IVA's President: Some thoughts on Government Agencies

Dear IVA Friends, 

As a Swedish citizen with a diverse background from Germany, the US, and China, I would like to highlight a feature of Sweden I admire: our efficient (and at times rather dry) government agencies. Having experienced bureaucracies in several countries, I can say that Swedish public administration stand out. The accessibility, transparency, and efficiency of public authorities are qualities that people and businesses in other countries rarely enjoy.

For over ten years, Sweden has been at the top of international and European innovation rankings – a topic I have written about before, highlighting our tolerant society, our inherent curiosity, and our respect for science as sources of this success. Another important and sometimes overlooked reason, I believe, is our stable and efficient government agencies, as well as citizens' trust in them.

According to the Swedish Agency for Public Management, Swedes' trust in public services has been very high over the past decade: more than 65 percent have great confidence in the Swedish Tax Agency, for example. And while there is less confidence in some other agencies, the Swedish Patent and Registration Office, the police, the courts, universities, and the armed forces are all well above 50 percent, and confidence in them has grown over the past ten years.

IVA's R&D barometer, presented last week, gives Swedish government institutions high marks from business research managers, particularly for the stable legal system and patent protection system.

For comparison, we can look across the Atlantic. The absence of an approved federal budget has shut down one quarter of the US government. Today, November 4, marks day 35, which means that President Trump has broken his own record from 2018/2019, when agencies were shuttered for 35 days at the turn of the year. Among those affected now are the State Department, the Treasury Department, the Justice Department, and the Department of Homeland Security. 800,000 federal employees are without pay.

It is no exaggeration to say that effective government that enjoys public confidence is crucial to Sweden's future competitiveness.

But let’s also be aware: We are living in a time that is fundamentally different from anything since World War II. We have war in our immediate vicinity, and Sweden's security is threatened. The rules-based global order has been shattered, and the leaders of the US, China, and Russia could at any time make decisions that affect us. There is great uncertainty. Add to that the ultra-fast pace of technological development and its effects on productivity, innovation, and the labor market.

That is why we cannot just go on as before.

Thanks to the foresight of statesman Axel Oxenstierna, whose gave us the Swedish administrative model four centuries ago, we have benefitted from independent public authorities and decentralized power. This model has served us well.

But does it still do so today? Not as well as it could, I would say, highlighting what Kristina Alvendal, one of two national industry coordinators, said last week at the newly established Acceleration Office for the green transition.

Alvendal sees several systemic flaws in Swedish administrative practices. First, the authorities do not measure time, which can make procedures exceedingly slow and create problems for companies. She also notes how agencies fail to coordinate with and even contradict each other in decision-making, which is also a drag on the system. This is consistent with what I have heard from industry representatives.

I share this view. And there are other problems: A silo mentality and overlapping responsibilities among public authorities are issues we must address.

The Swedish administrative model is also poorly adapted to decision-making processes at the EU level. Sweden is regularly represented by agencies rather than ministries in negotiations, unlike other member states. This may seem like a minor detail, but in practice it means that Sweden often loses out in tough negotiations, as the full mandate and overall picture rests with government offices and not with the independent agencies. Therefore, these decision-making processes must also be developed and ultimately adapted to the fact that Sweden is and will remain an EU member state.

The explanation can be traced back to Axel Oxenstierna's establishment of independent government agencies with decision-making powers. This model has served Sweden well over the years. But now we need an “Axel Oxenstierna 2.0.”