple-mentation, monitoring and evaluation of plannedpolicies and programmes may become practicallyimpossible due to the existence of conflicting goals,tasks and activities. Latvia’s administrative institu-tions must seek to establish a greater balancebetween healthy and unhealthy competition.

Latvia’s policy makers themselves have discov-ered the negative consequences of insufficient co-operation between the government’s ministries.Surveyed ministry department directors men-tioned the lack of inter-departmental co-ordinationas one of the largest obstacles to high quality poli-cy-making. Ineffective co-operation is also cited asdelaying the development of specific policy pro-grammes. This has occurred in cases requiring theco-operation of all or nearly all of the government’sministries (such as the formulation of the NationalDevelopment Plan), or in the establishment of pro-grammes requiring the co-operation of two or threeministries (such as a complex plan for reducingpoverty, the assessment of regional developmentand the introduction of health studies in schools).An increasing number of ministry employees arerealizing the need for strengthening inter-depart-mental co-operation, yet statements referring tothe negative effects of a lack of co-operation remainmostly at the rhetorical level, and the situation isimproving only marginally. Therefore, particularattention must be paid to those factors that areimpeding increased co-operation, and to solutionsthat might serve to improve it (see Table 4.1).

As previously mentioned, the insufficientdegree of policy coordination is linked to theabsence of a strategic vision of the country’s future,and to the weak link between national budget andpolicy planning. As long as the budget and policy

planning processes remain separate and distinct,each ministry will focus on protecting its own inter-ests, rather than on implementing the interests ofthe country as a whole. In the absence of a commonframework programme with fixed development pri-orities, the principal mechanism for influencing thebudget’s hidden planning processes is each minis-ters’ self-seeking protection of his or her ministry’sinterests and priority programmes (a rather com-mon phenomenon in many countries). Co-opera-tion with other ministries is deemed to be of sec-ondary importance, as is the joint resolution ofproblems not figuring high on each ministry’s prior-ity list and which would require the “dilution” ofalready limited human resources. Each ministryattempts to “pull the blanket to its side” and toavoid extra duties. Party rivalry within the coalitionitself is also hindering effective horizontal co-oper-ation. Individual ministries are frequently underthe control of one party or another. Each party isinclined to protect the interests of “its own” min-istry at the expense of cooperation with others. Forexample, the Ministry of Welfare has traditionally“belonged” to Fatherland and Freedom/LNNK, whilethe Ministry of Foreign Affairs has for years beenthe domain of Latvia’s Way. The Ministry of Agricul-ture, for its part, is controlled by the People’s Party.The coalition government continues to operate forbetter or for worse, as its ministries vie with eachother in the competition for resources.

Other factors also serve to hinder inter-ministryor inter-departmental collaboration. Again, the slowpace of administrative reform must be mentioned.The European Commission’s report on Latvia’sreadiness to accede to the EU stresses that contin-ued delays in the reform of the country’s publicadministration system have weakened policy co-ordination and the ability of Latvia’s administrativeinstitutions to adopt EU legislation. One must alsomention the underdeveloped policy-making culturein Latvia, where emphasis is placed on “formal andofficial co-ordination” and the avoidance of legalcontradictions in policy making. Practical co-ordina-tion aimed at ensuring optimal policy planningresults for the population occurs rarely. Further-more, policy-making is based more on the country’slegislative framework than on consultations andresearch (see the next section of this Chapter).

While there are several positive examples ofhorizontal co-operation, these are exceptions thathave been induced by such outside factors as Euro-integration (see Information 4.3). The strengthening

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C H A P T E R 4

of inter-ministry and inter-departmental co-opera-tion is not “a question of time,” but must be active-ly promoted without further delay.

In individual cases interdepartmental policy co-ordination mechanisms have been developedregarding such issues as integration, poverty reduc-tion, rural development, and the formation of unof-ficial working groups. However, the results and

effectiveness of these mechanisms have suffereddue to the aforementioned negative conditions. Ayear ago there still was no neutral institutionresponsible for inter-departmental policy co-ordi-nation. Such an institution must be politically neu-tral, yet have the power and authority to achievemost of the practical work required for inter-depart-mental co-ordination. It should also support the

Manifestations

• The development, implementation, supervision, and evaluation of concrete policies is not co-ordinated. This often gives rise to conflicting goals, tasks, and policies.

• The development of specific policy programmes is hindered by a lack of co-ordination and collaboration between ministries.

• In the competition for limited resources, each ministry’s priority is to protect its own interests. Common national interests are secondary.

• In the allocation of the State budget, each minister aggressively protects the interests of his or her sector and fights for the accordance of priority to his or her programmes.

• Ministries “pull the blanket to their side” and avoid the extra responsibilities entailed by co-operation.

Factors

• The civil servants involved work mostly within one single ministry, and not within a united civil service. Therefore, there is no strong commitment to work for the sake of a co-ordinated, harmonized policy.

• There is no strategic State vision for the consolidation of executive policies.

• The national budget’s planning process is separate from policy-making processes.

• Individual ministries are frequently under the influence of one party. As a result, parties tend to protect the interests of “their” ministry instead of co-operating with others.

• Ministries will continue to compete with each other for as long as coalition governments remain in power.

• The reform of the State administration has been slow and is still not completed.

• Emphasis is placed on “formal and official co-ordination,” but real co-ordination ensuring optimal policy results occurs rarely.

Solutions

• A common development priority programme and plan must be worked out.

• The government’s ability to manage and oversee the implementation of an overall strategic vision and National Development Plan must be increased. This would strengthen the policy “centre” in Latvia.

• Policy-making must be based not only on the country’s legislative framework, but also on policy analysis, research and consultations.

• Policy makers should learn from successful inter-ministry and inter-departmental examples of co-ordination (such as Euro-integration), and should adopt successful co-ordination and co-operation mechanisms.

• Policy makers should ensure greater co-ordination and co-operation between regional institutions of governance under ministry control.

• The newly created Policy Co-ordinating Department of the State Chancellery must become an effective inter-departmental policy co-ordinator.

T a b l e 4 . 1

Manifestations of weak policy co-ordination. Factors and solutions

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government’s leadership by ensuring and oversee-ing the execution of the national strategic visionand plan. Some experts see this as the necessity tostrengthen the “policy centre.”

The first steps towards creating such a policy co-ordination institution have already been made. Inthe summer of 2000 the State Chancellery ‘s PolicyCo-ordination Department was created (see Infor-mation 4.4). It is hoped that the new department willbe able to mend some major holes in the policy-making process. One significant accomplishmentwould be the co-ordination of the budget planningprocess and fiscal policy with other priority policies.

The public administration’s

content capacity, or ability

to use policy expertise

In public administration the ability to delegateindividual tasks to others is of prime importance.Delegation ensures more effective results, as policyplanners cannot be experts in all of the fields forwhich they might be responsible. If the chief role ofpolicy makers (especially at the department direc-


Euro-integration – an example of positive horizontal co-operation

Policy planners questioned within the framework of research for this Report often mentioned Euro-integration as a positive example of horizontal co-operation. Euro-integration is one of the rare policy areas where all of the ministries have managed to agree.

Since strengthening inter-departmental co-operation within the Latvian administrative apparatus is of prime importance, it would be useful to establish what factors have made co-operation effective in the field of Euro-integration. Analysis indicates that the main factors for effective co-operation have been the following:• The institutional mechanisms of Euro-integration ensure the continuity of decisions. Political responsibility is entrusted to European Integration Council (EIC), which is composed of several government ministers. (It could almost be called “the second government,” because all ministries are represented except for the Ministry of Defence.) This Council has defined Euro-integration as a policy priority. The “executive power,’’ in the form of the Senior Personnel Committee, is a professionally able and responsible unit that ensures the execution of priorities at the ministry level. The balance of political and executive power is an essential requirement for policy co-ordination and effectiveness.• Strong management. The Prime Minister, as the highest figure in the executive, has been a strong and focused leader regarding Euro-integration. He has used his influence to ensure that the highest-ranking members of the government work towards one common goal.• Principle of unanimity. The principle of unanimity or consensus rules within the Senior Personnel Committee. This means that all members must agree on decisions, and that in the case of disagreement the issue in question must be referred to the European Integration Council. The principle of unanimity strongly stimulates the search for compromises and the need to work together. It is also one of the basic principles of good governance.• Co-ordination. The Euro-integration process is co-ordinated by a politically and professionally neutral State institution, the European Integration Bureau, which oversees the unified picture of Euro-integration and does not compete with ministries.• International regulation. The rules of the Euro-integration process are to a large extent dictated by outside agents, and therefore the government does not have to agree or disagree about the main parameters of the integration process.• Perspectives for civil servants. Euro-integration is a political orientation and value that unifies ministry civil servants. In addition, policy-making in a broader context – between Riga and Brussels – offers tempting career opportunities for young civil servants.• Urgency. Euro-integration is an urgent priority. The government cannot afford to be uncooperative.

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tor level) is to be competent administrators, then itis necessary for them to seek the advice of otherpolicy experts. Although highly professional policymakers are extremely knowledgeable about thespheres that fall under their competence, theyoften require assistance in researching and analyz-ing a given situation in depth. This involves prepar-ing concrete policy solutions and writing up broad-ranging predictions that would evaluate not onlythe short-term financial costs and expected resultsof these solutions, but also incorporate such humandevelopment factors as social justice and genderequality, environmental protection, and povertyreduction.

Countries with entrenched democratic tradi-tions entrust the preparation of source informationand problem-solving to experts from both Stateinstitutions and independent policy analysis insti-tutes (see Information 4.5).

In Latvia there are three principal means andmechanisms at the central level of governance forattracting non-government policy expertise:• unofficial consultations with experts and NGOs,

• official consultations with local and internation-al experts through the use of donor funding,• and the assignment of government researchcontracts to Latvian experts within the framework ofResearch Projects Commissioned by State AdministrativeInstitutions, for which the State annually providesresources.

Independent expertise provides policy plan-ning with an analytic and a scientific foundation.Given the opportunity, experts can produce infor-mation that makes it easier for policy makers tounderstand the total picture through the analysis ofone particular policy issue in the context of others.In addition, independent expertise improves thequality of the policy-making process by assuringobjectivity. It is also a link or a “bridge” betweenthe policy-making processes and the public.

An analysis of the policy-making processes inLatvia reveals that policy expertise is used official-ly only in rare cases. A survey of ministry depart-ment officials during the preparation of this Reportconfirmed this. Approximately 60% of surveyeddepartment directors said that they frequently, or


The creation of the State Chancellery’s Policy Co-ordination Department – a step towards ministry co-operation and integrated policies.

Realizing that the government’s policy-making and administration processes lack horizontal co-ordination, the Cabinet created a new Policy Co-ordination Department under the State Chancellery in the fall of 2000.

The planned functions of the department include:• Co-ordinating suggestions for national development goals, setting priorities and formulating policy;• Creating and co-ordinating a united national development planning and result-forecasting system;• Co-ordinating the development, realization and completion of the inter-ministry activity plan regarding the Government Declaration on the Work of the Cabinet of Ministers;• Evaluating draft laws and regulations submitted to the Cabinet and to the Prime Minister (if necessary from the policy co-ordination aspect), and submitting reports on these documents if required;• Analyzing how State institutions are faring in policy making and implementation, and providing suggestions for improvement if required;• Organizing co-operation with local and foreign institutions, within the limits of its competence;• Analyzing individual problems and offering suggestions for solutions at the request of the Prime Minister.

It is too early to tell how effectively this newly created institution will function, but some positive signs are already visible. For example, in the autumn of 2000 the Department analyzed how State decisions are adopted and how policies are developed and implemented in Latvia. In co-operation with the Soros Foundation – Latvia, the Department has also begun a review and evaluation of policy research commissioned by the State. It is hoped that such a “systems analysis” will become a basis for strengthening the policy development process and horizontal co-operation.

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almost always, make use of unofficial consultationswith experts and NGOs. But most directors saidthat they rarely or “practically never” officiallyinvolve independent experts in commissioningresearch for policy planning. As described in Chap-ter 2 of this Report, decision-makers use unofficial,“quick” consultations much more often than com-

missioned expert research. Even though unofficialconsultations do contribute to policy develop-ment, they do not contribute to transparency andpublic accountability. Written suggestions in theform of officially requested expert solutions pro-vide a transparent basis for the evaluation of anoffered policy solution. They can be objectively


What is policy analysis?

Definition.Policy analysis seeks to:

• a) explain a policy problem, b) analyze possible solutions to the problem (examining the consequences of various activity options, including the financial, social and other costs), c) offer a solution that will improve the situation, based on the obtained conclusions and forecasts d) evaluate the consequences of an already implemented policy.• the result of the analysis is a policy analysis document.

Policy analysis criteria. In working out a policy, decision-makers must ensure that the chosen solution is the right one, or the best of several proposals. An open policy system requires the offered solutions to be evaluated by objective criteria. This not only makes it easier for politicians to make decisions, but also makes their decisions more easily explainable and transparent to the public. Impartial policy choice criteria are the basis for transparency. Transparency, in turn, is the basis for open policy. Policy analysis is the instrument that provides the opportunity to implement policy choice criteria and to make the correct decisions.

Usually the suitability of offered policy solutions is determined by the following criteria:• Effectiveness – to what extent will the solution solve the identified problem?• Political viability – does the solution conform to the decision-makers’ strategic vision?• Feasibility – are there enough resources available (human, systems, financial)?• Efficiency – what is the relationship between the benefits and the costs?• Justice – have the situation and needs of the vulnerable segments of society been considered? Will the gap between the affluent and the needy increase? Will men and women equally benefit from the offered solution? Will the solution have a sustainable effect?

The methodology of policy analysis. Policy analysis specialist William Dunn writes that policy analysis can be effective only if it has a good methodology. During the last 50 years, the practice of policy analysis has evolved considerably and has become more complex, but there is a methodological nucleus on which experts agree. This nucleus is described as the critical diversity principle.

The critical diversity principle requires the synthetic unification of several methods and points of view. Its precepts include:• using several research methods,• attracting experts from several fields and academic disciplines,• using several criteria and indicators for the evaluation of a situation,• analyzing information from several sources and using several models in forecasting results.

The diversity of methods in policy analysis helps to ensure a certain objectivity and quality. Analysing a problem from various points of view reduces the possibility that the basis of a solution will be a faulty analysis or prejudiced theoretical assumption.

In Latvia, policy analysis processes must still be developed further in order for critical diversity principles to be fully observed. The strengthening and wider use of policy analysis in the country is one of the most significant prerequisites for policy improvement.

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discussed and evaluated by the populationaccording to objective criteria. Unofficial consulta-tions do not provide such opportunities for publicdiscussion.

Policy analysis research

financed by the State

budget

Official policy expertise can be divided into twocategories: expertise and research financed by for-eign donors, and expertise and research financedfrom the State budget. Expertise from the first cat-egory is more difficult to analyze, because there isno systematic information about what research hasbeen requested, who has financed it and what theresults have been. In addition, the goals of theexpertise conducted under the fist category are notalways set by Latvian policy makers.

However, an analysis of the second category ofexpertise (that is, State-financed policy analysisresearch and its results) reveals several problems.The analysis presented below refers to specificresearch procured with science budget resourcesand regulated by Cabinet Regulation No. 77 On theFinancing and Evaluation of Research Commissioned byState Administrative Institutions. While research com-missioning and budget planning for this kind ofresearch is co-ordinated by the Ministry of Educa-tion and Science, each ministry has a separate co-ordinator who is responsible for administering theresearch process in his or her ministry. These arethe only State resources available to governmentministries for financing policy analysis research.

The following picture is revealed in analyzingover 300 studies commissioned by Latvian Stateadministrative institutions in 1998 and 1999.

Link with policy analysis. Only about half of theresearch commissioned by government ministriesdeals with policy analysis. The rest deals with thepreparation of teaching materials and other issues(history research, public relations materials, bookprinting, computer programme development, etal.). Research financing regulations do not specifythat research must be related to policy analysis andthat requested funds must be directed to scientificresearch. Nevertheless, many research studies notclassifiable as policy analysis have been quite use-ful and well executed. Cabinet regulations state

that research “may be, for example, a study courseproject.” The question does arise, however, of howrationally the resources meant for research havebeen used.

The level of policy analysis. Very little policy analysisresearch has actually been conducted even amongthose research cases categorized as “policy analy-sis.” While frequently a situation is described andanalyzed, and general recommendations and con-clusions are provided, only 5% of all studies offer acomprehensive forecast of policy consequences,model possible solutions, and give recommenda-tions based on the study’s forecasts. In the socialpolicy area such in-depth research on the use ofState funding has never been commissioned. Whilethis could be due to the limited availability ofresources for research (see below), the fact remainsthat most of the research conducted in this area hasnot provided a maximum contribution to the policyanalysis and planning processes.

The reasons for this trend lie rooted in bothobjective and subjective factors:• In Latvia there is no policy-making traditionrequiring the execution of objective, high-qualitypolicy analyses. Such analyses should demonstratethat the offered policy solutions are the best out ofseveral options. Policy analysis is not a precondi-tion for the Cabinet’s approval of a policy, and suchresearch is not viewed as an indispensable part ofthe policy-making process.• Policy makers themselves do not always havethe ability to commission high-quality policy analy-sis studies. In order to expect good results, moreattention must be given to the formulation of prac-tical policy research questions and assignments.• State budget resources for policy analysisresearch are limited. Usually less than 5000 lats aregranted per research study. Although high qualityresearch can also be effected with relatively littlefunding, the overall lack of resources hinders thecommission of deeper analyses and the applicationof the “critical diversity principle.” In any case, themost rational division of the scarce resources avail-able and choice of research priorities should be atthe forefront of government research planning.• The fact that ministries submit their practicalresearch projects individually results in inter-min-istry competition and does not promote much-needed multi-sectoral research. Consequently,there is a lack of State-funded research projectsanalyzing issues of national importance from amulti-sectoral aspect.

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• There are several contradictions in the Cabinetregulations concerning the use of researchresources, particularly in regard to research goals.

Experts from the Latvian Academy of Sciencesassigned to evaluate research submissions oftenare not policy analysis specialists. Frequently theystress the importance of academic research ratherthan policy analysis. Furthermore, ministry employ-ees do not always organize research competitions,and sometimes assign research studies to “trust-worthy“ scientists and practitioners who may not bepolicy analysis experts.• Latvia’s administrative institutions are not per-mitted to hire foreign experts in State-fundedresearch. While this is dictated by the legitimatedesire to promote Latvian expert capabilities andto support local analysts, there has been no con-sideration of the fact that Latvian experts workingtogether with experts from other countries wouldincrease their own qualifications more rapidly.Latvian experts would learn more about themethodology of modern policy analysis, and ben-efit greatly from co-operation with the internation-al policy analysis community. This is borne out bythe fact that past research financed by foreigninstitutions and featuring joint research by Latvianand foreign experts is generally of a higher leveland quality.

Independent policy analysis

in Latvia

As mentioned earlier in this Report, independ-ent experts play an essential role in the policy-mak-ing processes. In Latvia, policy expertise is obtainedmost frequently on the individual level throughindividual consultants. In other countries policyresearch is entrusted to independent policy insti-tutes, or think tanks. Both individual experts and pol-icy institutes play an important role in the diversepolicy analysis community (see Information 4.6).

Several experts have concluded that the level ofpolicy analysis in Latvia is fairly low, although thereare some exceptions. This is a problem not only inLatvia, but also in other Central and Eastern Euro-pean countries, as there are several common fac-tors that hinder policy analysis in this region, suchas the weakness of the NGO sector and the ratherwidespread public mistrust of policy-makingprocesses.

However, another element that significantlydetermines the quality of policy analysis is thecapability of policy researchers. When asked to out-line the principal problems inhibiting the develop-ment of high quality policy-making in Latvia, policymakers mentioned the shortage of independentexperts (along with the inefficiency of availableexpertise), directly after the limited availability offinances and the lack of co-operation among differ-ent ministry departments. According to one min-istry department director, Latvia lacks “a scientificresearch institute that could study the develop-ment of the national economy on a high, profes-sional level.”

Research conducted in 1999 shows that severalorganizations in Latvia partly fulfil the role of policyinstitutes or think tanks. These can be divided intothree categories: academic institutes, NGOs thatexamine specific issues, and sociological and mar-keting research firms. The most serious in-depthanalyses and recommendations have been con-ducted by public interest organizations with specif-ic issues in mind, as well as academic researchgroups and project teams, which consist of individ-uals hired to conduct joint research on one issue oranother. Sociological research firms and academicinstitutes have conducted the most reliable datacollection and classification. While several organi-zations have worked productively with ministrystaff and other policy makers, there are no real pol-icy institutes and think tanks in Latvia. Policy insti-tutes, of course, are not the only solution, as indi-vidual experts also can be hired to assure ananalytic base for high quality decision-making.However, as several ministry employees haveadmitted, finding qualified individual experts is notalways easy.

This deficiency can be partly attributed toresearch traditions inherited from the Soviet era. Inseveral fields, such as chemistry and physics, Lat-vian researchers educated in the Soviet system areof world calibre. However, these achievements donot apply to quality policy analysis and interdisci-plinary research, where Latvia lacks the necessaryexpertise (for a more detailed analysis about thesituation in the sciences see the 1999 Report). Ingeneral, there has not been much scientific activityin the social sciences, which generate the necessarymilieu for political analysis. Furthermore, there areno policy analysis programmes at Latvia’s universi-ties. While several universities do offer a HumanDevelopment course, this is not sufficient to pro-

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What is an independent policy institute?

In European countries, independent institutions that work in the field of policy analysis usually are called policy institutes, while in the United States the term think tank is also widespread. The term think tank originated in the United States during the Second World War and designated places for military policy experts to work out military strategy. During the 1960s the meaning of this term widened to include designated expert groups or institutions working on concrete policy analyses and recommendations.

While all experts and analysts do not agree on the definitions of policy institute and think tank, most of them agree that such institutes must be:

objective – Studies must be based on research and scientific analysis methodologies, rather than on ideological viewpoints.

professional and competent – In order to maintain its trustworthiness, a policy institute must be able to analyze a situation professionally and in depth. It must use its analysis to develop policy solutions and predict the efficiency of each solution, not only from the financial point of view, but also from the perspective of social justice, gender equality, environmental protection and other factors essential for sustainable human development.

independent – Policy analysis must not be subordinate to political parties or other interest groups, including business groupings.

Policy analysis institutes must also:endeavour to promote and strengthen the entire policy-making process – Although policy institutes play

an important role in working out and popularizing policy alternatives, this is only one part of the process of policy analysis. This process also involves the formulation of questions and problems, the evaluation of policy, the promotion of dialogue and other activities.

be capable of influencing the policy-making process – The work of a policy institute cannot be isolated or removed from policy-making processes, because a policy analysis has little significance if it is not considered by policy makers.

be capable of influencing public opinion – A policy institute must have a good reputation among the media, and must be recognized as a trustworthy authority by the public.

Besides offering qualified policy expertise, the ideal policy institute should also build bridges between the public and policy makers. A policy institute can play an important role as a policy mover by strengthening contacts and links between politicians and public interest groups, and by promoting the growth of the policy-making community. The illustrations below show the ideal role of policy institutes in narrowing the gap between the public and politicians.

The public is frequently removed from policy-making processes.

If a policy institute represents only its own interests,then it has no influence on the public or onpolicy-making processes.

If a policy institute restricts its activities tostrengthening dialogue on policy issues in society,or to consulting only with policy makers,then it fulfils only half of its basic role.

A good policy institute must build a bridge betweencivil society and policy-making processes by offering qualitypolicy solutions and by promoting political dialogue in society.

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duce “a critical mass” of qualified policy analysisspecialists. As a result, there is very little competi-tion among Latvia’s highest quality researchers.

An analysis of all of these factors together showsthat the resolution of this problem must beapproached from two facets, one of which concernsLatvia’s State institutions themselves, where cur-rently there is little demand for independent, high-quality policy analysis. The few State employeeswho request such analyses sometimes lack thecapability to attract the necessary expertise, andtherefore policy analysts do not receive much stim-ulus to improve the quality of their work.

The other facet concerns independent policyanalysis itself, where the situation is no better.Although there are some exceptions, independentpolicy analysis conducted in Latvia is generally notconcrete enough, of inferior quality, and cannot beapplied practically. Therefore, the demand for suchanalyses is not growing, nor is there any meaningfuldevelopment in those areas where analyses of thistype would be required. To improve the situation,the developmental potential of policy analysis willhave to be promoted in both directions.

Lately some positive tendencies haveappeared, and there have been signs of growthopportunities. A number of independent policyanalysis expert groups are now developing andorganizing themselves “from below.” In 1999 and2000 several academic institutions and social scien-tist groups began to look for the means to developas policy institutes. Some have already found co-operation partners to strengthen their role as poten-tial think tanks. This institutionalizing process hascontinued in 2001. These new policy institutes arebeginning to implement both research and practicalprojects geared to promoting public participation.

The Soros Foundation – Latvia (SFL) has playedan important role in strengthening policy analysisactivities and the development of policy institutes.Since 1999 it has implemented a complex pro-gramme designed to raise the quality and promotethe growth of policy analysis. Its activities include anumber of research studies, support for policyanalysis research in the Foundation’s priorityspheres, and the organization of seminars or teach-ing sessions for policy analysis researchers. In thesummer of 2000 the Foundation organized a PolicyAnalysis Forum, in which the Prime Minister andother high-ranking officials and leading researchersparticipated. In January of 2001 seven young policyanalysis students began a one-year programme of

policy analysis research and study, and have beenassigned to five developing policy institutes.

To render research results more widely accessi-ble and to promote an exchange of informationamong policy analysts, the SFL opened a new Inter-net access portal on policy analysis in the summerof 2001. The SFL, in collaboration with the OpenSociety Institute, granted over 127,000 USD in 1999and over 231,000 USD in 2000 to the Local Govern-ment and Public Service Reform Initiative, and tothe Constitutional and Legal Policy Institute for thedevelopment of public policy analysis. In addition,the SFL granted 36,000 USD in 2000 for the initiationof an Education Policy Development Programme.

The fact that Latvian decision-makers andpoliticians place considerable trust in professionalexperts may boost the potential role of future poli-cy analysis experts. More than 80% of questionedSaeima deputies said that they trust professionalexperts “to a large extent” or “to a fairly largeextent,” although many deputies admitted thatexperts have little influence on decisions affectingimportant political issues. This indicates that therole of competent experts in Latvia’s policy-makingprocesses must be increased in a systematic man-ner by developing and strengthening policy insti-tutes, and by developing mechanisms for involvingconsultative experts in the planning, implementa-tion and evaluation of policy.

Government accountability

One of the most fundamental principles of goodgovernance is accountability, or the readiness, thedesire and capacity of State officials to report in atransparent manner about what they have (or havenot) done, and to answer to the public for theiractions.

In the context of open policy-making, reports onState administrative activities are a particularly sig-nificant link between the public and the country’spolicy makers. The people have the right to knowfor what purposes State funding has been allocat-ed, as well as the criteria by which financialresources have been disbursed. It is the State’sobligation to make this information easily accessi-ble and understandable to the public, and to beaccountable for it.

During the last few years, the government ofLatvia has taken significant steps towards theestablishment of greater transparency in this

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regard. From a legislative perspective, the most sig-nificant event was the adoption of the Freedom ofInformation Law in 1998. Although this law guaranteesthe right to information from State institutions,Latvia’s institutions of governance must work proac-tively to ensure transparency in the use of financialresources, as well as in policy implementation andevaluation. A positive step in this direction is the1998 Cabinet resolution under which ministry annu-al reports must be made public. In addition, allCabinet meeting protocols and resolutions are nowelectronically accessible at www.mk.gov.lv.

While the public can now access informationthrough the Internet on adopted State policies andread the texts of various programmes, it still faceshurdles in obtaining information on the implemen-tation of policies and specific budget expenditures.For example, although almost all ministries publi-cize their budgets in their annual reports, the figuresare mostly presented in such a general manner thatthey do not reveal a great deal. The budgets of spe-cific programmes, for example, are not listed. TheMinistry of Justice has been an exception in thisregard. In its 1999 report, the ministry listed howmuch was spent on each of its programmes and howmany of the planned activities were implemented. Ifall ministries presented such information to thepublic in a clearer manner, then resource spendingwould become more transparent and public partici-pation in dialogue about policy developmentprocesses and priorities would become more active.

While the number of Internet users in Latvia isgrowing, “normal people” wishing to acquire infor-mation by telephone or in person on the distributionof their tax money may not find this to be an easytask. Ministry home pages on the Internet are by farthe most accessible route for obtaining informationand for expressing suggestions or complaints.

To establish how much and what kind of infor-mation about ministry activities is available to thepublic on the Internet, each ministry’s home pagewas evaluated for this Report according to the fol-lowing criteria:• Annual reports about ministry activities – Arethese available in the home page?• Ministry budgets – Are they published and isthe information clearly presented?• The laws and policies of each department – Arethe laws and policy documents regulating thedepartment’s activities available in the home page?Are there explanations and information about policyimplementation, and how complete are they?

• Ministry commissioned research – Is there anyinformation about research studies, their budgets,and the research teams consulted? Is the informa-tion limited to brief research annotations or arecomplete research reports included?• Interactive opportunities – Is contact informa-tion listed in the ministry’s home page, and areother interactive opportunities offered?• Other aspects – Has the ministry taken advan-tage of technological opportunities in the creationof its home page? Are other participation or trans-parency opportunities offered?

Each ministry’s home page was evaluatedaccording to these six criteria and could receive amaximum of 60 points. The results in Table 4.2indicate that some ministries, such as the Ministryof Welfare, Ministry of Environmental Protectionand Regional Development, and Ministry ofDefence, have created their home pages skilfullyas a form of public accountability for their policies.Other ministries, however, have not made full usethe latest technology to ensure greater publicaccountability.

Several home pages made use of innovativeideas and provided good examples of how infor-mation technology can be used to create a bridgebetween policy makers and the public. The Min-istry of Welfare, for example, offers a “chat” featurethat permits correspondence with high-standingministry officials about current social policythemes (www.sarunas.lm.gov.lv). Although the “chat-ting” on each subject is for a limited time period,all Internet users may continue to read noticeexchanges and send in their comments even afterthe advertised discussion has ended.

The examination of issues that are vital tosocial policy from the viewpoint of ordinary peo-ple is a welcome new feature. For example, in thefall of 2000 the following themes were offered fordiscussion:• Women and employment opportunities• HIV/AIDS – Does it affect you or not?• Why should youth be concerned about theirpensions?• Who is responsible for contraception?• Is a poverty reduction strategy necessary andwhat would it achieve?

Through the use of information technology, theMinistry of Welfare has found a way to establish acloser link between the State’s policy-makingprocesses and the daily life of the people. Con-sidering that one can read a wide variety of opin-

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ions in the chat archives – starting with those ofthe minister, higher officials and departmentexperts, and ending with youth, students and pen-sioners – it appears that the chat feature promotesthe accountability of public policy, as well astransparency and public participation.

Much still remains to be done in order toensure the transparency and accountability ofLatvia’s administrative institutions, but informa-tion technology has already opened new opportu-nities that should be used by all of the govern-ment’s ministries.

The public administration

capacity of local

(or municipal) governments

Local governments play a significant role in theimplementation of human development policy.This role can be examined from two aspects, thefirst of which concerns public participation inadministrative decision-making on local-levelissues. The opportunity and the necessity for peo-ple to participate in the resolution of public issuesand the development of their community is evenmore pronounced at the local level than at thenational level. For many people, local govern-

ments represent the closest, the most familiar andthe most understandable level of administration.The system of relations between individuals andtheir local government must induce public partici-pation in the resolution of issues that concern notonly individuals and their families, but also theirlocal communities.

A beneficial precondition for participation atthe local level is the fact that the public trustslocal governments more than the country’s centraladministrative institutions. Research studies con-ducted by social survey companies testify thattrust in local governments is more pronounced inthe countryside and in small urban centres than inRiga and other big cities. According to a surveyconducted in the year 2000, over half (54%) ofLatvia’s rural residents trust their local govern-ment, compared to only slightly more than a quar-ter (28%) of people living in Riga. In Riga a greaterproportion of respondents chose to answer “Idon’t know,” which indicates that the relationshipin Riga between the municipality and the individ-ual is much more formal and distanced than it is inLatvia’s rural areas and other cities.

Local governments implement a whole string ofimportant functions that concern the economicdevelopment of the territory they administer andthe quality of life of those living within it. They areresponsible for health care, social welfare, educa-tion, public transportation services, the upkeep

Home page address

www.lm.gov.lvwww.varam.gov.lvwww.mod.lvwww.fm.gov.lvwww.mfa.gov.lvwww.lem.gov.lvwww.zm.gov.lvwww.jm.gov.lvwww.izm.gov.lvwww.km.gov.lvwww.sam.gov.lvwww.iem.gov.lv

Evaluation points*

5050494131312928241954

T a b l e 4 . 2

Latvian ministry Internet home pages – examples of accountability

Ministry

Ministry of WelfareMinistry of Environmental Protection and Regional DevelopmentMinistry of DefenceMinistry of FinanceMinistry of Foreign AffairsMinistry of the EconomyMinistry of AgricultureMinistry of JusticeMinistry of Education and ScienceMinistry of CultureMinistry of TransportMinistry of the Interior*Out of a maximum score of 60 points.

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and management of municipal administrative ter-ritories, the provision of communal services andother functions. The wide range of services dele-gated to local governments is based on theassumption that they are able to evaluate theirown needs and capabilities, and to plan theirdevelopment priorities and expenditures accord-ingly. Over the past few years, the functions andresponsibilities delegated to local governmentshave been increasing. Municipalities are thusacquiring a more significant role from the humandevelopment perspective, as their responsibilityand competence increases in the fields of educa-tion, health, participation, prosperity, and qualityof life.

The following sections analyze the capacity ofLatvian local governments to implement goodgovernance and to carry out the human develop-ment functions that have been entrusted to them.This capacity is analyzed from the followingaspects: the capacity to separate decision-makingand executive functions, local administrativecapacity (or the competence of local governmentstaff), technological capacity (or the ability to useinformation technology in administrative opera-tions), the capacity to promote public participa-tion in decision-making, and the capacity to pres-ent reports to the public.

In analyzing the capacity of Latvian local gov-ernments to ensure good governance that favourshuman development, certain factors must betaken into consideration.• The population in Latvia’s local governments isunevenly divided and varies widely. Large andsmall municipalities operate side by side. Smalllocal governments are far greater in number. Thesize of a local government frequently determinesits available resources and its ability to work effec-tively.• There is as yet no joint database from whichinformation about all local governments can becollected. On certain subjects, such as the educa-tion, gender and age of municipal employees, nodata are available at all. This makes it difficult toportray an overall picture of the country’s localgovernments.• Latvia’s local governments have considerableautonomy and freedom to choose their own prior-ities and development solutions. Therefore, theyeach devote varying attention to the aspects ofcapacity (education, information technology, pub-lic participation) that are analyzed in this section.

The relationship between

the decision-making and the

executive powers in Latvia’s

local governments

Although most local government activities aredevoted to everyday social and maintenanceissues, there is a growing tendency to engage inlong-term planning. The ability of a city or parish topresent itself in a positive light from a long-termperspective can help it to attract much-neededinvestment and participate in various develop-ment projects. Long-term planning requires theappropriate allocation of time and humanresources.

In connection with the yet-to-be-clarifiedadministrative territorial and public administrationreforms, there is much discussion about separatinglocal government decision-making and executivepowers as a precondition for effective management.Yet there is still no agreement on the extent andmanner as to which this precept should be applied.Should the position of executive director bedeclared as compulsory for all local governments?The current law on local governments permits themto decide for themselves. Consequently, in manymunicipalities the decision-making and executivepowers are not separated, and the head of themunicipal council is also its chief administrator.Currently slightly more than a quarter of Latvianlocal governments (28%, or approximately 160) haveexecutive directors.

Arguments for and against the separation of thedecision-making and executive powers are of botha theoretical and practical nature. Theoreticallymost local governments agree on the necessity toseparate the two powers, as this would promotegreater competence in municipal decision-making.Frequently local government councillors lack theknowledge and experience necessary for executiveadministrative tasks. The goal of the executive is toalleviate the burden of decision-makers andrelieve them of the need to work on time-consum-ing day-to-day issues. This enables decision-mak-ers to adopt better policy decisions and to elimi-nate the frequently-seen contradiction where thehead of a city council is involved in both the prepa-ration and execution of municipal decisions.

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In addition, the executive can ensure adminis-trative continuity, as theoretically executive per-sonnel do not have to leave their posts followingchanges in the decision-making administration. Thegreater stability of executive positions helps toensure the continuity of decisions taken, and thatinitiated development priorities, plans and proj-ects will not radically change together with a newdecision-making administration.

Furthermore, the separation of decision-makingand executive powers promotes mutual control,supervision and stability. The parallel existence oftwo branches of power decreases the opportunitiesfor illegal lobbying and corruption.

As stated above, most local governments sup-port the separation of the decision-making andexecutive powers, but only about one quarter ofthem have implemented it. The reason most fre-quently cited for combining the positions of munic-ipal leader and executive director is the lack offinancial and human resources. This is a particular-ly pressing problem in Latvia’s smaller municipali-ties, where financial resources are very limited.Local government leaders also fear losing controland influence in delegating powers that theypresently hold. Furthermore, there is widespreadconcern that two antagonistic powers may developand prove unable to co-operate. Some municipalleaders are afraid that with the establishment of aseparate executive, their municipality’s autonomy

may be threatened by a merger of local executiveinterests with those of central State executiveauthorities.

Although the separation of decision-making andexecutive powers is a useful instrument for promot-ing local government efficiency and human devel-opment, one cannot unequivocally conclude thatsuch a separation at the local level would be bene-ficial in all cases. It would probably not be sensibleto impose such a separation of powers in the coun-try’s smaller municipalities, considering their diffi-cult socio-economic situation and shortage ofresources. Administrative territorial reform, whichwould lead to the formation of larger municipalities,remains a pressing necessity. Only then might it bemore practical to separate the decision-makers fromthe executive. In any case, the honesty and compe-tence of municipal employees, and their ability torespect democratic principles, must be upheld.

Local government

administrative capacity –

education and knowledge

In this section the administrative capacity oflocal governments is examined from the aspect ofstaff professionalism and competence. At the


Dainis Rozenfelds, Chairman of the Kandava District Council

We are living better than before

No matter what times we may have lived through, I can be proud of being from Latvia. I am proud of my parents, my family, my children and my grandchildren.

Humans will always be driven by the desire to live a better life in the future and this is good. If we look back critically at the last few years, then we must admit that we are already living better than before. We are quickly approaching accession to the European Union, which will provide another guarantee for our further growth and give additional meaning to the lives of our youngsters. The number of people who have difficulty adjusting to the new system is decreasing. I believe that for the next few years our main priority should continue to be the further development of our rural areas.

I am also proud of our notable achievements in culture and in sports. I have often felt proud to witness the advent of modern technology in our daily lives, the implementation of significant projects and the upgrading of our infrastructure.

There are still many problems to deal with, but we will be able to solve these ourselves, without losing our Latvian essence and while maintaining good relationships with our neighbours.

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C H A P T E R 4

beginning of local government reform in 1992, thenecessity for a new and high quality continuingeducation system for municipal leaders andemployees was outlined, in part, to promote a par-allel development of democratic processes inLatvia’s local governments. From a practical pointof view, the implementation of a local government’svaried and responsible functions – which includehealth care, social services, education and culturalservices – requires well-educated and independ-ent-minded decision-makers.

As previously stated, the lack of both humanand financial resources is preventing a number oflocal governments from adequately fulfilling all oftheir assigned functions. For example, in one vitalsphere of local government work – social assistance– 91% of municipal employees had no education insocial work in 1999. The data obtained from a sur-vey of local government leaders shows that 36% ofthem have studied agriculture, 17% have studiedengineering, 13% economics and 10% teaching.Most municipal leaders have no specialised admin-istrative education, which once again illustrates thenecessity for increased education opportunities toraise qualifications. The specifics of local govern-ment work require the skills and knowledge to fol-low changes in legislation, process a great deal ofinformation, and understand municipal activity andcommunity development in the broader context ofeconomic globalization, Euro-integration, and polit-ical participation.

At present the education of local governmentemployees is entirely in the hands of the munici-palities themselves. The leader of each local gov-ernment can personally determine how many andwhich employees to hire, the extent of their qualifi-cations, their salaries, and further educationalopportunities. A precondition for the optimizationof the administrative system as a whole is a uniformpersonnel development system for all levels ofmanagement, permitting the education of a profes-sional, qualified civil service that works under dem-ocratic principles of governance and high standardsof conduct (see the introduction of this Chapter).Theoretically under the present public administra-tion concept, a civil service with the same person-nel management system as that of the country’scentral administrative institutions must be imple-mented in Latvia’s local governments. This wouldentail the same system of quality demands, careerplanning, work performance and evaluation,salaries, disciplinary monitoring and promotion.

Currently, however, a personnel planning systemis being implemented only at the State administra-tive level, for which State budget resources havebeen allocated. An institutional data base has alsobeen established and the appropriate regulationshave been enacted. The new Law on the Civil Service,which was adopted in September 2000, does notforesee the implementation of State civil servicepractices in local governments. One unintentionalexception can be noted. In 2000 the State School ofAdministration organized and paid for the trainingof 22 municipal executive directors. However, thiswas merely a lucky coincidence that occurred thanksto individual activity and initiative, and which is notexpected to continue in the next few years. The cur-rent situation can be described as one that excludesmunicipalities from the uniform establishment of acivil service in public administration.

Various public administration models usedthroughout the world differ according to the cen-tralization level of specific public administrationcomponents. In Latvia the State administration’sability to create a professional civil service – whichis one of a State’s central functions – is still in ques-tion. There still has been no clear decision for oragainst the centralization of Latvia’s administrativesystem, under which the civil service would operateat all levels of governance.

There is still no clear place for local governmentsin the overall scheme of State administrative reform.Yet as stated above, the current public administrationconcept foresees the inclusion of municipal workersin a unified civil service. Although the viewpoints ofmunicipal leaders vary on this issue, one overridingfear is that the autonomy of local governments will bethreatened by centralization tendencies. Not manymunicipalities wish to be integrated into a joint per-sonnel-planning system, which admittedly wouldhave the positive effect of providing certain guaran-tees and social protection measures for municipalemployees. This issue must really be viewed togeth-er with the need for a sensible administrative territo-rial reform. If a large number of smaller municipalitieseventually does consolidate into a smaller numberlarger entities, then there will be more reason notonly to separate executive power from decision-mak-ing power, but also to integrate Latvia’s local govern-ments in one common civil service.

To satisfy the local government need for addition-al education opportunities, a whole series of institu-tions have become involved – the Latvian Local Gov-ernment Studies Centre, the University of Latvia’s

1 2 4


State and Local Government Project ManagementStudies Centre, the Consultation Centre of the Asso-ciation of Local Governments, and several ministries.These are all individual institutions with independ-ent municipal employee training programmes. Cur-rently in Latvia there is no common system of goal-orientated municipal employee training. Theteachers and trainers of these institutions do nothave a common teaching strategy or programme con-tent (themes, theories, proportion of practical work,priorities) or approach (direct teaching, correspon-dence courses, study groups), or methodology, orteaching qualifications, or target audience.

In addition, there is no local government studiesco-ordination mechanism for supervising the train-ing process. Furthermore, study finances must beprovided by the local government and are deter-mined by the head of each municipality. The recep-tion of additional financing from the State for furthermunicipal training is one of the chief demands ofLatvia’s local governments.

The Phare State Administrative Reform Programmewas initiated in 1999 to overcome the ad hoc approachto municipal employee training and to implement acommon local government training system, yet itsimplementation has been suspended and there is nosign of it resuming in the near future. Once again,resources and time have been spent without theassurance of continuity. As a result, the training of localgovernment politicians and employees is continuingin an uncoordinated manner. In such a situation eachlocal government must decide on the training optionthat best conforms to its needs and resources.

Without an organized municipal training systemand one unified system of criteria, the quality oflocal government services is not likely to improvequickly, as these should be provided by adequate-ly prepared specialists. Several essential questionshave not been answered concerning the requirededucational background, skills and evaluation ofmunicipal specialists for the provision of qualityservices to the population.

Local government

administrative capacity –

information technology

In the 21st century, information technology (IT)has become a precondition for local governments

to be at the forefront of national developmentprocesses. IT facilitates the acquisition and organi-zation of quality information, without which a suc-cessful municipality cannot operate (for moredetails see the 1999 Report). High quality comput-er technology has become necessary for local gov-ernments to provide such essential services as theregistration of residents, social assistance, healthcare, educational and cultural opportunities, sup-port for local enterprises, environmental protec-tion, employment promotion, as well as the upkeepof the local infrastructure, streets, and roads.

The acquisition of information technology hasdepended mainly on the financial capabilities ofeach local government and on the initiative of itsmunicipal leaders. Therefore the use of IT comput-ers and software varies widely among Latvia’s localgovernments (see Table 4.3).

As shown in the table, a fairly large proportion oflocal governments is still not equipped with com-puters, and about a third of those in use are out-dated. (Computers with 486 processors should bereplaced as soon as possible, because they do nothave the capacity to deal with modern informationsystems.) Local governments with Pentium I and Pen-tium II computers are able to use modern informa-tion systems. The proportion of Pentium III comput-ers reveals the percentage of local governmentsthat have been able to acquire computer technolo-gy within the last year.

Most of the software mentioned in Table 4.3 isrequired for municipal operations according tomodern standards. Accounting software should beused by all local governments, yet at present onlytwo out of three local governments do so. Only onein eight municipalities is linked to the NAIS Regula-tory Enactment Information System, while only one-fifth uses the Internet. The contrast with Latvia’scentral government institutions could not begreater, where the Internet has become a daily anduniversal means of communication, as well as adocument search and information tool.

Those local governments with no computertechnology are faced with a slower flow of informa-tion and documents. Traditional means of docu-ment circulation can no longer assure effectiveresults. Municipal activities require co-operationwith the central government, which possesses cen-tralized (and computerized) information on thepopulation, real estate, taxes, et al. While part ofthis data is collected in the municipalities, the vari-ety of means used to collect, organize, preserve,

1 2 5

C H A P T E R 4

and process it reduce local governments’ capacityto partake in the optimal circulation of information.In addition, municipal computer systems are oftenisolated and not linked with similar systems else-where – even within the same municipality, not tomention other parts of Latvia and centralized Stateinformation systems.

The computerization of local governments, likeemployee training, must ultimately be resolved atthe State level. A significant step in this directionhas been the implementation of the government-approved Unified Local Government Information System.By the year 2004, all municipalities are to be linkedto a single data transmission system, with access toState registers and with information about eachmunicipality provided on the Internet. The firststeps for implementing the programme were takenin 2000, when the extent of local government com-puterization was established through a comprehen-sive survey. In addition, the Local Government Infor-mation System Concept was worked out, and Statefunds were allocated for the acquisition of comput-ers and software, as well as the consolidation of thedata transmission infrastructure. Local governments

will also provide partial funding in order to increasetheir participation and interest in the project.

The fact that the State has already invested450,000 lats (over 700,000 USD) to support the com-puterization of local governments gives hope thatthe work started will continue. The implementationof modern information technology should greatlyimprove municipal administrative work by speed-ing up decision-making, and decreasing both thenumber and volume of documents and notices tobe submitted. It should also promote a greaterdegree of information exchange among State insti-tutions, municipalities and the public, and providethe public with better local government informationservices.

Public participation and

accountability

A survey of local government leaders and thepublic during the preparation of this Report gavethe opportunity to clarify the views of both sides

T a b l e 4 . 3

The use of computer technology and software in Latvian local governments (no data on Riga included)

Type of local govenment

CityDistrictParish

Use of computers(% of localgovernments)

729264

Use of softwareType of software

Accounting softwareComputerized calculation of real estate property taxComputerized registration of residentsComputerized registration of natural migrationUse of the Internet (with permanent or modem connection)Use of the NAIS Regulatory Enactment Information SystemUse of the GIS programme

Used by % of all local governments

6951422421137

Total number ofcomputers inlocal governments

9821701176

Computers by typeof processor

486

322535

Average no. ofcomputers perlocal government

16243

Pentium I,Pentium II

657060

Pentium III

355

1 2 6


about public participation in the decision-makingprocess. An overwhelming majority (86%) of sur-veyed municipal leaders believes that the publichas either very extensive or fairly extensive oppor-tunities to influence decision-making at the localgovernment level. However, only 22% of the publicthinks so. One-third (33%) of municipal leaders per-ceive the passivity of the population and the lack ofparticipatory motivation as a very serious problem,while another 58% see it as a fairly serious problem.Most of the surveyed local government leadersbelieve that the public has sufficient opportunitiesto participate in local decision-making processes,but is impeded by its own passivity and lack ofinterest. Most surveyed members of the public feelthat they cannot influence decision-making in theirlocal government, although they generally believethat people do want to participate in the develop-ment of their community, and that mechanismsshould be introduced to increase public participa-tion in policy-making.

Besides attitudes and opinions, the researchconducted for this survey also sought to establishwhat local governments and the public are current-ly doing to promote local participation (see Table4.4). Local government leaders indicate that munic-ipalities engage in consultations and various formsof co-operation with the public, civil society groups,NGOs and State institutions. A certain initiative andactivity on the part of both municipalities and thepublic is evident regarding meetings with deputiesand municipal employees, and regarding publicdiscussions. However, local government initiativesregarding consultations with interest groups andNGOs, and regarding the delegation of functions toNGOs have not been as successful.

Overall, the democratic link between the vari-ous political agents at the local government level isstill at the search and development stage, and thusineffective. This is also shown by the public evalua-tion of available forms of participation in local gov-ernment decision-making. For example, in many ofthe surveyed municipalities, elected politiciansand councillors have met with the public and heldpublic discussion meetings. Yet less than one-thirdof the surveyed public has participated in suchactivities and only one-third regards these partici-pation forms as effective. The survey results showthat participation, public involvement, and open-ness in local government activities are priorityissues that must be fully, rather than formallyimplemented.

One determinant of local government capacityis the quality of adopted and implemented deci-sions and their evaluation by the various partiesinvolved. The evaluation of municipal activities canoccur either through the form of an internal controlsystem, or through various means of public controlwith the participation of the inhabitants, the massmedia and public organizations. The Law On LocalGovernments indicates that city or parish councilmeetings must be open, and that council decisions,council chairmen’s directives, audit commissionconclusions and open meeting resolutions must beaccessible to the public.

One step towards the promotion of greateropenness and accountability may be soon be takenwith an expected amendment to the Law on LocalGovernments, under which local governments wouldhave to submit annual public reports, as has been thecase with government ministries since 1999. Thefirst such local government reports may be submit-ted in 2002 on the current calendar year. While thisexpected amendment can be considered as a pos-itive step, there are serious doubts about its effec-tive implementation. Some local governments havealready said that they lack the means for fundingsuch reports, as well as the human resources forwriting and publishing them. Others doubted theusefulness and practicality of such reports.

The above again confirms the often-stressedcontention in this Report that the availability ofinformation on its own does not necessarily entailparticipation.

Internal audits

Internal audits are one mechanism for ensuringthe internal control and accountability of local gov-ernments. The basic task of such audits is to establishwhether local government activities have conformedto the law and to the interests of the electorate.Unfortunately, current internal audits or control sys-tems do not work in practice or are ineffective. As aresult, such democratic principles of governance asthe transparent use of financial resources andaccountability for adopted policy decisions have notacquired the needed momentum.

A well-organized and planned internal controland financial monitoring mechanism can also serveas a valuable policy analysis instrument. Currentlyinternal audits are much better organized and moreseriously conducted in Latvia’s central administra-

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C H A P T E R 4

tive institutions. Ministries have developed specialdepartments for this purpose, organized trainingsessions, issued handbooks, developed reportforms and attracted foreign investments.

According to law, each local government mustsubmit an annual report listing all of its revenues,expenditures, loans and special budgets to the

State Treasury. The most essential part of thereport – an evaluation of the efficiency of the localgovernment’s spending practices – is prepared byan audit committee that is part of the local govern-ment structure. The Law On Local Governments statesthat audit committees must establish whetherfunds have been spent in accordance with their

T a b l e 4 . 4

Local government activity in promoting public participation, and actual public participation in municipal policy-making processes

Often, always Sometimes Practically never Yes No

Local government activity in promotingpublic participationWhat methods and resources do you use, and howoften do you use them for resolving important issuesat the local government level? (% of surveyed local government leaders*)

Consultations andco-ordination withother local governmentsMeeting withmembers ofthe publicConsultations withinterest groupsand NGOsConsultations andco-ordination withentrepreneursConsultations with theAssociation of LatvianLocal GovernmentsPublic discussionmeetings

Consultations withministries andministry departmentsConsultations withpolitical parties,politiciansDelegation offunctions to NGOs

* The answer “cannot decide” is not included in the Table.

977

220

6832

0

4548

7

4450

6

4447

9

3460

7

1969

12

831

60

344

50

90

1684

694

793

793

1189

1189

693

693

Public participation in municipal policy-making processesHave you partaken in any of the activities listed below? (% of surveyed inhabitants*)

Wrote letters to mylocal government

Met withmunicipal deputies

Participated indiscussions about my

city’s development planInclude myself among thecategory of entrepreneurs

and self-employedTurned to NGOs

Participated in publicdiscussion meetings

Met with ministersand civil servants

Met withSaeima deputies

Active memberof an NGO

1 2 8


intended use as outlined in the annual budgets.The committees must also verify the efficiency ofspending by local government agencies, enterpris-es and employees. In addition, they must ascertainwhether municipal property has been upheld inaccordance with the law and in the interests of thepublic. The audit committee reports to the localgovernment council of deputies, reports all irregu-larities and provides recommendations for theirfuture prevention.

An analysis of the work of audit committeesreveals that many local governments do not havethe capacity to plan their financial resources effec-tively, evaluate the efficiency of budget spending,and implement transparent budget-planning andreporting procedures that conform to the law. Thework of many audit committees is only conductedfor form’s sake. Only in rare cases do committeesinclude evaluations on the efficiency of resourcespending in their reports.

Several reasons can be given for the develop-ment of such a situation. The lack of capable spe-cialists or human resources has already been men-tioned. The Law on Local Governments does notstipulate the required professional expertise ofcommittee members. The formation of audit com-mittees is actually a political decision that is left tothe discretion of the dominant political forces ineach local government. As a result, there is a riskthat such audit committees will turn a blind eye todiscovered irregularities. Practically no attentionhas been devoted to training audit committeemembers or providing them with handbooks andpractical recommendations on the execution oftheir work. Minimum standards of professionalcompetence should be established for audit com-mittee members.

The fact that audit committee members work ona voluntary basis in their free time also contributesto the formal nature of such audits, which may paymore attention to economic activities than on thequality of governance and management efficiency.Although by law audit committee work should bepaid for from local government budgets, in practicefunding for such work is usually not provided.Resources are also not allocated to hire profession-al audit companies or certified auditors, who by lawmust be invited by the local audit committee atleast once a year to conduct a professional audit.Last year, according to State Auditor data datingfrom September 2000, annual audits conducted bycertified auditors had been submitted only by 30%

of local governments. The main argument present-ed for not submitting the required reports has againbeen based on the inability of local governments topay the high fees of certified auditors or auditingcompanies. Furthermore, in Latvia there are only131 certified auditors for 578 local governments. Inaddition, many certified auditors specialize inauditing private companies, but not public institu-tions. These factors have also hindered compliancewith the demands of the law.

Since the size of Latvia’s local governments andthe resources available in each municipality variesgreatly, co-operation in the development of effi-cient auditing systems could occur through the jointformation by smaller local governments of commoninternal audit systems that would decrease auditexpenses and improve their quality. Emphasisshould be given to the publication of audit resultsthat are accessible to all inhabitants.

Administrative

characteristics of Latvia’s

smaller local governments

Latvia is administratively divided into local gov-ernments of varying size, the vast majority of whichare very small (see Information 4.7).

The population in almost a third of Latvia’s localgovernment territories does not exceed 1000 peo-ple, and does not exceed 2000 people in 71% oflocal government territories. An overwhelmingmajority of local governments (84%) administer ter-ritories whose population numbers less than 3000.This fragmentation of Latvia’s territory has beeninherited from the first period of independence(1918 –1940), and from the subsequent Soviet peri-od, which lasted until 1991. The fact that municipal-ities remain small is also influenced by demo-graphic processes, namely, the migration ofinhabitants to larger urban centres, and by the slowprocess of voluntary local government unification.While the optimal size of local governments has notyet been determined, several political analysts andexperts from Phare projects in public administrativereform and regional development have pointed tothe necessity of forming larger local governments.Although the size of a local government is notalways the determining element in its develop-ment, the smaller a local government, the larger the

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C H A P T E R 4

risk that its development will be slower and that itwill have less resources at its disposal than largerlocal governments.

Several potential risks threaten the efficiencyand democracy of smaller local governments.• The limitations of political choice. In order to developsuccessfully, a local government must have demo-cratically elected politicians and capable leaders atits helm. Since democratic elections are based onchoice, they work best under conditions of widerchoice. Small local governments have a small elec-torate that is reduced even more by the fact that onaverage only half of eligible voters use their right tovote in local government elections (56% of eligiblevoters participated in the 1997 municipal elec-tions). Small local governments have a smallernumber of deputies to be elected and a limitedchoice of candidates. Therefore, the complaint thatthere is “nobody to choose from” is widespread insmaller local governments. To promote greaterpolitical activity and wider choice, the Saeimadecreed that in the 2001 elections, each local gov-ernment must have at least two lists of candidates.• The presence of personal biases. In smaller local gov-ernments the subjectivity of personal likes and dis-likes is much more pronounced. For example, localgovernment leaders frequently assemble peoplethey know and like in choosing their staff, and rarelyuse professional qualifications as criteria for the

selection of employees. Smaller local governmentshave a greater likelihood of becoming captive tospecific interests, which could lead to the unjustifi-able use of resources and the introduction of unde-mocratic styles of governance.• The lack of human resources. By law all local govern-ments must perform the same set of functions andprovide the same range of services. Smaller local gov-ernments experience greater difficulty in hiring a suf-ficient number of competent personnel to performthese services. This deficiency is particularly evidentin the smallest and least developed rural municipali-ties, and is partially fuelled by the migration of youngand talented people to more developed urban cen-tres, including Riga. Smaller local governments can-not afford to hire many employees and thereforetheir functions are performed by less people, whosimultaneously perform secretarial work, social work,supervise registry offices, and conduct other tasks. Assome local government functions require specificknowledge, they are either not implemented or areperformed poorly due to the lack of specialists. Thelack of qualified lawyers is an acute problem in manymunicipalities. The problem of finding competentpeople to work in local government auditing commit-tees has already been mentioned. In smaller localgovernments financial savings are usually imple-mented at the expense of staff, and often five or sixfunctions are performed by two or three employees.


Breakdown of Latvian local governments at the end of 20001

Breakdown of local governments by status (in November 2000 Latvia had 578 local governments)Parishes 473District cities 65Counties (newly formed joint municipalities) 7Republic cities 7Districts 26

Breakdown of local governments by size of population (except for the 26 district local governments)1 – 1000 170 31%1001 – 2000 220 40%2001 – 3000 72 13%3001 – 10,000 66 12%10,001 – 30,000 17 3%30,001 – 900,000 7 1%

1 Latvian Department of Local Government Affairs

1 3 0


• The weakness of administrative procedures. The Law onLocal Governments requires the establishment of onepermanent committee for financial and socialissues and one for educational and cultural issuesin each local government. These committeesdevelop and prepare draft decisions for review atcity or parish council meetings. The work of localgovernment institutions and enterprises, budgetprojects and expense estimates are under theauthority and control of these committees. Again,due to the lack of human resources, these commit-tees do not even exist in some small local govern-ments. This in turn has a negative effect on thequality of decision-making. In order to promote thereorganization of administrative procedures, theLaw on Local Governments requires each local govern-ment to work out its own statutes. Theoretically,these statutes regulate the organization of localgovernment activities and decision-making proce-dures. The statutes of Latvia’s larger municipalitieshave been more or less developed, are opera-tional and are regularly up-dated, whereas in thesmaller municipalities they are frequently of poorquality, out-dated and not always followed. Thisresults in a greater risk of spontaneous and subjec-tive decision-making that is concentrated within anarrow circle.

• The shortage of financial resources. The capacity oflocal governments to implement administrativeactivities designed to promote human develop-ment depends to a great degree on the financialresources at their disposal. Good governance costsmoney. In most cases, the wealthier the municipal-ity, the more opportunities and tendencies for it toadvance and develop.

An analysis of local government revenues andadministrative expenditures shows that revenuesfrom taxes and non-taxed income per residentincrease along with the size of local governments,while administrative expenditures and State subsi-dies from the Local Government Equalization Fundcorrespondingly decrease (see Figure 4.1).

The weak financial capacity of smaller local gov-ernments is reflected in all three financial analysissections. The smallest municipalities have thesmallest revenue and their upkeep is the mostcostly. As a result, smaller local governments can-not support themselves and properly perform theirassigned functions, which is why they receive thelargest State subsidies. The proportion of adminis-trative expenditures in local government budgetsfluctuates from two percent to one quarter. Thehigher the proportion of administrative expendi-tures, the less resources available to perform other

F i g u r e 4 . 1

Local government revenues, expenditures and State subsidies in relationship to local government size

Revenues (taxes and other sources) Administrative expenditures State subsidies

140

130

Lats

perinh

abita

nt

Number of inhabitants

120

110

100

90

80

70

60

50

40

30

20

10

011601-290003500-116002500-34992000-24991500-19991200-1499900-1199600-899599

1 3 1

C H A P T E R 4

important tasks, not to mention long-term invest-ments for community development. An examina-tion of the ratio of taxed and non-taxed local gov-ernment income per person – which is an indicatorof a local government’s economic capacity – showsthat the country’s smaller municipalities are in theleast favourable position.

It must be stressed, however, that in spite of thepotential risks (which can apply to any municipali-ty) and their unfavourable position, many smallmunicipalities are working quite successfully, andskilfully coming to terms with their unenviable situ-ation. An analysis of their performance mechanismsand degree of efficiency would be useful.

The power to reduce the many risks facingsmaller local governments does not depend solelyon the skill and honesty of their personnel. Otherfactors, such as their location and infrastructure, arealso important. One proposed solution for strength-ening local governments involves the consolidation(or amalgamation) of smaller municipalities intolarger ones. This process is slowly being imple-mented within the framework of administrative ter-ritorial reforms begun in 1992. However, to dateonly 28 local governments have merged into 11 con-solidated local governments that include sevencounties, and it is still too early to judge whethertheir overall operational capacity has increased.

The slow pace of reforms to date shows that inspite of the promised advantages of amalgamation,many local governments are reluctant to engage init. Experts who have surveyed several districtsadmit that the amalgamation process itself pres-ents some difficulties. The main benefits of amalga-mation would include the improvement of adminis-trative and economic capacity (which in turn shouldlead to higher service quality), the increased spe-cialization and higher qualification of employees, agreater concentration of financial resources,improved territorial development planning andparticipation in international projects, and the fur-ther decentralization of State governance in thefavour of local governments (through the allocationof more functions currently executed by the State).

The main drawbacks include public oppositionto amalgamation, the costs incurred by suchchangeovers, and the distancing of councillors fromtheir electorate. The chief benefit of maintainingthe fragmented administrative territorial division inits current form would be the preservation of closercontact between local government councillors andthe public. Yet the losses are many: a heavy, ineffi-

cient and slow administration process, encumberedbudget planning, a possible increase of administra-tive expenditures, an arduous process of outliningactivity priorities, the continuing uncertainty aboutfurther development perspectives and the ultimateprospect of forced amalgamation.

Amalgamation is the most convenient routefrom an administrative point of view, as it wouldalleviate the supervision, co-ordination, and execu-tion of administrative tasks and attract specialists.This would also promote quicker economic growthand encourage human development. Whateverroute is taken in the course of reforms, it is essen-tial to ensure that all principles of good governanceare strengthened, namely: participation, trans-parency, responsiveness, equality and justice, effi-ciency, accountability and strategic direction.

Conclusions and

recommendations

If planned national programmes are not grantedsufficient resources, then their implementation willremain in doubt. In order for policy-making to pro-mote human development, budget planning andadoption processes must be linked to the strategicpriorities and vision of the country.

A long-term development vision must first beagreed upon for the country, before human devel-opment goals can be set and their implementationmonitored and evaluated. The State Chancellery’sPolicy Co-ordination Department has an essentialrole to play as the principal co-ordinating institu-tion for working out this vision.

National programmes and budget allocationsreflect national priorities and values. In order topromote transparency and understanding about itsvision for Latvia’s future, the government must pub-licize a declaration of its values, ethical foundationsand fundamental principles of governance. Thesefundamental principles must be formalized andembodied in the daily functions of the State’sadministrative institutions. Mechanisms for moni-toring the observance of these fundamental princi-ples should be established, with emphasis beingplaced on the prevention of bad governance, ratherthan on penalties in the event of transgressions.

In order for the multi-sectoral co-ordination ofhuman development policies to become more effi-cient, and for all individuals to feel that they also

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have a role to play in the country’s overall develop-ment, the principle of team activity must bestrengthened among ministry staff. Unhealthy com-petition between ministries must be diminished,and obstacles to inter-ministry co-operation in pol-icy-making must be eliminated.

Governmental public relations mechanisms mustbe developed to increase transparency and account-ability. Besides the “traditional media,” the Internetand the latest technologies should also be used.

Annual reports are useful instruments that pro-mote ministry responsibility, but do not incorpo-rate concrete policy goals or indicators to measurethem. Therefore, the reader (in this case, the pub-lic) has little opportunity to analyze the efficiency ofthe country’s administrative institutions. Informa-tion about budget expenditures must also belinked to information about the execution of con-crete programmes. These principles should beobserved in the local governments’ forthcomingannual reports.

In order for quality policy analysis to play anincreasing role in Latvia’s national policy-makingprocesses, the capacity of policy analysts and theinstitutions requesting such analyses must beincreased. Changes must also be made to the Statesystem of commissioning policy analyses in orderto facilitate the transfer of international experienceto local policy analysts and increase the level of co-operation between Latvian and foreign researchers.Research by foreign experts is usually conductedoutside of local policy analysis circles. Consequent-ly, the capacity of Latvia’s clients and local analystsis not increased.

Inter-ministry co-operation in the research ofmulti-sectoral issues must also be promoted, andpolicy analysis priorities should reflect national pri-orities.

To improve the quality of public policy in thenearest future, the capacity of independent policyanalysis experts and policy institutes must also beraised in order to permit them to conduct qualita-tive analyses of public policies and to forecast theconsequences of such policies through cost-benefitstudies, including the evaluation of social costs.Here social costs are understood as the widening ofinequality or misunderstanding between varioussocial or ethnic groups or between men and women.

In this regard, the opportunities for potentialspecialists to gain the necessary policy analysisskills must be increased in Latvia’s higher educa-tion system.

Decisions on important issues that concernmunicipal development, their implementation andtheir adequate supervision are dependent on theknowledge and skill of local government politiciansand employees. The necessity for skilled and hon-est people is compounded by the fact that localgovernments are more difficult to supervise andcontrol than the central State apparatus.

Increased public participation in local govern-ment decision-making must be promoted, particu-larly regarding such essential issues as communitydevelopment and improving the quality of life. Thiscan be done by organizing more public discussions,by involving public interest groups in decision-making and development planning, and by organiz-ing partnerships between local governments, NGOsand businesses.

In order for local governments to perform theirfunctions according to modern requirements, prior-ity must be placed on increasing their technologicalcapacity.

The autonomy and decentralization of local gov-ernments is not always is the best solution forimproving municipal capacity. A single overallapproach for improving the administrative capacityof local governments must be developed andimplemented. To date the greatest emphasis hasbeen placed on strengthening the capacity andimproving the quality of the country’s central (ornational) institutions.

In promoting high standards and demandinghigh quality services from local governments,appropriate financing must be provided and amunicipal support programme must be estab-lished at the national level. The development of aunified training system for municipal politiciansand employees would be a positive step. Onlythen would it be possible to implement uniformand compulsory standards of service in all localgovernments. Resources must also be allocated toincrease the administrative capacity of local gov-ernments. Without an appropriate local govern-ment infrastructure, which includes informationtechnology, local governments will be able toensure neither a qualitative flow of information,nor document circulation, nor an effective deci-sion-making process. In many local governmentsthe principal means of document circulation isstill the national postal service. Some local gov-ernments have no faxes or computers or Internetconnections, and their telephone lines are of poorquality.

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C H A P T E R 4

Local government capacity could be raised bydeveloping various local government co-operationmodels, thus respecting their municipal sovereign-ty and permitting them to choose on their ownwhether or not to amalgamate.

Administrative capacity is not developing at thesame speed and equally successfully in Latvia’scentral and local institutions of governance. In cer-tain aspects of capacity, achievements have beenmuch more pronounced at the central level of gov-ernance (some examples include access to informa-tion, internal auditing and public accountabilityprocedures, and uniform training systems). In order

for human development in Latvia to be more uni-form, the capacity of the country’s administrativeinstitutions must be more evenly balanced out.

In certain aspects of capacity not much has beenachieved at either the central or local governmentlevel. The attraction and use of policy expertise hasnot been effective, and assessment indicators arenot used. Therefore it is impossible to evaluate theresults of several development processes. Evalua-tion and transparency are still insufficiently appliedin the country’s administrative institutions. Thishinders policy continuity, as well as the participa-tion of an informed and knowledgeable public.

The purpose of the Human Development Reports

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Transcript of The purpose of the Human Development Reports