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Tiina Randma-Liiv and Riin Savi

This chapter outlines the responses of European governments to the recent financial crisis with special focus on cutback strategies, consolidation measures and effects of crisis on public management patterns. Applying cutbacks during the fiscal crisis was not a one-off event, but consisted of a series of stages in the majority of European countries. Among personnel cuts, hiring freeze was the most widely applied cutback measure, followed by pay freeze, pay cuts and the reduction of staff through layoffs. All European governments demonstrated a shift towards a higher degree of centralisation in decision-making which was operationalised through the extensive increase in the power of the Ministries of Finance and of organisational budget planning units, along with the general increase in centralisation of organisational decision-making. Crisis-led pressure for public administration reform was the largest in countries that were most severely hit by the crisis and had been compelled to request foreign financial assistance.

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Riin Savi and Tiina Randma-Liiv

The chapter demonstrates that after more than 20 years of radical reforms and changes, the Estonian public sector is still highly reform oriented, especially when compared to the other European countries. The public sector managers report intensive use of various management instruments, and numerous public administration reform trends are held relevant and are being concurrently pursued. The prevalent public administration reform trends are focused at improving coordination and collaboration among different public sector actors, enhancing transparency and e-government via e-services. These reform initiatives are aimed at overcoming the current horizontal fragmentation of the public sector institutions and delivering public services more efficiently and effectively.