Sunday, July 15, 2012

Slim state, IT systems and the Internet

In Estonia the idea of "slim state" has long been a praised one. Relatively low taxes, minimal government and regulations are considered to be ideal. Until now this strategy has worked rather well .... in the sense of economical development. Estonian economy has been developing best among the post-Soviet republics.

 I would like to make the point that in the 2012 world a neoliberal governance might not be the most successful one and looking on other models could prove useful. As I am residing in Sweden now I have an opportunity to observe the differences between the relatively neoliberal Estonian and the relatively social-democratic Swedish society. I also suggest that modern IT technology, social networking, datamining, mobility and other technical+sociological developments provide many new opportunities for governing a society better than ever.

 Firstly I will define the problem.
 If one pursues a slim neoliberal government then the ideal is the absolut minimum of public services. In the most extreme cases the public services could be limited to law and order, foreign policy, defence, governance and some infrastructure. The taxes can therefore be very low and most of the affairs in the state would be taken care of by the private sector. In a way such a public sector could be described as an effective automation. Little (taxes) goes in and minimal (services) comes out. This is indeed (economically) efficient ... but only in short term.
 The problem with such a model is that a slim public sector is not able to deal with long term development and any new problems that turn out in the society. This is because by definition creating an effective public sector means getting rid of all the specialists and budget that are unnecessary for dealing with the upmost current and burning issues.
 Here are some examples from Estonia. In Estonia there is unfortunately no public office, department or specialists who are currently developing plans to deal with the approaching demographic slump - it is nobodys problem. For many years the fighting with HIV and drug abuse has been voluntary, project based endeavour and not an issue dealt with a budget and a dedicated office. The development of infrastructure and public transport is rather hectic both on municipal and state level. The whole national energy policy of Estonia was for many years more or less handled by one man - Einari Kisel. In February 2012 he left for World Energy Council and I am not sure if anyone is looking on the issue after that.
 Of course things are not so bad as it may seem from the few previous examples - they are just illustrations of the issue. Estonian government is fortunately not a slim neoliberal automate, many occurring problems are dealt with and especially thanks to EU funds long term development of infrastructure is also going on.

 In Sweden the government is not slim. This is not only a tax issue, but also an issue on how people look at their society. Public sector in Sweden is trusted by the citizens and it holds an important role. Many problems are expected to be handled by the public sector and they also are. This means that long term development is (well) handled in many areas. There really are not many problems that do not "belong" to some public office and if a new one appears then the public opinion quickly demands that "somebody" must step up and take care of it. One might argue that sometimes the handling has not been the best possible one. For example the risks of the housing credit bubble are very big and the amount of processes handled on paper by public offices could be smaller.

 So in a nutshell: Having a slim government and not managing the society is better than bad management and waste, but good active management is much better than non-management.

 The good thing in modern times is that active management and handling long term development has never been so easy. Nowadays it is possible to measure and analyze all kinds of data. This gives much better input for number based management and policy decisions than guessing and using expert opinions.
 Thanks to social media and Internet it is much easier to measure public opinion and to discuss things. Should we have more bike-roads or should we build one km of high-way? Should we increase the salaries of teachers, nurses or pensions?
 Thanks to the Internet and the widespread of the english language it is now much easier to learn from experiences of other countries. There are many fields where copying policies or programs is a valid option. Why not copy the whole school program of Finland or Sweden - what could go wrong with that?

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