BALANCING FLEXIBILITY AND ACCOUNTABILITY

Jan Hendeliowitz, LEED Directing Committee Chief Policy Advisor, Ministry of Employment Danish National Labour Market Authority

Models of Public Employment Service: Centralized and Decentralized Moscow, Russia 17-18 September 2014

About us

The OECD: A forum for governments to share experiences and seek solutions to common problems.

The LEED (Local Economic & Employment Development) Programme:• Created in 1982 and has 37 member countries• Key themes: Employment & skills, entrepreneurship, the

social economy, economic development & governance • Forum on Partnerships and Local Governance: over 2900

members in 61 countries

2

“Twenty years ago local agencies were simply responding to local issues as

they came up. We needed an integrated vision if we were to transform our

economic fortunes. Flexibility from the state government allowed us to develop this vision and now all the local agencies

work more closely together to deliver real results for the area.”

Keith Patridge, President of McAllen Economic Development Corporation.

‘The possibility to adjust policy. . . to make it better

adapted to local contexts, actions carried out by other organisations,

strategies being pursued, and challenges and opportunities’

(Giguère and Froy, 2009).

What is flexibility?

What do we mean by flexibility?

• Programme design: programme mix, features including target groups, programmes outside the standard portfolio, local employment strategies

• Financing: global or line item budgets, resources allocation between budget items

• Target groups: locally specified groups

• Goals and performance management: sub-regional goals, negotiation of targets and indicators, performance assessment not based solely on quantitative criteria

• Collaboration: freedom to participate in partnerships, local decisions about collaboration

• Outsourcing: responsible for outsourcing services to external providers, influence on terms of reference of contracts

WHY IS LOCAL FLEXIBILITY IMPORTANT IN PES

MANAGEMENT?

1. Need to respond to local variation

Unemployment rates, skills supply and demand,

demographics, etc.

Unemployment rate, UK

Note: composite indicator based on 11 countriesSource: OECD (2010), Breaking Out of Policy Silos: Doing More with Less

2. Facilitates policy integration . . .

Increasing relative importance of different factors on local policy integration

. . . and collaboration

United States

Flanders, Belgium

Canada Czech Republic

Korea France Northern Ireland

(UK)

Italy Sweden Israel Ireland Australia1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Degree of Flexibility Degree of policy co-ordination and integration

• Sub-regional flexibility in management of PES is positively and statistically significantly related to employment rates in 25 OECD countries surveyed (2009)

• An increase of 1 point in OECD flexibility index is related to an increase in employment rates of 1.64%

3. Evidence of improved outcomes

HOW TO BALANCE FLEXIBILITY AND

ACCOUNTABILITY?

Balancing flexibility and accountability

• Negotiating local targets while ensuring they add up to the achievement of national goals

• Awarding flexibility incrementally: waivers, awarding to larger cities first

• Boosting horizontal accountability: partnerships hold each other accountable

• Using data: stimulus for cooperation and continuous evaluation of success

WHAT DOES FLEXIBILITY LOOK LIKE IN DIFFERENT

CONTEXTS?

Flexibility in the management of employment policies & programmes, Local Job Creation project, 2013

United States

Flanders, Belgium

Canada

Czech Republic

Korea

France

Northern Ireland (UK)

Italy

Sweden

Israel

Ireland

Australia

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Example: United States

Workforce Investment Act of 1998• Local Workforce Investment Boards responsible for

overseeing employment and training services under WIA in a given geographic area

• Federal waivers where rigidities prevent states from responding effectively

Workforce Innovation and Opportunity Act of 2014• Streamlined WIBs with more responsibility• Some flexibility given under waivers now part of law (e.g.,

enhanced budget flexibility)• Strengthened accountability

Thank you

www.oecd.org/cfe/leed