The challenge of transition from a central planned to a market-based economy in Eastern Europe and Central Asia has been, at the heart, a change in the role of the state. However, while rapid political, economic and social transformations have played out, reform of the administrative and bureaucratic structures of government have taken much longer. Raising the capacity of the government machinery has become critical to consolidating and sustaining prior reform achievements.
For the most part, in Eastern Europe and Central Asia, political party structures have been replaced by parliaments, which are increasingly demanding public accountability and transparency. In addition, the public sector which used to occupy the entire economy continues to be rolled back by ongoing privatization programs. As the market economy emerges, needs have changed – deep pockets of poverty and unemployment have surfaced, demands of the labor market have shifted, the balance between private and social interests in corporate governance is more nuanced than before. Simultaneously, the public service is now accountable to its citizens for delivery of public goods and service, to the private sector for the maintenance of an appropriate investment climate, regulatory regime, and a level playing field and to the political directorate for the design and implementation of policies and programs.
Early expectations that rapid emergence of democratic institutions and the private productive sector would be mirrored by a swift reorganization of the civil and public services have not been realized. Many practices and structures still remain more appropriate to the needs of command rather than market economy. There continue to be competing and overlapping mandates across different bodies and levels of government, often with unclear internal and external accountability mechanisms. In some cases, decision-makers, eager to move ahead with reforms, have resorted to informal, rather than institutional mechanisms, for policy negotiations, which has limited transparency. And, in many cases, public employment practices and pay structures still reflect the influence of communist party structures.
Nevertheless, spurred by social and economic reform objectives, future EU accession, fiscal exigencies and, not least, public service needs, most countries in the region have programs aimed at creating a merit-oriented, depoliticized and professional civil service, improving service delivery and building public and private sector confidence in the government.
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