Sources of inefficiencies in Greek public administration: the expansion of organizational structures

Written by Petros Katsimardos on .

MirrorsOrganizational structure is the foundation upon which all functions are based, thus affecting all aspects of organizational behavior both internally and externally. Organizations’ capability to achieve goals, optimize the use of resources and respond to -dynamically changing- environment demands, is largely depending on the form and characteristics of its’  structure.

Greek administrative system on the other hand, suffers from an ingrained structural deformation that hampers administrative effectiveness. The irrational way in which structures have been formed over the years, can be outlined by examining the current organizational sprawl. According to OECDs’ functional review (OECD, 2011) Greek central administration today consists of 157 General Directorates, 1.978 Directorates and 5.027 Departments, i.e. an average of almost 450 structures per Ministry[1]. Although this excessive expansion of organizational layout has repeatedly been pointed out in the past, it hasn’t been yet confronted. Clearly, “structural inflation” remains one of the most burdensome administrative issues, as it results in a waste of resources and implementation gap, when public policies are applied.

Having that in mind, it was not surprising that reduction of administrative structures became a priority issue in MoUs’ reform agenda, when financial crisis broke out. Negative impacts of structural sprawl on operational level, can easily be stressed in the following chart, which depicts the distribution of the number of departments according to their staffing (%), in central administration level. As it can be seen, 21% of current departments has no employees, 14% of the departments has only one employee, while 55% of total number of departments has three or less employees.


Chart 1: Distribution of the number of departments according to their staffing (%)


Source: OECD, 2011, Greece: Review of the central administration

Under such structural fragmentation, coordination of administrative task is unattainable, while administrative cost grows excessively, due to numerous managerial and personnel job positions that have been established to staff current structures. It is pretty obvious that existing understaffed structures are either unnecessary –as there is no task to perform, or has become obsolete- or ineffective, as they do not have the critical size to be efficient. Either way, organizational size of central administration is much bigger than needed. Break down of administrative work to fragmented structures, hinders coordination and steering of functions-actions towards coherent policy implementation and strategic goals attainment. Furthermore, control and evaluation of performance among various structures becomes impossible, since goal-setting, measurement and accountability can’t be applied unless organizational structures have sufficient resources to address the assigned tasks.

But then a question is raised: if structural formation is so defective why it remains unchanged? The answer to this question emerges from the fact that despite the systemic nature of the problem, previous efforts to confront it were disjoined and one-dimension oriented. In other words, interventions to rationalize administrative structures, failed to see systemic interrelations and interdependencies “behind” the typical organizational charts. Thus, inherent tendency of bureaucracy to expand, kept intercepting rationalization attempts. A brief description of such cause-effect liaisons highlights the complexity of the issue.

Firstly, political system is benefited from organizational sprawl. During the last two decades there has been no significant change in Cabinets’ size (consisted of minimum 40 members, from 1990 till today), reflecting the need to address political or party vested interests. Given the high number of ministers, deputy ministers etc, it is rather unrealistic to expect that the number of organizational structures underneath their command can substantially be reduced. Moreover, establishment of new organizational structures proved convenient, as a method to by-pass restrictions of personnel recruitment posed by ASEP legislation from the middle 90’s till nowadays. At the same time, public administration itself[1] has always been eager to promote structural expansion, as a mean to serve vested interests of the bureaucrats. In brief, as long as clientelism culture prevails, a pressure to multiply organizational structures -despite cost increase and functional inefficiencies- is expected to rise both from the top and the bottom of administrative pyramid.

Besides bureaucrats and politicians’ incentives, there is a number of institutional and organizational problems that escalate -or fail to moderate- the inherent tense for structural growth. These problems are related to:

a) The fact that organizational structures and their function, are not connected to ministries’ budgeting. Funding of existing structures is taken for granted due to the current budget formation and execution procedure. Since there is no need for a minister or a manager to justify - or to decide for - the funding of ineffective or obsolete structures within ministries, there is no motive to eliminate or merge them.

b) Greek public administration lacks tools to evaluate operational outputs. Thus, even if there was a motive or will to do so, detection and elimination of ineffective structures would have been unattainable.

c) Building dispersion, together with ICT deficit and interoperability weaknesses, creates additional demand for structures with supportive functions so as to address functional autonomy needs.

d) The fact that due to established organizational culture, ministries are functioning in a silo based logic.

e) Institutional framework and organizational legislation is fragmented and rigid. Organizational structures cannot timely adjust to rapidly changing environmental conditions. Re-distribution of competencies and structures between ministries, ends up to an arbitrary split and “cut and paste” exercise which only amplifies organizational size and structural overlaps.  

The above presented systemic approach, defines the scope and type of actions that should be undertaken to effectively confront “structural distortions”. A systemic attempt to rationalize central governments’ organizational structures should include:

a) The reduction of the number of structures with supportive functions and the enhancement of structures with executive functions. Complementary actions should include a coherent upgrade of ICT applications to restore or reinforce horizontal communication and coordination.

b) Establishment of strategic and operational planning functions in order to enable goal-setting, measurement and performance evaluation procedures to take place.

c) A spatial concentration plan, so as to reduce both transaction and financial cost and allow economy scales to develop.

d) Uplift of constraints related to mobility of personnel so that staff re-allocation to organizational structures according to real needs, will become feasible

e) Establishment of new institutions and methods concerning organizational law amendments by setting organizational design principles, in order to eliminate the possibility of anew proliferation of structures.

Should these reforms take place, a new flexible structural formation will occur. Then leaner and more flexible organizational structures will reinforce central administrations’ capability to optimize the use of its resources and timely adjust to environments’ changing needs. Thus, rationalization of structures is both a necessity and a challenge for administrative reform, aiming to develop a modern, efficient, post-bureaucratic organizational model.

[1] As a distinct organizational entity, which acts in order to serve the interests of its members

[1] Mapping of structures included 15 ministries and the centre of government (consisting of the General Secretariat of the Prime Minister and the General Secretariat of the Government). Decentralized structures are also included.