SECURING COMMON KNOWLEDGE AND VALUES IN DECENTRALIZED PUBLIC SERVICE TRAINING SYSTEM. THE CASE OF ESTONIA. Kristiina Tõnnisson1 Kaido Paabusk2 Abstract The paper will concentrate on analysis of different sides of decentralized public service training system as a factor for creating shared knowledge and values leading to better policy-making capacity. The authors employ available surveys, data and documents. The study shows that imposing values through decentralized system might be effective as well. Estonia’s experience has shown that it is not just formal structures and central controls that are required for establishing competent public service. Introduction In order to progress towards common aims, people need to have common visions, understandings and ideas. Shared values and knowledge of public servants are one of the preconditions for successful policy making and analysis. As Van Wart (1998: 319) states it “the art of value management for practitioners has already become the leading skill necessary for managers and leaders of public sector organizations…”. The current paper is trying to analyze how decentralized public service training system will affect securing common knowledge and values in public service. The authors try to identify if there are any significant obstacles for creating shared values in respect to civil service training system. The paper will concentrate on analysis of different sides of training system as a factor for creating shared knowledge and values leading to increased policy-making capacity. Does the decentralized public service training system hinder the development and implementation of effective policies? The evidence from the Estonian case study will support the central theme of the paper. The paper will address two main questions: 1) what effect does the decentralized public service training system have on creating or recognizing common knowledge and values? 2) how much do other organizational and environmental characteristics affect the process of value and knowledge creation? The authors will present relevant pros and cons of decentralized public service training systems and their impacts on establishing shared knowledge. The paper will base on Estonian case study and the authors will analyze the major changes in the last 7 years period (1996-2003) after the Public Service Act has been in place providing the results of the research and analysis of the process. The authors employ available surveys, statistical data and written documents analysis. Finally, the paper would like to draw conclusions how the current training system could be changed in order to improve the quality of policy-making capacity. 1. Factors Affecting the Creation of Common Values 1.1. Personnel System The personnel system of the public service is a central factor influencing the characteristics of training system. There are two main types of public personnel systems – the career system and the open system – both of which have its advantages and disadvantages (Auer et al 1996). A career system tends to require more centralized training system than a position based. The first one implies a system that offers training for entering the civil system and for career development inside the system before transfer or promotion. A post system does not make strict differentiation between the employment in 1 2 Researcher, University of Tartu, Tartu, Estonia Director (until Spring 2004), Center for Public Service Training and Development , Tallinn, Estonia 1 public or private sector because public servants are hired for a specific post. Employees can be recruited outside public service even to the very top positions. In addition, there are usually no special university degrees, exams or qualifications needed for entering public service. It is up to every single organization to decide what kind of qualification it demands from its officials. In a post system both initial training and training during the career afterwards depend much more on the position itself than on the fact that the position is in public service. United Nations Committee of Experts on Public Administration suggest that “in most developing countries, where the supply of highly trained staff is generally low, combined with weak institutional systems of checks and balances, the establishment of a career system would seem to be more likely to strengthen professional personnel management and the administration of the public sector” (UNPAN 2004: 21). Nevertheless, Estonian public service is “open” or “position based” system (Randma and Viks 2001). Only some branches of the administration are career-based: the foreign service, police service, court system, customs, etc. Based on the Public Service Act (PSA) that came into force on 1 January 1996, Estonian public service is decentralized. Most of the human resource management processes are delegated to ministries and administrative agencies. Decisions on personnel planning, recruitment, development and appraisal are mainly done at the organizational level through evaluation and competition committees of ministries and agencies. From other hand, recruitment of top officials is centralized where Competition and Evaluation Committee of Higher State Public Servants at the State Chancellery evaluates deputy secretaries general of ministries, directors general of executive agencies and inspectorates and their deputies. Although pay scales for basic categories of posts are set centrally in Estonian legislative acts, the remuneration system is decentralized, to a large extent. For instance, some public service organizations have introduced modern performance based salary systems, while others use more traditional ways remunerating their employees. Also pay levels differ substantially between different organizations, especially at the top positions. There are also few elements of a career system in general public service - reserve of officials, additional remuneration for years of service. At the same time, reserve of officials has not really worked in practice. Similarly, additional pay for years in service has not got many supporters at the political level. Quite likely new version of PSA, which has been stated as one of the priorities of Estonia's current government, will abolish this element from the salary system. Positive side of this open system is that it makes it easier to replace unprofessional civil servants inherited from soviet rule with more qualified specialists outside the public sector. At the same time, too open system makes it harder to settle the civil service values or motivate existing staff. That is why it is important for organization to carry out a mandate analysis to clarify the boundaries between what must be done, what could be done and what must not be done (Smith 1994: 41). “In the past one could clearly define a public service as applying a career system…or as applying a post system… Nowadays, however, governments seem to organize their public services by merging both the systems” (OECD 1997: 7). As current analysis shows, this is also the case in Estonia. 1.2. Inheritance from the Past Since civil service systems results also from administrative tradition and philosophy, these aspects should be taken into account as well while discussing common knowledge and competencies in public service. At the same time “the past” does not have always so much influence on the current situation or on the future as one might expect. “Thus, while we acknowledge, and indeed highlight, the influence of the past, this should be read as neither a path-dependent, nor a political-cultural, determinist interpretation of political discourses in post-communist countries…” (Dryzek and Holmes 2002: 259). From the other hand Drechsler (2000: 270) argues that problems of Estonian public administration are based on the lack of well-qualified, highly motivated civil servants based on special virtue or ethos, whereas, this special virtue is highly dependent on tradition. Since separation of powers did not exist during soviet time resulting in a system where legislative and executive functions were merged (Hesse 1997, Vanagunas 1999, Sootla and Roots 1999, Randma and Viks 2001), this “special public administration virtue” is still heavily missing. “All of this led to a situation where the real heritage of communism is not a hierarchical, disciplined public sector, but a chaotic free-for-all, where organizations often have legally defined autonomy, rights and 2 responsibilities, their staff and particularly managers feel certain informal ownership rights and the distinction between public- and private-sector mentality is blurred or non-existent in the eyes of most actors” (Beblavy 2002: 128). Although under the soviet rule ministries and administrative agencies existed, there was no public service in democratic sense. Public employees were supposed to be loyal to the communist party instead of citizens. It is important to emphasize that modernizing public administration can not be separated from how countries and citizens see the role of their state and what are the functions performed by public organizations. “The standards and conduct of public representatives and officials significantly affect the standing in which they are held. This in turn affects the confidence and respect in which governmental systems are held.” (Davis 2003: 222). Current Estonian public service is quite young and inexperienced, at least compared to their colleagues in developed countries. More than 50 per cent of the employees are younger than 40 years, while around 20 per cent are older than 50 years. At the same time, almost 2/3 of public servants have been working in public service organizations less than 10 years (State Chancellery 2004). This can be seen as a disadvantage but also as a possibility or as Hatch (1997: 94) says that “…the consequences for Eastern Europe are now emerging as both exciting and terrifying…”, depending on the point of view 1.3. Civil Service Culture Taking into account our inheritance from the past and the fact that perception of the public service affects the sort of workers it attracts (Lewis and Frank 2002), creating a new service culture is crucially important for securing common knowledge and competencies. In most CEE countries many public servants used to perceive themselves as superiors to citizens, not as servants to them. That is why creating a new culture based on responsiveness and high quality services should be one of the primary objectives of the training system in transitional countries. “…we will find that new value systems are built next to older ones, which are challenged rather than subject to erosion from within of from boundaries being broken at the margins..” (Kooiman, 2003: 35). Because of that adaptation to fundamentally new demands is especially hard task for those who have been working in public service already before the transitional changes. Prior to implementing new value system, the organizations need first to assess the current one. One of the widely used mechanism for evaluating organizational “value environment” is a values audit that provides data on current practices and problems and possible improvements (Lewis 1991: 199-202). Other possible options are customer and citizens assessments, quality assessments, etc. (Van Wart 1998: 260-70). Unfortunately many public organizations in CEE do not have enough desire and/or resources to undergo this assessment. When the PSA came into power in 1996 in Estonia, all people working in ministries and administrative agencies were automatically taken into public service without any control of whether these postsocialist, “cadre-type” administrators (König 1998) fulfill the requirements set in the PSA. According to the PSA, public servants had to pass special evaluation (attestation) in three years time which was later prolonged since the evaluation procedure was very unpractical and did not take into account the real situation in public service. There were no resources – time, money or expertise – available for retraining all public servants in such a short period of time. Also pay level was quite low in public service at that time meaning that there were not very many people available for substituting incompetent public servants. Although the PSA set fairly strict requirements for entering public service, no one actually knew whether the people employing public offices had relevant competencies. As Hirschmann (1999: 302) observes: “What is the point of the state being accountable if little is being achieved, of the state being transparent if there is nothing to show?” Evaluations were eventually started from the beginning of 1999 – three years after PSA came into force. Even by the end of 2002, there were 11 governmental agencies that had not initiated evaluations in their organizations (State Chancellery 2004). Thus, the situation was not and still is not probably the most fertile ground for introducing shared values for the public service. 1.4. Human Capital and Capacity to Learn Arguably public sector organizations can no longer manage by simple planning and controlling, but by developing capacities to manage resource issues, community issues and organizational issues within 3 major environmental and organizational changes (Joyce 2000: 51). According to Hatch (1997: 172) non-routine technologies and unstable environment will question the effectiveness of bureaucratic organizations even more. “One common objective of public service training is to support the implementation of administrative reform and modernization: another is to improve professional skills and qualifications of staff to increase efficiency of the public service” (OECD 1997: 4). As the general trend is “from representative forms to more consultative, deliberative and participative new forms of modern democracy” (Pratchett 2000: 11), redefinition of the role of the state and redesign of public administration system has resulted in new administrators’ competencies, professional behavior and values of public servants. Beardwell and Holden (1994: 276) argue that in order to meet challenges of quality, continuos improvement, flexibility and adaptability, organizations needed to demand more of their employees than new or enhanced job skills. They need to discover how to learn to work together, how to learn to think and how to learn to learn. “The organisation that will truly excel in the future will be the organisation that discovers how to tap people’s commitment and capacity to learn” (Senge 1990: 41). A recent OECD (2003) symposium on “The learning government: Managing knowledge in central government” indicated that an increasing number of government organizations introduce knowledge management measures in order to become “learning governments”. Training and learning abilities become especially important during the chances, e.g. when government is planning to undertake broad public service reforms. That is why “this [training in the public sector] is even more important in transitional countries where major reforms in nearly all sectors are under way, and where public sector staff face many great changes within a very short time (OECD 1997: 3). Also the currently prevailing shift from government to governance requires additional special training and education. “The primary role of the public servant is to help citizens articulate and meet their shared interests rather than to attempt to control or steer society” (Denhardt and Denhardt 2000: 549). Based on all named factors, training from one hand and ability to learn from the other hand are crucial factors for organizational success. Since human capital is the primary source for organizational innovation and renewal (Agor 1997: 175), both managers and change agents need to be aware of its importance. “Managers in public service are increasingly required to act as coaches and mentors and to ensure that employees develop the knowledge and understanding that underpin a broad range of competencies.” (Doherty and Horne 2002: 412). Of course, not all ideas and changes are successful, on the contrary, rather few of them will succeed. “Most efforts by executives, managers, and administrators to significantly change the organizations they lead do not work” (Burke 2002: 1). “It is one thing to decide you want to deconstruct an undesirable social reality, replacing it with something else is another story” (Hatch 1997: 94). Implementation is always more difficult in public sector setting than in private sector as “…publicness brings with it constraints, political influence, authority limits, scrutiny and ubiquitous ownership” (Nutt and Backhoff 1992: 201). That is why strong leadership commitment is one of the prerequisites of strengthening the capacity of the human capital while the latter one is often more depending on reforming values and attitudes than teaching or developing new skills and knowledge. The findings suggest that interesting work is more strongly related to work effort than are pay and promotion chances (Frank and Lewis 2004: 46). Because of that “active programmes of staff development are important tools for public organizations to motivate and retain staff” (OECD 1997: 5) and active staff involvement in planned reforms is a crucial factor for success. 2. Decentralization and or versus Corruption When we look at the public administrations of new member states of the EU, we see that these countries have very different types of public bureaucracies. There is no evidence that centralized administrations have been more successful in introducing common values and competencies across public service. The same implies also for developed countries. If we take the Corruption Perception Index (CPI) evaluated by the Transparency International, we see that at the top of the table are countries with highly decentralized administrations – Finland, Iceland, Denmark and New Zealand. Also Estonia is in comparison at least to the other new EU member countries in fairly good position, losing only to Slovenia. Obviously, we cannot put an equation mark between low corruption index and professional and competent public service. Quite often NPM reforms being still on agenda of transitional countries have been associated with 4 increase corruption. Contracting out practices, competition among players, etc. have increased, not reduced, the opportunities for “new corruption” (Harris-White and White 1996). It would reasonable to expect that the organizations implementing these reform would be willing to seek information about outcomes of similar reforms elsewhere, but this in not always the case. Bennett (1997) argues that before policy transfer can occur, the ones involved in it should see awareness and debate of existing policies elsewhere among policymakers. At the same time policymakers’ own motivations and ideas may overwhelm the incentive to gather this information and to do some research abroad. In developing countries limited human capacity increases the likelihood that these analysis-based lesson drawings will not happen. Thus, implementing some NPM ideas might well be useful, but they should be carefully tailored to local circumstance (Beblavy 2002, Verheijen 1997). According to Schick (1998) the outcome for transitional governments that undertake such reforms without paying enough attention to local situation is likely to be low accountability, uncontrolled contingent liabilities, weak incentives for performance, and corruption. There are many other socio-economic, cultural and historical aspects that have to be taken into account in explaining the corruption in every single country. Sissener (2001: 1) suggest to use contextual analysis of corruption which treats “corrupt” behavior as a “social act…[whose] meaning must be understood with reference to the social relationships between people in historically specific settings.” According to Wilson (2002: 37) “…human societal organisms rely critically on moral systems to define appropriate behaviors and to prevent subversion from within.” Since often there is still a thin line between socially rooted behaviors and bureaucratic corruption, practitioners themselves have to find “corrupted practices” unacceptable in order to make anti-corruption reforms to succeed. Nevertheless, having so many countries with decentralized administrations among least-corrupted ones shows that ethical and professional public service is not achievable only under centralized and formalistic public administrations. On the contrary, for instance, Polidano (2001) suggests that experience of developing countries has shown that formalization of public administration is not necessarily solving the problems faced by them. The question remains whether transitional countries have to go through similar steps as developed countries in last hundred years in establishing their merit based public service systems. It is quite unlikely that in a period of time when both public and business management theories stress the importance of managerial freedom, self-determination and flexibility, transitional countries could achieve success by centralization that is accompanied by rigid bureaucracy and formalization. Experience of Estonia offers different ways of building up professional public service. 3. Public Service Training System in Estonia In line with the public service general structure, also training system is decentralized in Estonia. Every ministry and executive agency has its own training budget and is free to choose where to buy training services. Since there was a trend introducing private sector management techniques and principles into public organizations, all kinds of training institutions have started to exist. According to the survey carried out by the State Chancellery (2004) there were 235 different public, private and third sector training institutions providing training courses for public servants in year 2002 and this figure did not include all providers. In a decentralized training system public sector training institutions have usually and equally to compete with the private sector providers. “The decentralization of training institutions has necessarily an impact on the need to co-ordinate, monitor and evaluate training to ensure a certain standard of training” (OECD 1997: 8). A common risk of the system because of existing diversity and complexity is that getting quality training might become complicated. “Resources are wasted if training needs are not met because they have not been properly analysed, or because training is being used as an inappropriate response to poor performance” (Doherty and Horne 2002: 432). With the emergence of competing and divergent concepts of what quality training means for public authorities, the situation becomes even fuzzier. Not all training is decentralized to the organizational level in Estonia. The State Chancellery is responsible for coordination of public service training system. This coordinating function (developing training policy and strategy, analyzing and drafting legislative acts, etc) is mostly done through informal measures, since the State Chancellery does not have any legislative authority over other public institutions. Therefore, dissemination of best practice and values has been based mostly on informal 5 measures, most important of which is networking. The Chancellery has been building up a network of public personnel and training managers already since 1997. This network has been unofficial where HR managers participate on their own will. The Chancellery has performed as a facilitator in this network where representatives of different public service institutions can share their experiences and in establishing training systems in their own organizations. There is also separate budget for financing these activities. Nonetheless, the amount of the central training budget is similar to the training budget of an average-size public service organization. Most of the central budget is spent on the financing of training courses directly related to the Public Service Training Priorities. These priorities are set annually by the Cabinet and reflect the major public administration development areas of the Government. For instance, the year’s 2004 priority areas are strategic management, public service personnel management, digital document management, public ethics, quality management, European Union, and public law. The general idea of training priorities is to support the introduction of new initiatives of the government and policy areas that are important in regard to the public service development. The other characteristic of the above mentioned priorities is that they are based on horizontal training needs, i.e. needs which are common all over public service. This way the central administration at least tries to introduce new ideas and tools that are practicable all over public service and to create shared value base. In addition to central budget, under the State Chancellery there is Centre for Public Service Training and Development (ATAK)3 that is supporting the former with implementation of central training function. While the Chancellery is setting priority areas and dealing with more general policy issues, ATAK's responsibility is to organize training courses in accordance with these policies. ATAK has been major partner to the Chancellery in providing training courses directly related to the training priorities and are partly subsidized from the central training budget. These courses are offered on voluntary basis, i.e. every public service institution decides whether they want to send their officials to these courses or not. It is not obligatory for them but due to the subsidized price although these courses are usually very popular. 4. Additional possibilities In addition to slightly centralized training system, there are three additional possibilities for establishing shared values and competencies in Estonian public service, but in reality two of them do not have this impact. 4.1. Basic Requirements As noted earlier, basic requirements for public servants are stated in a government decree and are divided into four groups: 1. 2. 3. 4. requirements for education; requirements for prior work or service experience; requirements for knowledge and skills; requirements for personal characteristics. These requirements are differentiated between three categories – senior, middle rank and junior officials (e.g. university decree is prerequisite for senior officials, not for others). Decree sets minimum requirements, therefore every organization is free to set higher requirements, if needed (e.g. demand university degree from junior officials). However, from one hand the recruitment process takes into account the level of education, but not so much its’ content and from the other hand the requirements are quite technical and do not say much about values required from the officials. Moreover, basic requirements are usually taken as formality. Only easily measured parts are used in selection or evaluation – university degree, prior experience and language skills. Other skills or characteristics are rarely evaluated and they are stated in evaluation criteria as a formality. Therefore, basic requirements for public servants cannot still be considered as instruments for establishing value base of public servants. 3 Formerly known as the Estonian Institute of Public Administration that was reformed in the beginning of 2003. 6 4.2. Code of Ethics In February 1998 Code of Ethics was added to the PSA as an annex to the Act. Major idea behind the Code was to set general standards that are expected from public servants in their everyday work. They were supposed to be useful in two ways. In one hand, these standards were hoped to raise public awareness of what kind of behavior can they demand from public servants. In this respect, the Code was introduced as a tool for citizens to hold public servants accountable. On the other hand, important task of the code was to raise the awareness of public servants themselves of what are the expectations of public and politicians towards them. The hopes put on the Code were unjustified. Bowman (2000: 678) states that “…codes can be rendered ineffective either because they are poorly designed and/or badly implemented”. In Estonian case the reason was non-existent implementation system. “…a values statement is an essential but insufficient condition for integrating values into public service. Getting the statement right and its implementation wrong poses the risk of raising cynicism and reducing morale.” (Kernaghan 2003: 718). Also Code of Ethics was practically forgotten quite soon after it came into force. There were no activities planned on how to implement the principles set in the Code. Furthermore, there was no one made responsible for doing it. “Without enforcement, simply setting limits on behavior and threatening sanctions is like having teeth without biting… These services [enforcement] need to be seen as being effective to gain credibility, not only in the public service but also in the public at large” (OECD 1996: 32). In Estonia no one felt itself responsible for issues dealing with public ethics. As a result, the standards set in the Code of Ethics are not well known to the public and it is likely that even many public servants are not aware of them. 4.3. European Union According to the law of the European Union, member states have primary responsibility for public administration based on the concept of “limited powers” (Siedentopf and Speer 2003). Nevertheless it can be argued that EU integration process has contributed to the development of shared values and common practices more than any of the formal measures. European Union formed a concrete set of criteria for accession countries’ public administration before being able to join the EU (Commission 1997). The Accession Partnerships contained country-specific priorities for public administration reforms and the establishment of authorities responsible for the implementation of EU policies. “Every domestic policy decision is made with an ever-present concern over how well the decision will conform to the model of the cooperative and responsible Eurocitizen…The immediate foreign policy problem of the transformation process, therefore was to demonstrate that all the desirable domestic changes were indeed occurring – hence an almost obsessive concern with international “image”” (Leff 1997: 240). Siedentopf and Speer (2003: 14) summarize “…during the accession process the Commission has gained a great influence on the public administration of the CEECs…”. The impact of EU has been crucial also in introducing common knowledge and values among Estonian public administrators. 5. Lessons Learned from Estonia Firstly, the importance of uniform qualification required from public servants is not all-important. Due to the open system, Estonian public service employs people with very diversified educational background and professional qualification. But it is not necessarily a bad thing. In a small country like Estonia, where the total number of public servants in central government is around 20 000 people, there is a need for different kind of public servants. Here one official performs tasks that can be taken care of by a whole unit in big administrations. Therefore, public servants have to possess much broader set of abilities to fulfill these different types of tasks in a small country (Randma 2001). He/she has to be a good expert in certain policy field (e.g. agriculture) and simultaneously have good policy-making and interpersonal skills. In this case further training is almost as important as formal education or qualification. It is questionable if public administration graduate is more valuable expert of agricultural policy than someone with a university degree in agriculture who has gone through public administration related training courses. These kind of specific training needs are not easily dealt with from the top. It is best done at the organizational level where training needs can be directly linked with the responsibilities of an employee. Training programs imposed from the top cannot fully take into account actual needs of the employee. 7 Secondly, decentralization does not mean a chaos where every administrative agency is free to organize its work as they please. Public service organizations have to have certain shared values by which they can be hold accountable by citizens. “A values statement expressing values that are shared at all organizational levels…provides an especially strong foundation for integrating values into public service” (Kernaghan 2003: 718). Since values can be “…ethical, unethical or simply non-ethical” (Henry 1998 xiv), the organizations need to be aware of the prevailing values in their environment. Peters has argued that effective policy co-ordination between different governmental agencies can best be developed between the people who share similar values, skills and understandings about policy making which makes professional civil service as ‘one of the most important horizontal networks in government’ (1998: 305). Therefore, certain central measures are needed for developing such value system. In Estonia it is done through minimum requirements set for categories of posts, and code of ethics. Although, as seen above, these formal measures have not been too successful in introducing shared values. Much more practicable have been less rigid instruments as the annual training priorities laid down by the Cabinet that should be taken into account in every administrative agency while drafting their training plans. Yet again, Estonian experience says that while it is important to have centrally set values, they are more effectively implemented at the organizational level. Every organization can decide whether they are lacking certain competencies and if they do what is the best way of obtaining them. Be it through centrally offered training courses or in-house training. However, it has to be stressed that government should ensure that high-quality training courses are available in priority areas. Thirdly, imposing values trough centralized system is not necessarily more effective than through decentralized system. It is important that these values are understood and accepted similarly all over public service. It is definitely easier to make public servants aware of the values by using centralized tools – e.g. compulsory training, exams etc. Another thing is to make people behave in accordance to them. Here can decentralized model be much more helpful. As theory of learning organizations suggests, you cannot compel a plant to grow (see Senge 1999), you have to create special conditions for it and then it grows itself. Using informal policy networks gives people an opportunity to take part of the policy design process. Fourthly, high level of cooperation and joint working was needed in harmonizing Estonia’s legislation in such a short period of time. This was done both through formal and informal inter-ministerial working groups and networks. “The most important aspect of multi-layered institutional arrangement is the realization that in decision-making situations, different logics of rules apply, depending on what level it takes place” (Bogason, 2000: 120). While people active in various networks were given very good training with a contribution from different EU funds, the networking abilities among the payers increased significantly. Estonia’s experience has shown that inter-ministerial training is very useful tool not only in creating shared values and competencies, but also building networks and enhancing cooperation between specialists in different administrative agencies. However, after joining the EU stronger impact has to be put on the lower level officials who were not so closely linked with the EU integration process. In lower levels the policy networks and cooperation is still considerably week. 6. Challenges for the Future It does not imply that this kind of laissez affaire approach taken by Estonia does not have its deficiencies. Even though, in some areas, like EU coordination, Estonia has very skilled public servants with well-established policy networks, in many other areas they are still missing. Moreover, due to the youth and heterogeneity of public service, still considerable part of officials are not fully aware of the true meaning of public values and miss relevant competencies. Major problem of Estonian public service is the vague coordination and implementation system. As described above, different parts of public service development are decentralized between different ministries and the State Chancellery, while none of them is directly responsible for coordination of the system, as a whole. It is complicated to develop shared values in such conditions. Secondly, in addition to coordination system, it would be advisable to create public service competency center that can be used in planning and implementing public service development related activities. Even though there are different public sector training institutions in place, their areas of responsibility and role in this process are totally unclear. Similarly there is no central funding provided for creating 8 and accumulating competencies that can be shared all over public service. Hitherto, there has been too big hope put on the market forces in creating shared value base, at the same time, experience has shown that private training companies do not have necessary competencies related to public service values and ethics. Thirdly, much clearer visions are needed for developing public service. New version of Public Service Act has been under discussion for almost five years by now, and there is still no result. More importantly, there is long term strategy needed for public service development that would state shared vision what is expected from public servants in longer perspective and clarify roles and responsibilities of different stakeholders in this process. To sum up, the chosen decentralized model of public service has contributed to the modernization of Estonian public administration. Estonia’s experience has shown that it is not just formal structures and central controls that are required for establishing competent public service. 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