Strategic foresight in government
Good governance requires forward-looking governments with a clear strategic vision. As stated in the first Public Governance Review of Spain, such a vision should go beyond immediate actions and the current context. This is probably one of the main opportunities of the CORA reform, envisaged as the immediate response to the financial crisis as far as the public administration was concerned. But, as outlined in OECD (2014d), additional vision and actions are needed to create the conditions for continuous improvement. Box 1.2. shows how the principles of Performance Management can be implemented in seven steps in order to ensure well- integrated performance measurement and evaluation.
Box 1.2. OECD Principles of Performance Management: From setting objectives to measuring results - A seven-step process
Performance measurement and evaluation need to be integrated into all major policy initiatives both ex ante and ex post - these tools are critical to evaluate policies to identify success and failures, and to improve policies accordingly. The process of performance measurements includes the definition of concrete and measurable objectives and the evaluation of whether they have been achieved. It helps to ensure that strategies inform daily decision making, to enhance accountability and credibility, and to communicate progress. Performance measurements work best if they build on clear objectives, good-quality data and are embedded in a culture of constant learning and improvement.
There are risks, however. If measurements are not complemented with more in-depth qualitative analysis, these indicators lead to a situation in which reward is given to programming that is not achieving its intended result, or is achieving perverse outcomes. Moreover, an exclusive focus on “what is measurable” leads to the discounting or non-measurement of other important performance objectives.
The OECD has developed a seven-step methodology to help policy makers set objectives for their policies and assess whether they have been achieved. Figure 3 provides a concrete illustration of the application of the seven-step method to a policy on strengthening the enforcement of traffic regulation to reduce traffic causalities.
Box 1.2. OECD Principles of Performance Management: From setting objectives to measuring results - A seven-step process (continued) Step 1: Establish priority policies
For indicators to provide valuable information, they must be properly rooted in policy itself. At the same time, it is unrealistic, and perhaps undesirable, to link indicators to all policy initiatives. Thus, policies need to be prioritised according to their ability to help government meet its strategic objectives. A priority policy should be articulated as a consistent course of action expressed as a causal and concrete statement (see example below).
Step 2: Define the targets
A target is a concrete goal that states the degree or level of achievement expected with respect to its associated priority policy. Targets are most directly linked to results indicators, and the degree or level of achievement that a target measure can be based on a variety of comparative parameters, depending on the base comparator and the results being sought.
Step 3: Identify key activities
An activity is a specific programme, initiative or project that clearly supports reaching a target. Activities must be systematically and clearly linked to targets and should be expressed as action verbs. Thus, “train”, “implement” and “build” all work well to lead an “activity statement” but “improve”, “strengthen” or “enhance” for example, do not.
Step 4: Build output indicators
An output indicator measures progress with an activity, and thus these two components should be clearly linked. A well-constructed output indicator is measurable. Thus, it must be quantitative (i.e. expressed in physical or monetary units) and time bound (i.e. limited to the lifetime of the corresponding activity). One key question to ask when establishing an output indicator is “what will be produced by the activity being measured?”
Step 5: Build results indicators
A results indicator measures the results of activities in terms of their contribution to corresponding targets. Thus, it is closely associated with targets.
Step 6: Identify the desired impact
An impact indicator sets a longer term perspective and provides insights on the effect that one or more key activities have on the priority policy and, ultimately, on the strategic objective. Impact indicators are particularly difficult to develop because attribution or causality is hard to establish - i.e. making a direct and complete link between the
Box 1.2. OECD Principles of Performance Management: From setting objectives to measuring results - A seven-step process (continued)
activity’s impact and policy objective can be difficult. This is because other factors, often not within the control of government, may be involved with meeting a strategic or policy objective. Thus, it may be more rewarding and appropriate to identify the desired impact - the desired impact of an activity on a priority policy and, more fundamentally, the desired impact of a priority policy on a strategic objective. Such a conversation can: 1) help focus policy thinking by providing a framework or an orientation within which other decisions can be taken; 2) inspire extended institutional and individual effort (OECD, 2009).
Figure .1.3. Illustration of the seven-step methodology
Step 7: Identify appropriate qualitative research methods
There are many approaches to determining the effectiveness of activities and/or priority policies. Output, result and impact indicators may signal problems and trigger governments to “dig deeper” to find the causes of the problem and identify the appropriate actions. Qualitative research methods can add value to the indicators and an understanding of policy effectiveness. Such research methods can include case studies, focus groups, interviews and reviews (e.g. OECD peer reviews).
Source: OECD (2013), Poland: Developing Good Governance Indicators for Programmes Funded by the European Union, OECD Public Governance Reviews, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264193543-en.
The CORA reform is being implemented according to the objectives set out in the CORA report, taking as its aim to “increase the quality of public institutions in the long term”, but it is still based on short-term considerations and too limited in its perspectives on streamlining and rationalisation. No relevant medium- and long-term vision instruments of performance measurement seem to have been introduced, or at least made publicly apparent.
Strategic foresight presents the advantage of not being bounded by traditional demarcations between agencies or issues. Foresight helps to foster the whole-of-government approach “by looking at issues that crosscut ministerial boundaries”. This should take into account the government’s fiscal priorities, environmental and economic forecasts, social trends and the political feasibility of achieving a particular outcome.
But foresight teams should above all have the capacity to undertake high-level statistical analysis, horizon-scanning and to commission research and polling where necessary. Strategic foresight advice should be broad-based, and wherever possible backed up by empirical evidence, so that it can be contested and debated by others in the policy domain.
Some countries follow a centralised, CoG-based structure for foresight activities (e.g. France, the Netherlands, Singapore, the United Kingdom) while in other countries different departments engage in foresight activities (e.g. Finland, Germany, Italy, Switzerland, the United States) without necessarily being co-ordinated. They can act independently based on their subject matter and policy area. Countries, however, may still have an integrated vision document for strategic foresight which guides the activities of different foresight offices located in different ministries (e.g. Sweden).
The experience of Sweden with the Commission on the Future (Box 1.3) is worthy of special mention, as it identified Sweden’s challenges in the longer term (2020 and 2050). It was considered to be an important step in the ongoing work of shaping a policy for the future of the country and also paid attention to the public sector.
One of the biggest challenges observed in different countries is the integration of the results of foresight (or of the practice itself) into policy making; countries tend to focus on short-term goals without a clear connection with the long-term approach that is typical of foresight exercises.
Box 1.3. The Commission for the Future of Sweden
In order to identify the challenges that Sweden will face in the longer term (2020 and 2050), the government appointed the Commission on the Future of Sweden (Framtidskommissionen) in the autumn of 2011. Over a period of a year and a half, the commission spoke with and listened to different stakeholders across the country including civil society, the private sector, local government, government agencies, individual researchers, non-governmental organisations and others.
The work of the commission focused on challenges related to sustainable growth, demographic development, labour market integration, democracy, gender equality and social cohesion. However, the aim of the final report was not to offer proposals on how future challenges are to be met, but rather to help shape future policies in Sweden. As an instrument of foresight, the idea is that identifying some of Sweden’s long-term challenges will contribute to a more future-oriented public debate, and enable the government, the Riksdag and other sectors of society to arrive at decisions at an early stage and thus ensure that Sweden can deal with its challenges in the best possible way.
Challenges were not considered by the commission as problems; they primarily referred to the consequences of the various processes of change in society - and in the world beyond Sweden - and Swedish policies, which can open up new opportunities. In this sense, it was vital for the commission to identify the future challenges to society in order to meet the “problems” head on and take advantage of the opportunities that lie ahead.
Regarding the public sector, the final report of the commission acknowledged that policy implementation is to a great extent the responsibility of the 234 government agencies and Sweden’s 290 municipalities and 20 county councils and regions, which enjoy a high degree of autonomy. This complex setting implies a challenge in terms of attaining the desired levels of co-ordination, co-operation and well-designed decision-making processes to ensure that education, healthcare, infrastructure and other public services will be delivered at high-quality standards. The report also studied the past, present and future trends in terms of expansion or decline of the public sector, concluding that having one of the largest public sectors as a percentage of GDP among OECD countries is a future challenge. It also included considerations on democracy and political parties and challenges related to corruption in the coming years (especially with regard to public-private partnerships and the local level).
Source: Government of Sweden, www.government.se.
This consists of building bridges between the different types of experts and professionals and overcoming the tendency to focus on specific interests/preferences, instead working together effectively to advance knowledge about the future and improve government readiness to effectively face future challenges.
It is about broadening the traditional scope of challenges on economic development and fiscal situation (what GDP growth focuses on) to encompass the multi-dimensional challenges that governments and societies are currently facing. Governments of OECD member countries have started to put in place mechanisms and have adopted reforms with the aim of restoring and improving their responsiveness to the needs of citizens and businesses (Box 1.4). Governments are called upon to demonstrate their capacity to govern in a way that meets the growing and changing expectations of citizens.
Box 1.4. Examples of foresight programmes
Australia: Australia has recently begun to use government foresight systematically. The Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia’s national science agency, has a dedicated team (CSIRO Futures) working on foresight in energy, transport and other fields. It produces “Our Future World”, reports on global megatrends updated every two years. Multiple other departments do some foresight work. Every five years, the Treasury department produces a report on long-term issues (40-year forecast) to help short-term decision making. The establishment of the Strategic Policy Network with representatives from every department, led by the Department of the Prime Minister and Cabinet, may impact foresight use for strategic policy.
Canada: Multiple government departments have used foresight, and this has increased over the last few years with the creation of Policy Horizons Canada (PHC), a centralised agency for carrying out foresight work and building foresight capacity in government. The PHC is headed by a high-level steering committee of deputy ministers and reports to the Privy Council. Parts of the Department of National Defence, including the Directorate of Future Security Analysis, use foresight for capabilities and personnel planning, primarily for internal audiences. Multiple other departments pursue some foresight work on economic, social and technological issues within their policy departments.
France: France has one of the longest-established foresight programmes in Europe, with policy-focused foresight services in almost every department. The Centre d’analyse strategique (CAS) works directly under the Prime Minister to advise on policy formulation and implementation. The Senate has a delegation dedicated to foresight to reflect on socio-economic transformations through scenario-building. The French defence department has a Delegation aux affaires strategiques (DAS), which carries out regular analyses of long-term international geostrategic issues.
Finland: Finland Foresight is well-integrated into Finnish policy planning. The Government Foresight Report, prepared through wide consultation by the Prime Minister’s Office, is prepared at the start of the mandate for a new incoming government. During the mandate, the Government Foresight Network develops a report on the Finnish policy-making environment and each ministry has dedicated staff to develop ministries’ Futures Reviews. The Finnish parliament’s also has a Committee for the Future to pursue and review foresight work.
Box 1.4. Examples of foresight programmes (continued)
Germany: Over the last 20 years, Germany has developed a decentralised mix of foresight projects in departments at federal and Lander levels. The Federal Ministry of Education and Research is the main government agency involved in foresight, including through its “Futur” project on research planning. At both the national and regional levels, particularly in Bavaria and Baden-Wurttemberg, foresight projects (both internal to government and by external agencies) study a wide range of technological, industrial and social science issues.
United Kingdom: Government foresight in the United Kingdom is dominated by the UK Foresight Office, a central government agency that reports directly to Cabinet, and is headed by the Chief Scientific Advisor. It was originally dedicated to technology and industry but now has a broader thematic mandate to look at challenges for the future, pursuing major foresight projects, horizon scanning and training activities across government. Separately, the Development, Concepts and Doctrine Centre and the UK Defence Science and Technology Laboratory do foresight and horizon scanning for the Ministry of Defence.
United States: Well-established but decentralised foresight programmes are scattered throughout the US government. Many agencies (state, Federal Emergency Management Agency, Defence, Treasury, Energy, Office of Management and Budget and especially the General Accountability Office) have strategic planning capacities that use foresight to varying degrees. The National Intelligence Council produces major Global Trends reports every four years. As the world’s foremost producer and user of foresight work in the last half century, the US military has an array of strategic planning and intelligence organisations, in which foresight work is well entrenched to inform planning.
Sources: Dreyer, I. and G. Stang with C. Richard (2014), “Foresight in governments: Practice and trends around the world”, Yearbook of European Security YES 2013, European Union, Institute for Security Studies, available at: www.iss.europa.eu/fileadmin/e uiss/documents/Books/Yearbook/2.1 Foresight in governments.pdf (accessed 7 September 2015); OECD (2015a), OECD Public Governance Reviews: Estonia and Finland: Fostering Strategic Capacity across Governments and Digital Services across Borders, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264229334-en.