Economics Department

Economic Survey - Slovak Republic 2004: Is the new institutional framework enforced effectively?

 

The enforcement of the new institutional framework necessitates more effective government…

What is required is a more effective and more reliable court system, including for the registration of new businesses and the handling of bankruptcies. Better staffed and resourced competition authorities to deal with predatory and other anti‑competitive practices, and credible sectoral regulators governing the energy, transportation and communications infrastructures are also needed to underpin a market‑friendly legal environment. Small enterprises which have no political leverage on the government to protect their property rights, and no direct bargaining power vis‑à‑vis incumbent utility firms need such a framework. Little progress has as yet been achieved in the governance of the court system, the credibility of the police and the assertiveness of economic regulators; and shortcomings are regularly reported in the implementation of various components of the new legal framework. The government is aware of these problems and new laws are being prepared on conflicts of interest in public office and the asset declarations of elected officials and civil servants. These efforts require time to obtain results, and the resistance shown by private interests needs to be rapidly overcome.

Internationally comparative performance in the judicial system

Perceived quality of public institutions*

* The range is between ‑1.5 (worst) to +1.5 (best).

Source: William Davidson Institute, World Bank.

…including in the areas of environmental policy and tax collection

There is a recognised need for less costly environmental policies, which will become more binding and more demanding, especially for small enterprises, in the course of EU accession. A wider recourse to economic instruments is advisable and this will require an improvement in public management capabilities. In the area of air quality which has been a serious concern in Slovakia, fuller recourse to emission charges and tradable emission permits would reduce regulatory costs. Another area where public management capabilities must be enhanced is tax collection. Wider use should be made of individual tax returns for a more integrated management of tax, welfare, family and other benefits and incentives. Finally, Slovakia’s ability to fully draw on available EU Funds for its public and infrastructural investments also depends on the quality of its public service.

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The complete version of the OECD Economic Survey for the Slovak Republic  is available from:

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