This chapter defines innovation and participation and describes the report’s assessment methodology including the OECD’s Innovative Capacity framework and methodology for citizen and stakeholder participation.
Innovative Capacity and Participatory Policymaking in Armenia
Abstract
To unleash the potential of innovative and participatory methods, the public sector needs a systemic approach to innovation and participation. Without it, motivation to work in innovative and participatory ways often crumbles in the face of organisational culture, resource constraints, lack of autonomy to act, time pressures and path dependency (Kaur et al., 2022[1]). This report leverages the OECD’s Innovative Capacity Framework to identify barriers and opportunities for innovative and participatory methods in Armenia, and to have a systemic understanding of capacity for innovation, including participatory approaches.
Meaningful citizen and stakeholder participation, defined as all the ways in which stakeholders can be involved in the whole policy cycle and the design and delivery of public services, is an essential element of good governance. Today's citizens are well-informed and are asking to be involved in developing the policies and services that directly impact their lives. The OECD developed a “ladder” of citizen and stakeholder participation to expand upon the ways relevant actors can be involved in public decision-making. The 2017 OECD Recommendation of the Council on Open Government (OECD, 2017[2]) defines them as the following:
Information: An initial level of participation characterised by a one-way relationship in which the government produces and delivers information to stakeholders. It covers both on-demand provision of information and “proactive” measures by the government to disseminate information.
Consultation: A more advanced level of participation that entails a two-way relationship in which stakeholders provide feedback to the government and vice-versa. It is based on the prior definition of the issue for which views are sought and requires relevant information, in addition to feedback on the process's outcomes.
Engagement: When stakeholders are given the opportunity and the necessary resources (e.g. information, data and digital tools) to collaborate during all phases of the policy cycle and in service design and delivery (OECD, 2017[2]).
The 2022 OECD Guidelines for Citizen Participation Processes provide an overview of the different formats by describing steps for designing, planning, implementing and evaluating a citizen participation process, and discussing different methods for involving citizens including information and data, open meetings, public consultations, open innovation, citizen science, civic monitoring, participatory budgeting and representative deliberative processes (OECD, 2022[3]). Some ways governments can engage and involve stakeholders in public decision-making include:
Permanent mechanisms: Consultative bodies, committees, and councils can provide a consistent platform for dialogue and allow stakeholders to have a say both in the early stages of policy proposals and in implementation and monitoring. Armenia has established several consultative bodies on sectoral policy areas, for example, the Council on Women’s Affairs, the National Minorities Affairs Council, and the National Commission for Persons with Disabilities. Moreover, civil councils were created adjunct to public bodies to allow civil society organisations to meet with public officials to discuss policymaking and service design and delivery relevant to their area of work.
Working groups: Public bodies can also establish ad hoc working groups for specific objectives, for example to gather feedback on draft legislation or to ask stakeholders to support the development of strategies, policies, and programmes. A notable good practice in Armenia is the Anti-Corruption Working Group, created to develop the Anti-Corruption Strategy and its Action Plan for 2023-2026.
Public consultations: Hosting in-person and online public consultations is essential for a diverse range of stakeholders to have an opportunity to share their knowledge and expertise. This could be discussion groups, workshops, roundtables, and other fora.
Digital platforms: Governments are embracing digital tools by establishing online platforms and portals to allow citizens to be informed and engaged in public decision-making at any time. Some examples in Armenia include the e-request platform, the e-petition platform, and the e-draft platform.
Petitions: In many countries, citizens and stakeholders can initiate and sign petitions to bring certain issues to the attention of the government. In 2023, the first civil legislative initiative was launched and delivered to the National Assembly in Armenia.
Participatory budgeting: When citizens and stakeholders are involved in budgetary processes they can support public officials in determining the needs of the people and communities that they serve. In Armenia, there is considerable interest in the value of participatory budgeting, especially at the local level.
Public sector innovation, defined as “the process of implementing novel approaches to achieve impact” (OECD, 2017[4]) can range from using the latest technologies to improve efficiency to user-centred approaches to design policies and services. For example, public sector innovation could include:
Leveraging new methods such as strategic foresight in strategy design to anticipate and plan for better futures (e.g. Lithuania 2050 Strategy) (Lithuanian State Chancellery, 2023[5]).
Using user-centred design to develop government services that are aligned with user needs (e.g. digital service design principles – see Box 3.10).
Introducing sludge audits or administrative simplification methods to identify unnecessary bureaucracy and time-consuming processes that can be reduced or eliminated to save the time of public servants, the public and businesses (see Box 3.5: Innovative and collaborative service delivery: Life events approach).
Leveraging new technologies to delivery services, share data and link services together like the Municipal Management Information System in Armenia that enables 64 enlarged municipalities to provide services and conduct participatory processes.
Innovative capacity in the public sector is the “holistic ability for public sector systems (individuals, organisations, system and ecosystem) to work in innovative ways to improve public sector outcomes (e.g., user impact, satisfaction in services, trust in government, economic opportunities, access to education etc.)” (OECD, 2023[6]). Four questions are fundamental to assessing innovative capacity:
1. Purpose: What is driving the intent to innovate?
2. Potential: What determines whether innovative efforts are attempted?
3. Capacity: What is needed to carry out innovative efforts and integrate them into everyday practice?
4. Impact: How is the impact of innovative efforts understood and informing future practice?
The intersection of innovative and participatory approaches in the public sector
Public sector innovation and public participation are distinctly explored in the assessment, however these topics are closely linked. Firstly, public sector innovation and participatory approaches are linked by the use of similar methods. For example, public sector innovation initiatives often include participatory approaches such as co-creation, user research, stakeholder engagement and user centred design. Moreover, examples of innovation in the public sector can include common forms of citizen and stakeholder participation. For example, governments crowd-sourcing ideas from the public and introducing innovative mechanisms for public participation, for example, representative deliberative processes.
Secondly, public sector innovation and participatory approaches are linked by similar support mechanisms. For example, public sector innovation and public participation are both best supported with a mix of systems-change efforts designed to make the public sector more conducive to these types of approaches and to institutionalise these methods in the public sector, paired with explicit mechanisms designed to support bottom-efforts and build the pool of best practice cases (see Table 2.1).
The below table showcases common mechanisms used to support public sector innovation and public participation.
Source: (Kaur et al., 2022[1]).
This report is based on triangulated insights from the following research activities:
1. An extensive literature review of existing data and literature on participatory and innovative policymaking in Armenia.
2. Survey modules targeting four different audiences (Box 2.1).
3. Targeted workshops and focus groups with public servants and leaders, members of a growing community of innovation and participation enthusiasts, representatives of civil society organisations.
4. Interviews with key actors across the public sector, development space and civil society organisations.
5. Validation workshops with representatives of the public sector and civil society.
The survey data presented in this report are produced based on three different survey modules sent to three different target groups:
National level public servants (over 2500 complete responses and over 5550 partial responses);
Heads of public sector organisations (over 75 complete responses and over 120 partial responses); and
Representatives of civil society organisations (27 complete and 22 partial responses).
The results are often shown with three primary data points:
Armenia (ARM): Representing the average amongst survey respondents.
Innovators (INN): Representing the average amongst survey respondents who indicated having been involved in the design or implementation of an innovation in the last two years, according to the definition: “something new or novel to context, implemented, and aimed at achieving impact.”
Non-innovators / non-innovative (Non-INN): Representing the average amongst those who have indicated that they have not been involved in the design or implementation of innovations over the last two years.
Moreover, the survey results are often presented with a distinction between professional levels and policy sectors. The note section below each graph provides details the data source and survey question and Annex A provides the full quantitative analysis.
Source: (OECD, 2024[7]).
The data from the Innovative Capacity Survey, shared with national-level public servants, reveals how innovative capacity factors affect likelihood to innovate. The analysis uses the binary variable “having participated in an innovation” as the dependent variable, and independent variables such as perceptions of skills, organisational support, motivation, permission to innovate, risk appetite and drivers of innovation. The below figure shows potential causal determinants of innovation, with red bars indicating negative effects and blue bars indicating positive effects, all of which are statistically significant at a 95% confidence level.
Factors such as cross-government collaboration and extrinsic motivation, are associated with a decreased likelihood of innovating, showing potential issues in the existing collaborative mechanisms and incentive structures. Meanwhile, factors such as skills in digital technology, a drive to improve efficiency, and availability of technology for innovation are associated with increased likelihood of innovating – showing the importance of these factors in creating a positive environment for innovation. See the full analysis on Annex A.
The figure below shows the percentage point change in the probability of participating in an innovation in response to various organisational supports, motivations, skills and drivers. This analysis shows that technology for innovation and skills in evidence and data are the strongest influences on likeliness to innovate.
Note: The figure shows the most robust determinants of self-reported innovation in the Public Sector in a logistic estimation that controls for individual characteristics, and organisation fixed effects. All estimations are odds ratios and depicted variables are statistically significant at 95%. Variables derived from literature categorisation and based on OECD Innovation Capacity Survey questions are depicted on the x-axis, while individual characteristics such as gender, age, tenure, and role which also may be statistically significant, are not shown.
Source: (OECD, 2024[7]).
Armenia’s public sector innovation capacity is still in the early stages of development, despite some recent examples of promising innovations.
Key drivers for public sector innovation are present: governmental strategies make clear the impetus for innovation and individuals are motivated to innovate to improve outcomes for citizens, despite extrinsic incentives (e.g. bonuses, career progression) that potentially disincentivise innovation1. Moving from innovative ideas to implementation remains difficult in Armenia, with a challenging operating environment where collaboration mechanisms do not work effectively, risk aversion is high and specialised skills for innovation low. However, efforts to build capacity through specialised teams, the PAR strategy and flagship projects demonstrate promise for the uptake of innovation in policymaking. Capacity to evaluate the impact of strategies, policies and services remains limited in Armenia: making it difficult to understand where innovation is needed most, measure whether innovations are working and spread lessons across the public sector. Opportunities to capitalise on strengths and advance in challenge areas are detailed in Chapter 3.
The following section summarises the assessment of each innovative capacity research question, presented in the innovative capacity heatmap (Figure 2.2). The heatmap and summary triangulate insights from all research activities outlined in the section Innovative Capacity Framework Methodology, including a survey of over 2 400 respondents which is detailed in Box 2.1. There is more information on these insights by thematic area in Chapter 3, with detailed evidence and global best practices.
The mapping of Armenia’s innovative capacity across individual, organisational and systems levels, highlights significant challenges in the potential and capacity for innovation and in measuring impact of innovation to understand its value and inform future efforts.
Note: This figure blends data from the surveys, interviews, focus groups and desktop research, providing a grade on each factor in the Innovative Capacity Framework Annex (Kaur et al., 2022[1]).
Source: OECD
Purpose: What is driving the intent to innovate?
Individual level – Managing
Many public servants in Armenia are motivated to innovate because they find it personally rewarding (intrinsic motivations), recognise the value (identified regulation) and want to improve outcomes to citizens and trust of citizens (OECD, 2024[7]). However, extrinsic motivations such as salary increases, promotions and awards to date are not associated with an increase in likeliness to innovate and at times appear to discourage innovation (survey analysis shows the presence of extrinsic motivators may decrease the likelihood to innovate by 16% (Figure 2.1) (OECD, 2024[7])2.
Organisational level – Managing
There is a strong drive for innovation from management at the organisational level. However, capacity to develop and implement effective sectoral strategies which drive and enable innovation is limited (OECD, 2019[8]) (OECD, 2024[7]).
Systems level - Embedding
The drive to improve efficiency and reduce costs is one of the most statistically significant drivers of innovation and could increase the likelihood of innovating by 39% (OECD, 2024[7]). (Figure 2.1)
Technological change and digital transformation appear to be strong drivers of innovation. Moreover, the PAR Strategy is cited as a driver of innovation across the public sector, notably in service delivery (life event-based services, e-service delivery) and public governance approaches (human resources, evaluation, strategic planning) (OECD, 2024[7]). Despite the security, health and economic challenges the government faces, these do not seem to be strong drivers of innovation in Armenia (OECD, 2024[7]).
Potential: What determines whether innovative efforts are attempted?
Individual level - Emerging
Many public servants perceive innovation to be difficult in their work environments, however, innovators noted that encouragement was important to provide license to innovate. Safe spaces for experimentation, tolerance for risk taking and lack of time were all cited as barriers to innovation. (OECD, 2024[7]).
Organisational level - Emerging
Lack of trust and collaborative culture hinder the potential for impactful innovation. Few deliberate supports exist to enable innovation, particularly bottom-up innovation mechanisms (e.g. innovation lab, dedicated teams, incubators etc.).
Systems level - Managing
An absence of key systems wide governance approaches to collaboration, public-private partnerships, human resource management, strategic planning and policy development make it difficult to embed innovation into the everyday workings of the public sector. Survey results show that cross-governmental collaboration mechanisms could be associated with a 30% decrease in likelihood to innovate (see Figure 2.1). However, the Centre of Government (notably the Deputy Prime Minister’s offices) is playing an important role in coordinating reforms and innovative initiatives in this space through the PAR strategy (Government of Armenia, 2023[9]).
Political fragmentation and instability can hinder continuity and appetite for innovative initiatives. This, paired with an absence of mechanisms and clear responsibilities for innovation across the public sector (such as a dedicated unit, strategy, innovation lab etc.), limits the ability to capacitate public servants and steer and sustain innovation efforts across the entire system, particularly innovation efforts that go beyond simple enhancements.
Capacity: What is needed to carry out innovative efforts and integrate them into everyday practice?
Individual level – Developing
While pockets of teams with specialised innovation skills are emerging, capacity building and career development opportunities are highly limited, particularly in innovation areas (service design, innovative procurement, innovation management, user-centred design, foresight etc.). Moreover, innovative attitudes, behaviours and mindsets are often lacking in the hierarchical public sector environment (OECD, 2024[10]).
Skills in evidence and data and digital technology are shown to increase the likelihood to innovate by 38% and 45% respectively, demonstrating the importance of investing in upskilling the workforce (see Figure 2.1) (OECD, 2024[7]).
Organisational level - Developing
At the organisational level, there is limited capacity for innovation management as most do not support a mix of innovation efforts through their strategic planning, risk management, budgetary processes nor operational models. There are some exceptions such as in the State Revenue Committee, Ministry of Finance and Ministry of High-Tech Industry where domestic resources and innovative project management methods such as agile are starting to be used.
Systems level - Developing
Recruitment and retention of talented staff with innovative skillets is one of the most fundamental capacity challenges. The absence of a systems-wide competency framework, recruitment criteria that recognise the importance of innovative skills, and frequent stock takes of the skills needed and existing gaps makes it difficult to ensure the competencies of the workforce match the operational demands of government (OECD, 2024[10]).
Shifts towards interoperability of data on IT platforms and digital service delivery through the e-services platform, Municipal Management Information System (MMIS) and life events portal are key steps to providing data and systems-wide platforms for innovation.
Dedicated mechanisms for innovation across sectors and institutional boundaries such as innovation ecosystems are largely absent, including opportunities to collaborate easily across sectors and procure innovation. Establishing explicit innovation supports that encourage bottom-up innovation (e.g., innovation lab, idea contests) and backing these with resourcing could help build capacity innovation.
Impact: How is the impact of innovative efforts understood and how does it inform future practice?
Individual level - Developing
Public servants have very few deliberate opportunities for learning and self-reflection. While performance management assessments are routine, the performance management system is not linked to learning opportunities and is often viewed as a punitive mechanism rather than opportunity to grow.
Organisational level - Emerging
With no mechanism to evaluate and monitor strategies, policies and programmes of public sector organisations it is difficult to understand the impact of traditional and innovative efforts, understand key opportunity areas for innovation, address key gaps and learn from successes and failures.
Systems level – Emerging
Evaluation capacity in Armenia is currently very low, despite the existence of some guidelines on monitoring and evaluation. Efforts to create and implement guidance on monitoring and evaluation, planning and delivery and strategic governance are ongoing through refinements to the strategic governance system, however, capacity building and resourcing will be needed to support the roll-out of these initiatives. Furthermore, the internal audit function is week and is not leveraged to identify where innovation is needed and impact could be enhanced.
Few mechanisms exist for system-wide learning, sharing best practices and discussing lessons learned. Creating spaces for learning, through an innovation network, platform or other mechanisms
References
[9] Government of Armenia (2023), Appendix N1: 2023 of the RA Government: Public Administration Reform Strategy, Government 4.0.
[1] Kaur, M. et al. (2022), “Innovative capacity of governments: A systemic framework”, OECD Working Papers on Public Governance, No. 51, OECD Publishing, Paris, https://doi.org/10.1787/52389006-en.
[5] Lithuanian State Chancellery (2023), Lithuania’s vision for the future ’Lithuania 2050’, https://sena.lrv.lt/uploads/main/documents/files/LIETUVA%202050_strategija_dokumentas_EN%20(interaktyvi%20versija).pdf.
[10] OECD (2024), OECD Research Activities.
[7] OECD (2024), Survey on innovative capacity in Armenia.
[6] OECD (2023), Strengthening the Innovative Capacity of the Public Sector of Latvia, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/8d3102d9-en.
[3] OECD (2022), OECD Guidelines for Citizen Participation Processes, OECD Publishing, Paris, https://www.oecd.org/publications/oecd-guidelines-for-citizen-participation-processes-f765caf6-en.htm.
[8] OECD (2019), Baseline Measurement Report: Armenia, OECD Paris, https://sigmaweb.org/publications/Baseline-Measurement-Armenia-2019.pdf.
[4] OECD (2017), Fostering Innovation in the Public Sector, OECD Publishing, Paris, https://doi.org/10.1787/9789264270879-en.
[2] OECD (2017), Recommendation of the Council on Open Government, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0438 (accessed on 23 August 2021).
← 1. OECD survey results show that extrinsic motivations actually reduce the odds of innovation by 16% (p<0.05) (OECD, 2024[7]).
← 2. OECD survey results showed that current extrinsic motivators actually reduce the likelihood of innovating amongst public servants, showing potential flaws in the existing performance management, renumeration and rewards system (OECD, 2024[7]).