Introduction

Someone once said, if there was a red button to flush all the public sector down the toilet, he would push it. That someone was a friend of mine. He had negative attitude towards Estonian territorial reform and the claim was that it was performed recklessly and without the proper analysis or collaboration. But not only that. Doing something by doing nothing is the way of doing business in the public sector and it is totally wrong, was the way of his thinking. „It is completely unethical to cash your salary if you did nothing to earn it, or how do you think,“ he asked. Such a rigid claim, I thought.

But at the same time, when the type of allegations have risen, there might be something to look into. When to speak about the element of human capital in the public sector or any other sector, there is always room for the discussion about the ability to fulfill the expectations of the owner or the people – also to create value. In other words as the expectations exist, there are also obligations or responsibilities to fulfill or of what to be guided by. It means that when the question of fulfilling the expectations arise, there is some room for the talks about ethical behaviour of the labor force too. So when to analyse the claim made above, there are multiple components that need to be adressed.

I personally disagree with the claim, but as I’ve learned later, claims made to the direction of public servants and the ethics or responsibility are not so rare after all. As I assumed, these claims had to do something with the lack of understanding of the services of public sector. This would justify the link between „doing nothing“, „ethics“ and rigorus arguments about public servants.

But the question of value creation or other words productivity and it’s relation to the ethics of the public servants needs to be adressed further. The claim to flush down the public sector because of „doing nothing“ could be just as subjective as anything else you might assume but what proves to be quite different after all. Coalition between public sector and the people should be ethical and full of responsibilities, but is it really so and is the people really capable of evaluating it adequately?

To analyse the connections of abovementioned thopics as ethics, responsibilities and productivity of public servants and to give the assessment to the question if there are ethics in public sector or not, the concept of Estonian territorial reform is used.

The Link Between Ethical and Unethical

About two years ago Estonian government decided to launch a territorial reform to give local municipalities the chance to join and form new greater and stronger municipalities. The plan was to let them do it voluntarly. I thought it to be a major obstacle, because if one has a task to „eliminate“ an municipality, some stakeholders would never agree. How can this thought be used in discussion of the principle of ethics? For example if we take the residents of the municipalities out from equation for the second and focus to the people who work for the municipalities, we might find multiple conflicts of interests. Conflicts of interest and ethics are closely related.

When we have three municipalities to join to form one municipality instead of previous three, there would be remarkable changes for the people who benefitted before from theese municipalities. No longer will be there a job for three heads of the municipalities but one, no longer will be there a job for all the workers who worked there to this day. Consolidating will cost a number of people their job.

Why should someone join and eliminate municipalities just for losing their job? There has to be something else, and as I undestand, it is closely related to the ethics as well.

When I started to study the plans, pros and cons and all the framework, the purpose was to verify if the claim, made by my friend about the alleged unethical behavior of the public sector, was valid or not. I realized rather soon, that there was some amount of suspicion at that time. It did’nt take long to discover that the forming and joining of municipalities by the concept which was used, there were some aspects what motivated the people related to the reform to engage. These aspects were about the financial benefits.

As it is worked out for the reform to be successful and motivating for local municipalities, the law provides an opportunity to pay out some cash to the key players of the municipalities and the reform. All the heads of municipalities responsible of voluntary joining were a subject to be paid amount of 12 months salary. So if you do it for the money, maybe you make it happen without analysis, discussions with locals and because of wrong reasons, almost as my friend has said. If that was the case, it might not be ethical at all. Indeed this has very little to do with the responsibilities of the public authority and more to do with the personal interests of different persons. So as I understand, the line between the ethical and unethical in the case of Estonian territorial reform, can be rather slim.

People and the Higher Power

All the thoughts about different scenarios made me argue with myself. When we talk about ethics in public sector, we should talk about the people and the responsibilities given by the higher power – who is also people. So there would be no public sector if there were’nt the people to start with in the beginning. And there would be no ethics to talk about if there were’nt any conduct of service or responsibilities given to the public sector by the people.

Estonia gained it’s independence almost 100 years ago and as I’ve read from the history books, back then there were many responsibilities given to the government to deal with. To develop business environment, to work towards of productivity and ability to greate value, to make our goods atractive for export and so on. Yes, there were a lot of business related tasks and therefor responsibilities but not only. There was also a dream of a country who was a partner to it’s people.

Still to this day all countries have responsibilities and hence there are responsibilities what are given to the local municipalities. The probleem might be that all the responsibilities are taken care of the type of way that most or at least a lot of people do not notice them at all. So when to ask someone to name some public services, one might not know to point out none of them. So it describes perfectly, that there are responsibilities and there are probably ethically behaving people implementing these responsibilities but it is often invisible to the eye.

There are a few commercials in TV about public services, but a lot related to private business. It does certainly not mean that only private business create value. Public sector create it too. And the reason for public sector to do that is the people – the higher power.

When we talk about the abovementioned slim line between the ethical and unethical in the case of Estonian territorial reform and in the case of higher power, we can see the positive correlation. The pressure to launch the reform has been the subject to discussion for a very long time. At the beginning, there were a lot of problems that prevented the reform to be launced, but the main thing was, there was no agreement on how to join municipalities. Should it be made by some specific characteristics or not, and should it be made by the state or should the authority of doing that be given to the municipalities themselves. Second option would have been more democratic and in the present case it would have been more ethical in the sense of the expectations of the people – to be involved into the decision making in the project with the magnitude as the territorial reform inevitably is.

When the decision was made to let the municipalities join by themselves, it was clear, that there has to be some motivational system to cope with the possible conflicts of interests. There were fears that some of the people running municipalities involved would’nt agree to make decisions and initiatives what are needed to the reform, because these decisions are harmful for themselves (losing job). By not making decisions in the framework of the reform, these officials would have gone to the contradiction to the ethics and responsibilities of the public sector. So the state had to act to prevent that.

Opposite to the fears, that motivational package for the heads of the municipalities made them act unethical or unresposible (because they only wanted to get bonuses), it instead made it easyer for them to be ethical and act according to responsibilities of public sector. It was also consistent to the narrow timetable what was planned for the implementing of the reform. The financial bonuses for the stakeholders were to support the implementation of the reform but as well the subject to the best results possible for the people. It made the reform a lot more ethical.

Understanding the Arry of the Public Services

As the subject of ethics has been discussed for some extent, the subject of public services should be given some attention as well. Understanding the arry of the public services differs a lot in different target groups. The story begins from the past. All the building of the state and municipalities and the continious work of building social system with an wide arry of public services begun because of the people. The probleem is, that the seed of public services what was planted at the early 1900-s (in Estonia), what developed through war, cold war and the time of awakening, has grown to somewhat people even don’t understand nowadays. But should they understand? Offcourse they should, but nowadays, I consider it quite average to be unaware of things going around people. Things happen at the background all the time, no matter the private sector or public.

So when I recalled the thought of my friend accusing public workers unethically collecting their salary while doing nothing for the people, I started to realize that there is no proof of that kind of unethical behavior being applyed at our country. There are just too many invisible things and public services happening at the background for everybody to understand. If you are’nt the subject to use them yourself, you might not really know what they are. So I would better turn the question around and ask from the friend himself, if it was’nt unethical for him to be so totally uninformed about things going on around him.

Conclusions

In the paper the claim was made that coalition between public sector and the people should be ethical and full of responsibilities and it was argued if it really is. To analyse the connections of an ethics, responsibilities and productivity of public servants, the concept of Estonian territorial reform was used. It is clear that ethics, responsibilities and productivity or value creation are interconnected at least for some extent and all theese features are a part of the modern public sector.

In the analysis of the Estonian territorial reform and the possible conflicts of interests related to the financial bonuses given to the masterminds of the reform, it was found, that no ethical boundaries were violated. Opposite it was found that the reform was quided by the good faith of the ethics and public sector responsibilities.

As we saw, the idea of the territorial reform was debated for a very long time and the reform itself failed to succeed in the beginning. There were actual problems what held the decisions back and it had a lot to do with the probleem that the decision makers had to make decisions what were bad to themselves. When to take the narrow timetable of the present reform into account, some motivation to really give the reform a little push towards successful implementation, was neccessary. Sometimes it is nessessary to boost some types of motivation for the reforms to succeed.

At the same time providing bonuses made it possible for the people involved to act more ethically and to be more resposible. Without the bonuses, people managing concerned municipalities would have to make the decisions that are not beneficial for themselves nor the residents of the municipalities. Now with the bonuses they could make these decisions without worrying too much about their own or their family safety. It would be controversial to make decisions about joining municipalities when you lose your job in result of that. When some benefits are provided for you in result of making decisions like theese, the possible conflict of interests are smaller. It helps to make decisions what are better for the residents, not for yourself. It gives the boost to really analyze and take your time with things.

The core principle of the public sector is to make the wide array of public services accessible for the people. For that to be possible, public sector and people have to be partner in coalition. State is the higher power in the context of public services, but the people is the higher power in context of the politics. So all the public services are implemented because of the people and therefor the public sector itself could never be unethical. The responsibilities of the public sector definitelly exist and are more than likely followed. When to argue about lack of ethics or responsibility it could only be the case of individuals, not the case of the system of such. It makes a perfect sence, that there is a place for ethics and responsibilities in the coalition of the public sector and the people.

Keywords

Ethics; public sector; public servants; public services; value creation in public sector; Estonia; territorial reform; local municipalities; coalition.

Notes

Statistics about the public sector is from Statistics Estonia webpage www.stat.ee.

Information about Estonian territorial reform has been taken from the webpage of the Ministry of Finance haldusreform.fin.ee.

 

Risto Kask

Estonian Business School