The NRRP as a driver of managerial innovation in public institutions. Preliminary assessments, comparative analysis and lessons for the future

di Luigi Fiorentino* ed Elisa Pintus**, Editors

* Office of the Chairman of the Council of Ministers

** University Aosta Valley

The thematic focus of this issue proposes – after a period that is believed to enhance the field experience of practitioners and the evaluation capacity of scholars – an initial reflection around the National Recovery and Resilience Plan (NRRP) that began with the second issue of 2021. With this issue, RIPM’s challenge is to direct scholars at exploring the implementation of the Italian and other member states’ National Recovery and Resilience Plans, with a focus on coordination, management, implementation, monitoring and control systems. In addition, we wish to investigate modellable technicalities in relation to the achievement of agreed, ex ante and time-bound qualitative milestones and quantitative targets.

At any rate, the system for regulating the behaviour of institutional actors using the NRRP is being refined and adapted. This makes sense, given that it was established at a peak of a serious healthcare emergency. In this regard, consistently with Art. 22 of Regulation (EU) 2021/241, in order to ensure the protection of the financial interests of the Union, it is important to emphasize that, at national level, the management and control system outlined by each central government administration in charge of interventions for the implementation of the NRRP is inspired by the management and control systems of the European structural and investment funds and is geared towards prevention, detection and countering of the main threats to the protection of the EU Budget and the sound and proper management of financial resources, with specific reference to serious irregularities such as fraud, corruption and conflicts of interest, as well as the risk of double financing.

The entire audit system is, therefore, of considerable importance in the architecture of these “performance based” programs.

The analysis of experience in the field undoubtedly allows to propose a state-of-the-art assessment, new proposals on management tools that can enhance complex projects such as those that define the technical infrastructures of the NRRP. In addition, this Special Focus can be an arena for proposing new interpretative keys at a critical historical moment that requires a rigorous and responsible contribution by scholars and experts who intend to propose a real innovation.

The implementation of the National Recovery and Resilience Plan (NRRP) is a challenge that involves areas of decision-making by policy makers, the administrative bodies and public management that is “exposed” beyond measure throughout the unfolding of decisions but also in their implementation and will be so until the end of 2026 when an overall evaluation will be made. This feature, the NRRP duration, allows to evaluate the work of the institutional actors involved. Such evaluation is performed at regular intervals and offers an almost unlimited field of analysis about the efficiency and the cost-effectiveness of public institutions in the implementation of investments aimed at revitalizing the economy even at international level, given the total number of participating countries.

The NRRP is an extraordinary opportunity for scholars, first and foremost, to debate the current coherence of governance models of public institutions. In fact, the Plan’s mission has often been likened to the post-World War II reconstruction, similarly to the “Marshall Plan”, as evoked by policy makers and scholars alike. The range of action of public administrations is very broad, from determining cross-cutting reform processes to new institutional lines, to the configuration of organizational and management models, to the structuring of models for controls, auditing and evaluation of the work of individuals and public institutions involved in the implementation of the NRRP.

In addition, the overexposure, including in the media, of NRRP decisions is translating into mechanisms for engaging stakeholders who, structurally, can be characterized as essential institutional players in making decisions, in line with the most advanced models of public open gov type’s institutions; they are taking on an increasingly greater weight with respect to decision-making processes.

At first sight, the implementation of the NRRP is characterized by multiple criticalities, due to the difficulty in determining, at the level of individual public administrations, starting with the central ones, a “concrete planning” effort that would require an unblocking of the administrative bodies , which remains the engine not only for the orderly and timely implementation of the NRRP, but also for adequately redesigning the relations between power, citizens and the production system.

A possible risk is administrative inactiveness – a defensive approach to decision-making – that prevents or greatly slows down the change that is instead desired and needed with the NRRP.

In fact, despite the effort shared by all levels of government, there is a lack of management fluidity needed to meet the planned timeline. On the contrary, weaknesses should be addressed urgently to avoid a dangerous slowdown in the revitalization and innovation undertaken with the NRRP.

The Public Administration (PA) seems to suffer from a structural inertia, often mystified by calling the PA resilient or attentive to path dependence type logics, also due to the increasing conflict in the politics-administration relationship.

The resulting rigidity and exacerbation of positions can result in longer, less linear and – often – blocked decision-making processes. This weakens the national and European cohesion climate that is instead crucial to implement the NRRP.

An extraordinary project such as the NRRP requires all political, economic and social forces to make an equally extraordinary effort of a shared vision on fundamental decision-making areas.

The stakes determined by the NRRP goals require policymakers, and their institutional decision-support infrastructure (task forces, commissions, working groups, dedicated organizational units, etc.), to establish planning and decision communication mechanisms that are linear and consistent with the decisions themselves and – hopefully – shared with as many stakeholders as possible.

The ‘announcement’ effect, quite common for public institutions to gain external consensus, cannot be used unscrupulously.

If acquiring consensus is an enduring condition of public bodies life, in public institutions the announcement effect requires the ability to balance the needs of diverse stakeholders by arriving at policies and actions deemed mutually beneficial both within individual institutions and with reference to the environment outside them.

Certainly, the dynamics of consensus are influenced by the announcement effect as expectations are generated by virtue of programs, intentions, and promises to stakeholders. An unscrupulous use of the announcement effect risks fostering dissatisfaction about outcomes, creating counteractions or resistance from those who feel threatened by pre-announced decisions.

Ultimately, in an environment that requires rigorous planning and communication tools, it is necessary to control the announcement effect as a structural feature of public management.

After structuring and defining the NRRP framework, as discussed in the dedicated editorial and Special Focus of the last RIPM issue – it is desirable to move on to the consolidation phase of the administrative activity.

Consolidation can be developed by determining some basic trajectories.

First, a new approach in recruitment, selection and personnel development processes must be defined. It should be based – as envisaged in Italy by the recent Guidelines of the Civil Service Department – on the enhancement of personnel policies. This involves combining the traditional skills of civil servants with essential, indispensable skills like digitization, project and performance management, control, reporting and auditing, and teamwork.

Second, the staff – both those hired for the NRRP and existing employees – should be motivated and supported through a continuous drive toward a management and organizational culture that adds up to the juristic approach.

The realization of NRRP goals, between now and 2026, requires a sound ability by the administration to become a co-promoter of public policies.

A third element that requires specific attention for implementation stems from the interpretation of the role by central governments, particularly the Prime Minister’s Office and the Ministry of Economy and Finance.

They play, it should not be forgotten, a fundamental role in defining and consolidating the NRRP trajectory. It is a continuous stimulus and specific support, as well as the ongoing verification of results and of the impact of public policies to characterize the intervention of the central government, which, moreover, enhances a use of the announcement effect as a real specificity of the PA’s lasting action over time.

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This issue continues, from a different angle, the reflection already begun around the National Recovery and Resilience Plan. In particular, it emphasizes the time factor, namely the year of experience gained in the field. The contributions in the “Special Focus” section thus explore the implementation of the NRRP, focusing on the systems of coordination, management, implementation, monitoring and control.

From this perspective, the first contribution, entitled “The Governance of the National Recovery and Resilience Plan: Critical Issues and New Perspectives,” takes governance as a “privileged angle for investigating the NRRP as a driver for innovation in managerial terms for public institutions.” After analyzing structural and functional aspects of the Plan, it examines some of its critical issues, including “the effects on the dynamics of the Italian form of government”; it notices a strengthening of the Prime Minister’s powers of direction and coordination at the expense of the Council of Ministers’ function of determining general government policy. Such centralized governance, the articles notices, should be mitigated by improving the ex ante and ex post monitoring and evaluation function, as well as legislative planning, of the Parliament. Equally interesting is the analysis of the “impact of the Plan on the relationship between technique and politics.” With regard to the Plan’s decision-making process, “marked by a top-down set-up in which the owners are exclusively the ministerial administrations,” the article investigates the impact on the form of the State, in particular on the relationship between the State and the Regions; it points out that it is necessary to adopt, in pursuit of the goal of reducing territorial imbalances, “a cooperative approach to encourage the participation of regional and local autonomies in the implementation of the Plan” itself. For the purposes of the effective implementation of the interventions envisaged in the Plan, “alongside the definition of an adequate governance system,” the importance of improving the quality of the administrative action is recalled. In addition, the Author (Giachetti Fantini) identifies digitization and interoperability of processes and services as a “fundamental tool for achieving” the NRRP’s goal of increasing “the efficiency of the public administration and its decision-making capacity,” stressing the relevance of “the creation of databases of national interest.“

The second article in the Special Focus, entitled “The NRRP as a Propeller of Managerial Innovation in Public Administration,” offers an updated overview of techniques for reporting, managing and monitoring the Italian Plan. In particular, it focuses, according to a multidisciplinary approach (“especially legal and economic-business”), on how it is able to “positively impact processes, managerial innovation and ultimately the results obtained by the PA.” It explores the four pillars (access, skills, good administration and digitization) along which the PA reform has been set up. It analyzes the “main managerial techniques – total quality management, project management techniques, management by objectives and management control – all borrowed from the experience of private companies, which have the primary intent of better organizing and directing the administrative action of the PA.” The Author (Galasso) concludes by stating that “the challenge of the PA managerialization cannot be reduced to the mere introduction of new management techniques or to a targeted and prudent management of funds derived from the NRRP, but should instead be interpreted as an attempt aimed at changing the organizational culture of public bodies.” In this regard, it identifies “some directions of change” regarding “values, attention and sensitivity that should permeate” the PA: “culture of management measurement”; “culture of objectives and results”; “culture of comparison”; “culture of motivation”; and “culture of service.” With respect to these “cultures to be promoted,” he reiterates the crucial role of management systems, “if properly designed and employed.” And, continuing the analogy with corporate experience, notably recalling the organizational theory, he adds that “an organization without dedication (of people) is like a person without a soul: it operates, but has no life force.” Such force “together with digital technologies and shared governance” are, in the author’s view, “the driving force behind the transformation in a managerial sense of the public administration.”

Taking up the challenge of the Call for papers, the Special Focus third article, “The search for synergies between structural funds and recovery and resilience plans. A comparative analysis between Italy and Spain,” explores the measures taken in the recovery and resilience plans of two member states, Italy and Spain. Prior to this comparative effort – the potential of which is “ensured by the socio-economic peculiarities that the two countries share” – the paper provides a theoretical and operational framework of the “challenge” of maximizing synergies between European instruments in order to “analyze the possible coordination solutions promoting an effective interaction between cohesion policy resources, specifically the structural funds, and the funds of the Recovery and Resilience Facility,” of which, moreover, it frames their respective characteristics in terms of differences and similarities. After all, this complementarity and synergy – analyzed with respect to the two case studies – is one of the elements that member states “had to obligatorily include within their respective recovery plans, consequently representing the subject of the European Commission’s evaluation and the opinion of other European institutions.” In this regard, the analysis of the two national recovery and resilience plans shows that “neither Italy nor Spain decided to extensively explore the issue of coordination directly within their plan.” According to the Author (D’Onofrio), the maximization of synergies between the use of structural funds and the expenditure of resources of their respective plans is a challenge to which Italy and Spain – which respectively represent the first and second Member State in terms of funds allocated by the Recovery and Resilience Facility – will have to respond promptly, making up for any deficits in the planning of coordination measures during the implementation phase. In this sense – according to the author – the “sharing of best practices implemented by the various European countries will be a crucial factor in achieving effective integration between the two instruments.”

The Dialogues section features the essay “Cultural Innovation in Public Administrations”. Its approach revolves around “the assumption that organizations, including public organizations, are social systems that develop their own culture over time.” Therefore, public administrations, like businesses, “should look at innovation by taking into account the cultural conditions that influence organizational action.” Such conditions are the result of the social interactions that develop within each organization. The Author (Bolognini) argues that “a public manager cannot act alone but needs a strong support from training and research centers such as the National School of Administration and schools at regional level, as well as from universities, so as to foster both the spread of skills consistent with developments in contemporary organizational thinking, and the collection of data and information from studies and research related to the implementation of organizational innovation projects.” He concludes by arguing – in line with a quantitative strand of research (of the study of organizational culture) – that the collection and processing of data, such as those in the article, can be a “basis to expand knowledge of the tools implementing innovation strategies.”

The section also contains an article “An Example of Shared Governance: the Health Information System” which aims at demonstrating the strategic centrality, in the public sphere, of the design and implementation phase of an IT project and/or database. In particular, according to the Author (Beato), “to govern digital processes in the public world, specific technicalities are not enough, but a careful reference to the institutional and governance contexts of the public administrations intended to manage these processes is necessary.” Therefore, good design and implementation becomes decisive where multiple institutional actors are involved, such as the state, regions and local authorities.” With this in mind, it analyzes, including by reconstructing its history, the case of the New Health Information System, implemented to support the multiple and complex aspects of our NHS. The study illustrates some good governance rules, which should be applied to all IT projects shared among different institutions of the Republic.

In the Close up section of the Journal, “The European Social Bonds of the Sure instrument for labor and income protection: a successful experience as a coordinated and united response to the pandemic crisis,” considers one of the responses to the pandemic crisis fielded by the European Union. After analyzing its objectives, mode of operation and (partial) evidence on the capacity of beneficiary countries to effectively absorb and use resources, the Author (Di Domenico) highlights the particular effectiveness and innovative scope of this financial instrument (temporary in nature, relying on a system of voluntary guarantees; it is characterized by the absence of conditionality), which can represent “an important reference with further positive spillovers, including the self-confidence aspect of member states in taking on loans and expenditures greater than they would have done in the absence of the instrument.” In other words, Sure’s successful experience in terms of pandemic crisis response, which will be confirmed in the overall framework (due in March 2023) on the use of the instrument, can “represent a benchmark to aim for in the case of exogenous shocks that require a coordinated and united approach, of a solidaristic nature but with mutual benefits and non-negligible externalities and spillover effects at the level of the EU as a whole and of country-systems.”

Taken as a whole, the contributions in this volume, with different points of view and a wide range of insights that blend theoretical and technical-specialist approaches, renew RIPM’s attitude to listening (with which vision is combined), and “mobilizing ambition”, in their measuring themselves against real world situations, recognizing the complexity of the action of public institutions and proposing fact-based innovations.