Public administration characteristics and performance in EU28 : Cyprus.
Date: 2018-08-01
Institutions: Directorate-General for Employment, Social Affairs and Inclusion
Subjects: Cyprus, EU Member State, administrative transparency, civil service, comparative analysis, electronic government, governance, public administration, public institution, public service

Public administration 
characteristics and performance 
in EU28: 

Cyprus

Written by 
Andreas Mallouppas and Takis Stylianides
Cyprus International Institute of 
Management, CIIM
April – 2018 

Social 
Europe 

EUROPEAN COMMISSION 

Directorate-General for Employment, Social Affairs and Inclusion  
Directorate F — Investment Unit F1 — ESF and FEAD: policy and legislation 

Contact: EMPL-F1-UNIT@ec.europa.eu 

European Commission 
B-1049 Brussels

EUROPEAN COMMISSION 

Public administration 
characteristics and performance 
in EU28: 

Cyprus 

Directorate-General for Employment, Social Affairs and Inclusion 

144 

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TABLE OF CONTENTS 

1  SIZE OF GOVERNMENT............................................................................. 147 

2  SCOPE AND STRUCTURE OF GOVERNMENT .............................................. 149 

2.1  State system and multi-level governance ................................................ 149 
2.1.1  Basic information on the state/government system: Key features, organization 
of government levels and their constitutional status ........................................... 149 
2.1.2  Distribution of power between the different government levels, their role and 
responsibilities ............................................................................................... 149 
2.1.3  Relationships between the different government levels ............................. 151 
2.1.4  Relevance and role of the government levels in relation to public administration 
reform 152 

2.2  Structure of executive government (central government level) .............. 152 
2.2.1  Machinery of government ..................................................................... 152 
2.2.2  Centre of government coordination ........................................................ 153 
2.2.3  Key management, budgeting and monitoring mechanisms ........................ 154 
2.2.4  Key mechanisms for audit and accountability .......................................... 154 
2.2.5  Organisation and coordination of administrative reform ............................ 154 

3  KEY FEATURES OF THE CIVIL SERVICE SYSTEM ....................................... 155 

3.1  Status and categories of public employees .............................................. 155 

3.2  Civil service regulation at central government level ................................ 156 

3.3  Key characteristics of the central government HR System ....................... 157 

4  POLITICAL ADMINISTRATIVE SYSTEM AND POLITICAL ECONOMY .......... 158 

4.1  Policy-making, coordination and implementation .................................... 158 

4.2  Administrative tradition and culture ........................................................ 160 

5  GOVERNMENT CAPACITY AND PERFORMANCE ......................................... 162 

5.1  Transparency and accountability ............................................................. 163 

5.2  Civil service system and HRM .................................................................. 164 

5.3  Service delivery and digitalization ........................................................... 165 

5.4  Organization and management of government ........................................ 166 

5.5  Policy-making, coordination and regulation ............................................ 166 

5.6  Overall government performance ............................................................ 167 

REFERENCE SOURCES ..................................................................................... 168 

146 

 
 
 
 
 
1  SIZE OF GOVERNMENT  

The overall picture of the public sector in Cyprus (comparison of the figures for 2010 and 
2015, given in the Table below) shows an overall stability in the ranking between 2010 
and 2015, except for the figures concerning Public investment in % of GDP and  Debt in 
% of GDP. As regards the total expenditure (% of GDP) the country is ranked the same, 
(24/28) with a slight deterioration in absolute figures, which is not a surprise given the 
fact that in 2012-2015 the country came under a Memorandum from its “troika” lenders 
demanding cuts in government expenditure (benefits, salaries, freeze on new posts and 
employment  of  staff,  no  promotions  etc).  This  also  explains  the  reduction  in  the 
percentage  of  central  government  share  of  expenditure  resulting  in  a  drop  of  one 
position, but well above the  EU average (6/28). Although the above  figures in absolute 
terms are negative the country’s ranking is almost stable.  Another consequence of the 
“troika” memorandum is that Public Investment, as a % of GDP, fell drastically to 27/28, 
a  consequent  drop  of  14  positions  just  ahead  of  another  country  under  memorandum, 
Ireland. Public debt in absolute figures almost doubled (as % of GDP) from 14th in 2010 
to  25th  in  2015,  ahead  of  Portugal,  Italy  and  Greece,  which  faced  even  more  severe 
financial  problems  at  the  time.  Due  to  the  financial  measures  imposed  by  the 
government  the  deficit  has  reduced  by  almost  77%  giving  Cyprus  a  much  improved 
ranking of 8/28.  

Table 1: General government budget data  

Sources: AMECO, Eurostat 

The  period  covered  by  the  data  (2010-2015)  show  a  more  negative  picture  of  the 
financial situation than exists in 2016 to date. Since then Cyprus has successfully exited 
the  Memorandum  facility  due  to  the  drastic  measures  undertaken  by  government  and 
accepted  by  all  the  social  partners  and  stakeholders  involved  (unions,  employers, 
financial sector). For the period from 2010-2015 the number of general employment has 
decreased by 40,000 (10%) whereas the number of public employment has increased by 
4%,  i.e  1,100  employees.  The  increase  resulted  during  the  period  2010-2012,  prior  to 
the  implementation  of  the  Memorandum,  where  the  then  government  continued  the 
engagement  of  new  staff.  However,  due  to  the  employment  freeze  after  2013  the 
number  of  empty  posts  in  2015  was  23.08%,  according  to  the  Annual  Report  of  the 
Public  Service  Commission,  PSC.  Thus  the  total  number  of  posts  in  the  central 
government  does  not  represent  the  actual  number  of  staff  and  consequent  salaries. 
Unemployment has since been reduced but Cyprus (2015 figures) is still well below the 
EU  average  (21/28)  as  regards  %  of  public  employment/total  employment  (8.1%,  EU 
2015 average 6.9%), whereas in 2010 it was 7.0% (EU average 7.1%).   

 
 
 
 
 
Public sector employment* 

The  statistics  given  below  were  obtained  from  the  Statistics  Service  of  the  Ministry  of 
Finance 

Table 2: Public sector employment 

CYPRUS 

2015 

COMMENTS 

(1) General government employment (in thousand)* 
thereby share of  central government (%) 
thereby share of state/regional government (%) 

58  
92.6  
 ------  Not Applicable for Cyprus 

thereby share of local government (%) 

7.4  

(2)  Public  employment  in  social  security  functions  (in 
thousands.) 
(3) Public employment in the army (in thousands.) 
(4)  Public  employment  in  police  &  fire  service  (in 
thousands.) 

Not available 

------   *Security  Forces 

9.7* 

(include 
Fire 

and 

Police 

Army, 
Service) 
Includes  persons  employed 
in  NACE  Rev.  2  H52,  H53, 
M71,  M75,  P85,  Q86,  Q87, 
Q88, R91 
[NACE  REV.2:  Statistical 
Codes for Economic Activity] 
The 
Statistics 
Service  does  not  maintain 
government 
(state) 
employment data under N78  
**Education 
(includes 
schools  [primary,  secondary 
and 
and 
tertiary] 
Universities 

Cyprus 

(5)  Public  employment  in  employment  services  (in 
thousands) 
(6)  Public  employment  in  schools  and  daycare  (in 
thousands.) 

23.6  

-------  

(7) Public employment in universities (in thousands.) 
(8) Public employment in hospitals (in thousands) 

15.6** 

6.4 

Public 

employment 
(9) 
administration (in thousands.) 
(10)  Core  public  administration  employment  in  %  of 
general government employment  (9)/(1) 

core 

public  

in 

***Bearing  in  mind  that  no 
figures  were  available  for 
(2) 

 2.7*** 

4,655% 

Source: National statistics (Statistics Service of the Ministry of Finance, Cyprus) 
*According to the OECD, general government employment excludes public corporations. 

148 

 
 
 
 
 
 
  
  
  
 
 
2  SCOPE AND STRUCTURE OF GOVERNMENT  

2.1  State system and multi-level governance 

2.1.1  Basic  information  on  the  state/government  system:  Key  features, 

organization of government levels and their constitutional status 

Cyprus  is  a  country  of  less  than  a  million  inhabitants  and  its  government  system  is 
adapted to suit both its population size as well as its geographical area, which is half that 
of Wales. As a consequence of the above it is a very centralized state system, with local 
government (municipalities in major cities and village council boards) forming the other 
tier  of  government.  Central  government  is  a  Presidential  system,  with  a  President 
elected  every  five  years  and  who  has  the  right  to  appoint  11  ministers,  who  form  the 
Council of Ministers. Ministers serve at the discretion of the President. Together with the 
President they represent the executive branch of central government.  

The  House  of  Representatives,  consisting  of  56  Deputies,  forms  the  legislative  branch 
and is elected based on 6 constituencies every five years. It approves all legislation and 
the  annual  budgets  submitted  by  central  government.  Local  Government  budgets  are 
submitted by municipalities and local boards to the Ministry of the Interior, after having 
the approval of the Ministry of Finance. The Council of Ministers submits their budgets to 
the  House  of  Representatives.  Various  parliamentary  committees  deal  with  different 
issues, including budgets. At their hearings interested parties are also invited to attend 
and  present  their  case  and  answer  to  Deputies’  questions  before  each  parliamentary 
committee  submits  their  report  to  the  plenary  session  of  the  House  for  discussion  and 
final approval.  

The Judiciary forms the third pillar of governance. They are an independent body headed 
by  the  Supreme  Court  judges,  who  are  appointed  by  the  President  of  the  day  till  their 
retirement at the age of 68. Among other issues the Supreme Court passes judgment as 
to  the  Constitutionality  of  various  laws  that  the  President  may  submit  to  them,  after  a 
vote in Parliament. The Attorney General and Auditor General, who are also appointed by 
the President of the day, head independent offices, till their retirement at the age of 68. 
Local  government  officers,  city  Mayors  and  Village  Chairpersons  are  elected  every  five 
years  in  local  elections  that  are  held  for  this  purpose.  Their  actions  come  under  the 
scrutiny  of  the  Ministry  of  the  Interior  and  as  regards  their  budgets  the  Ministry  of 
Finance.  They  have  autonomy  in  running  their  affairs,  through  their  corresponding 
Councils,  which  are  also  elected  at  the  same  elections  for  the  same  five  year  period. 
Their governance is scrutinized by Parliamentary Committees and by the Auditor General 
and if required the Attorney General. 

All  above  officials  and  bodies  are  foreseen  in  the  country’s  Constitution,  through  which 
their legitimacy and independence is safeguarded but at the same time their obligations, 
monitoring, accountability and jurisdiction is also given. 

2.1.2  Distribution of power between the different government levels, their role 

and responsibilities 

Table  3  below  gives  a  description  of  various  aspects of  responsibilities  between 
Central  and  Local  Government  in  Cyprus.  State  entities,  such  as  public 

149 

 
 
 
corporations  (electricity,  telecommunications  etc.),  state  universities  have 
national  jurisdiction,  whereas  some  public  utilities,  such  as  water  boards  have 
jurisdiction  on  a  provincial/district  basis  (i.e.  Nicosia  Water  Board  for  Nicosia 
District).  All  these  entities  in  the  Table  below  would  be  shown  under  “Central 
Government”  since  they  are  not  a  provincial  government  in  the  sense  of  larger 
countries,  where  provincial  officials  are  elected.  In  the  case  of  Cyprus  the 
Governing Boards for these entities and state organisations are appointed by the 
Council  of  Ministers,  at  central  level.  Thus  they  promote  the  policies  and 
programmes  of  the  central  government  and  President  of  the  day.  Transport 
(airports,  ports  and  buses  are  privately  administered,  although  the  building 
infrastructure for airports and ports is still owned by the state, but leased out to 
private companies). 

Government level 
Central government: 
defense 
external affairs 
internal affairs 
justice 
finance/tax 
economic affairs 
environmental 
protection 
social welfare 
health 
education 
public utilities 
science and research 

Legislation 
All  forms  of 
Legislation: 

Regulation 
All 
Regulations: 

forms  of 

For all Laws there 
are corresponding 
Regulations 
in 
order  to  provide 
the 
framework 
and  details  as  to 
their 
correct 
implementation. 
Parliament 
the final say. 

has 

Central 
government 
and 
related 
Ministries  are 
responsible  for 
stipulating, 
formulating 
and  submitting 
to  the  Council 
of 
Ministers 
pertinent 
legislation, 
that 
provided 
first 
this 
is 
by 
evaluated 
the  Office  of 
the 
Attorney 
General  for  its 
compliance 
with 
constitution 
and  other  legal 
requirements. 
Parliament  has 
the final say.  

the 

Provision 
Central 
Government:  

Provides  social 
welfare,  health 
services 
and 
education  up  to 
Secondary 
It  also 
level. 
provides 
for 
road  and  other 
public  works  as 
well 
as 
agricultural 
support 
environmental 
protection 
services.    Owns 
dams, 
reservoirs  and 
infrastructure 
for 
water 
Water Boards.  

providing 
the 

and 

to 

is 

for 

Funding 
Funding 
Central 
Government:  
Irrespective  of 
of 
type 
the 
organization, 
funding 
provided 
a 
through 
budget  that  is 
submitted 
by 
the  responsible 
Ministry  to  the 
of 
Ministry 
Finance,  which 
final 
has 
the 
say. 
is 
then  submitted 
to  the  Council 
of Ministers and 
Parliament 
for 
their  approval 
or  modification. 
No  organization 
is  allowed 
to 
realize 
expenditures 
that  are  not 
foreseen  in  its 
budget.  

This 

State/regional 
government 

Local government: 
finance/tax  (limited 
areas) 
social  welfare  (old 
age  homes,  libraries, 
swimming pools etc.) 
environmental 
protection 
(waste 
disposal  sites,  green 
points etc.) 

NO 

Not 
Applicable for 
Cyprus 
Local 
Authorities 
have 
Legislative 
power 
submit 
legislation 
parliament. 
This 
through 

is  done 
the 

to 

to 

Not  Applicable 
for Cyprus 

For all Laws there 
are corresponding 
Regulations, 
passed  by  The 
House,  in  order 
the 
to  provide 
and 
framework 
details as to their 
correct 
implementation. 

for 

Not 
Applicable  for 
Cyprus 
Funding 
local 
governments  is 
provided  by  a 
Grant 
from 
Central 
Government, 
through 
the 
Ministry  of  the 
Interior.  They 

Not Applicable 
for Cyprus 

Local 
government 
for 
provides 
welfare 
local 
services, 
such 
as  old  peoples’ 
homes,  green 
points, libraries, 
swimming 
pools, 

150 

 
 
 
 
 
 
 
 
Ministry  of  the 
Interior.  

also  have  the 
to  raise 
right 
by 
taxation 
taxing 
local 
activities,  such 
refuge 
as 
collection  and 
property tax.  

Park 

playgrounds 
and 
maintenance. 
Some 
secondary  road 
repair  and  road 
signage.  

For all legislation for ministries, public utilities, state organisations, including universities, 
this  can  only  be  submitted  to  Parliament  through  the  responsible  Ministry.  The  same 
applies for Regulations, which describe in more detail the way various provisions in each 
law may be realized. The police and army are not considered civil servants. The Chief of 
Police and Commander of the National Guard are appointed by the President and report 
to  the  Ministers  of  the  Interior  and  Defence,  respectively.  All  entities  are  subject  to  an 
annual  audit  by  the  Independent  Office  of  the  Auditor  General  and  any  misuse  may  be 
submitted  to  the  Independent  Office  of  the  Attorney  General  for  any  legal  action  that 
may be required. 

As  regards  the  administrative  reforms  (PAR)  for  local  government  the  Unit  for 
Administrative  Reform  and  Development  submitted  in  Q4/2016  legislation  in  order  to 
create fewer municipalities thus ensuring economies of scale and as a result reduction in 
running  costs,  fewer  staff  and  increase  in  productivity.  The  draft  proposals  are  still 
before  the  House  of  Representatives  and  political  parties  and  other  interested 
stakeholders.   

2.1.3  Relationships between the different government levels 

Although this, in comparison with other countries, is a much smaller system it still faces 
problems  of  coordination  between  the  different  levels  since  it  has  also  a  limited 
manpower  capacity  to  manage  the  two  systems.  At  Central  Government  level 
bureaucracy  and  the  lack  of  administrative  reform,  since  independence  in  1960,  have 
resulted  in  a  much  slower  responding  system.  As  a  result  there  may  be  a  larger 
provision on staffing than the size of the work would normally require. The civil service 
system  is  a  career  -based  system  and  one  in  which  employees  are  very  well  protected 
and cannot be easily fired or moved, unless it is foreseen in their job description.  

The  same  is  true  for  local  government  staff.  Thus  up  to  now  the  “solution”  was  to 
increase  staff  to  run  any  new  additions  to  the  system.  In  fact  in  the  last  years  the 
number  of  municipalities  was  increased  substantially  leaving  major  cities,  such  as 
Greater Nicosia with a population of less than 200,000 with six municipalities. Obviously 
economies of  scale as  regards basic infrastructure and manpower are  not there.  It was 
for  this  reason  that  a  bill  for  local  government  reform,  following  the  financial  crisis  of 
2013,  was  formulated  but  it  is  still  at  the  discussion  stage  and  has  not  been  seriously 
debated by parliament nor the stakeholders concerned. One can say that there is a clear 
overcapacity on a manpower level, particularly for local government.  

At  central  government  the  excessive  centralization  involved  due  to  the  size  of  the 
country, on the one hand but on the other the lack of administrative reform has meant 
that  over  the  years  the  effectiveness  of  both  tiers  of  government  have  shown  signs  of 
fatigue.  The  financial  crisis  was  the  catalyst  to  bring  the  required  external  impact  to 

151 

 
 
 
 
change  things.  A  lot  has  been  changed  but  more  needs  to  be  done  and  important 
legislation  is  still  outstanding.  The  legislation  outstanding  concerns  staff  evaluation 
system, mobility of staff and methods of recruitment by the Public Service Commission, 
outlined in 3.2 below. 

2.1.4  Relevance  and  role  of  the  government  levels  in  relation  to  public 

administration reform 

Cyprus  is  a  unitary  state,  following  mainly  the  Anglo-Saxon  system  of  the  United 
Kingdom,  since  the  UK  was  former  colonial  power  till  1960.  Thus  a  lot  of  Cypriot 
legislation  is  based  on  the  UK  system  of  the  time.  There  are  only  two  tiers  of 
government,  central  and  local  (municipal),  due  to  the  size  of  the  country.  However, 
there  has  been  no  substantial  PAR  in  both  tiers  of  government  since  independence  in 
1960.  The  financial  crisis  of  2013  became  the  catalyst,  with  the  imposition  by  the 
external lenders (the troika), of badly needed reform of the system, including PAR. The 
Cypriot financial crisis was in a major part a banking crisis due to the over exposure of 
Cypriot banks to Greek government debt as well private debt due to the  many branches 
they had in Greece. The debt was “cut” resulting in a five billion loss for Cypriot banks. 
That  is  the  reason  why  the  financial  crisis  hit  Cyprus  in  2011-12-13,  much  later  than 
other countries and it was mainly due to external factors (Greek crisis).  

The  legislation  that  was  produced  due  to  the  above  was  submitted  by  central 
government to the House of Representatives for approval in late 2016. This took time to 
develop since the new Anastassiades government, which took office in 2013, set up the 
Unit  for  Administrative  Reform  and  Development,  which  had  to  develop  the  required 
PAR,  shown  in  section  3.2  below,  in  collaboration  with  the  Ministry  of  Finance  and  the 
stakeholders  involved,  and  which  had  to  comply  with  the  demands  of  the  “troika”. 
Unfortunately  the  legislation  was  not  passed  and  the  government  is  currently  in 
negotiation  with  the  different  political  and  other  parties  in  order  to  find  a  negotiated 
compromise  to  the  issue.  The  role  of  the  two  government  levels  in  realizing  and 
implementing  PAR  is  central.  However,  the  main  stumbling  block  at  the  moment  is  not 
the  stakeholders  of  the  different  levels  of  government,  but  Parliament,  where  the 
majority  of  parties  are  in  opposition  to  the  present  government,  whose  tenure  ends  in 
February 2018. 

State structure 
(federal  - unitary) 
(coordinated – 
fragmented) 

Unitary 

Executive 
government 
(consensus – 
intermediate – 
majoritarian) 
Intermediate 

Minister-mandarin 
relations 
(separate – shared) 
(politicized – 
depoliticized) 
Separate-
Depoliticised 

Implementation 
(centralized - 
decentralized 

Centralised 

2.2  Structure of executive government (central government level) 

2.2.1  Machinery of government 

Cyprus, due to its population and size, is a unitary state with a Presidential system that 
forms  the  executive  branch  of  government  and  by  its  nature  and  size  is  a  very 
centralized  system  of  government.  There  are  11  ministries,  which  are  headed  by  a 
minister  appointed  by  the  President,  without  a  fixed  term  of  office.  The  number  of 
ministries is restricted by the 1960 Constitution and hence it is difficult to increase their 

152 

 
 
 
number.  To  change  this  constitutional  provision  would  require  a  solution  to  the  Cyprus 
problem,  as  a  result  of  the  1974  Turkish  invasion,  and  setting  up  a  new  Constitution, 
which requires agreement with the Turkish Cypriots. This is the reason why a number of 
Ministries  have  more  than  one  portfolio  (i.e.  Ministry  of  Agriculture,  Natural  Resources 
and  Environment,  Ministry  of  Commerce,  Industry  and  Tourism,  Ministry  of  Transport, 
Communications and Works).  

All  ministries  are  headed  by  a  minister,  who  is  the  political  head  of  the  ministry  and  is 
assisted  by  the  Permanent  Secretary  (Director  General)  in  each  ministry,  who  is  a 
permanent  civil  servant,  with  the  job  security  that  all  civil  servants  have.  Permanent 
Secretaries  may  be  transferred  to  another  ministry,  following  a  Council  of  Ministers 
decision.  This  does  not  happen  very  often.  Under  the  Permanent  Secretary  there  are 
Directorates, headed by a Director, related to the remit of the specialist activities of each 
ministry. Under each Director there are specialist units that report to him/her and so on. 
Directors  are  not  normally  transferable  staff  and  stay  at  their  posts  till  retirement, 
currently  at  the  age  of  65.  The  civil  service  system  (central  government)  is  a  typical 
hierarchical  system.  The  annual  staff  evaluations  are  carried  out  by  three  hierarchically 
senior staff members, where one of them is usually the Director of the Division, for most 
purposes.  The  Directors  are  evaluated  by  the  Permanent  Secretary.  ministers  are  not 
involved  in  evaluations  for  staff,  tenders  or  any  other  technocratic  issue  in  their 
ministries. In this case there is separation of political influence in technocratic decisions, 
thus  allowing  the  system  to  have  reasonable  political  autonomy  from  the  politicians  of 
the day. On the other hand it is still a very centralized system for the reasons explained 
above.  

There are a number  of  laws and pertinent regulations that form the legal framework of 
actions taken by the technocratic system in all ministries. It is this legal system (ie the 
Law  on  Tenders  and  Procurement,  which  is  based  on  EU  guidelines)  that  independent 
agencies, such as the office of the Auditor General and that of the Attorney General are 
available  to  judge  if  there  has  been  a  violation  of  good  practice  or  even  illegal  action, 
with  the  consequent  legal  procedure  that  may  follow.  There  have  been  court  cases 
recently  where  top  managers  in  local  government  and  Mayors  have  had  to  face 
imprisonment.  The  system,  apart  from  the  change  in  Ministers  is  very  stable  whenever 
there  is  a  change  of  government  or  Minister,  since  civil  or  municipal  servants’  jobs  are 
not  decided  by  Ministers  or  Mayors  but  by  technocratic  committees  or  in  the  case  of 
permanent  civil  servants,  by  the  Public  Service  Commission,  which  is  appointed  by  the 
President for a six year tenure and is composed of past technocrats and/or lay persons. 
Since  the  financial  crisis  efforts  are  under  way  focusing  on  achieving  results,  however 
the  pertinent  legislation  has  not  yet  been  approved  by  the  House  of  Representatives. 
This is clearly a negative development for PAR. 

2.2.2  Centre of government coordination 

The  major  controlling  Ministry  is  that  of  Finance.  All  development  projects  by  all 
ministries  require  that  funds  are  available  in  their  budgets  in  order  to  realize  new 
projects.  Inelastic  commitments,  such  as  salaries,  which  are  carried  over  from  year  to 
year,  reduce  the  available  funding  for  development  projects.  Since  the  financial  crisis 
there  is  a  freeze  on  new  appointments,  which  is  still  in  force,  in  conjunction  with  a 
substantial  reduction  in  the  wage  bill,  up  to  30%  in  some  cases,  which  is  also  still 
applied.  Ministries  have  been  asked  to  develop  their  own  Key  Performance  Indicators  ( 

153 

 
 
 
KPI),  but  the  system  is  still  not  set  up  to  monitor  the  degree  of  implementation  and 
timing.  Since  Cyprus  exited  the  “Troika”  Funding  Memorandum  (2016)  there  is  an 
improvement  in  the  economic  situation  and  thus  funding  has  become  available  for 
development  projects,  mainly  public  works  projects.  A  large  number  has  now  been 
tendered  for  and  work  has  started.  These  are  monitored  at  the  tendering  and  award 
stage  by  the  Office  of  the  Auditor  General  and  at  the  end  of  the  project  for  the 
compliance  of  payments  made  in  relation  to  the  initial  contract  and  if  they  have  the 
required approvals for any over budgeting. The Centre of Government, CoG, for Cyprus 
is  small  and  consists  of  the  Ministry  of  Finance  and  the  Unit  for  Administrative  Reform 
and Development, which is under the Presidency as regards suggestions for PAR. There 
is  no  other  body  that  serves  the  Presidency  other  than  a  small  office  of  the  Deputy 
Minister  to  the  President,  under  whom  the  Unit  for  Administrative  Reform  and 
Development is based. 

2.2.3  Key management, budgeting and monitoring mechanisms 

There  are  a  set  of  regulations  regarding  any  payments  made  by  each  ministry  (or  any 
other  entity)  with  which  these  payments  or  any  other  actions  need  to  comply.  A 
prerequisite for any payment is that it should be foreseen in the annual budget for each 
entity, thus this has to be foreseen the year before and be approved by the Ministry of 
Finance and then by Parliament. Hence for any major payments or actions these need to 
be identified at least a year in advance, arguments given as to their need and obtain the 
required approvals.  It  often happens that the  Ministry of Finance gives its approval but 
the  specified  budget  line  is  reduced  or  completely  cut  by  parliament.  The  Office  of  the 
Accountant General has accounting officers placed in each Ministry and they enforce the 
foreseen  accounting  practices  for  all  payments  made.  The  accounting  officer  may  deny 
making  a  payment  if  he/she  considers  that  the  payment  is  not  covered  by  the  correct 
justification(s) or is not foreseen in the approved budget. The Auditor General carries out 
an annual ex-ante evaluation of actions taken. 

2.2.4  Key mechanisms for audit and accountability 

The  annual  report  of  the  Auditor  General  for  all  entities,  central  government,  local 
government and independent state entities is submitted to the President of the Republic, 
the  President  of  the  House  of  Representatives,  who  makes  it  available  to  all  Deputies 
and  this  is  also  available  on-line  for  free  public  access  on  the  web  site  of  the  Auditor 
General.  Thus  there  is  full  transparency  as  to  the  findings  of  the  Auditor  General 
concerning  all  levels  of  government,  public  utilities  and  state  organisations.  In  the  last 
years a number of cases were submitted to the Attorney General which have been taken 
to court, resulting in a number of convictions. The Office of the Ombudsman investigates 
complaints  by  citizens  regarding  administrative  decisions  and  has  the  right  to  request 
from the system clarifications concerning the complaint and to suggest ways to redress 
any grievances. 

2.2.5  Organisation and coordination of administrative reform 

In  order  to  achieve  PAR  there  is  a  need  to  promote  discussion  with  the  main 
stakeholders, one of them being the Unions. PAR was not promoted to any large extent 
until the financial crisis in 2013 not because of the unions but because the system could 
overcome  problems  with  the  minimum  of  “political  cost”.  Invariably  since  PAR  will  also 
involve  salary  changes  (not  necessarily  reductions)  the  Ministry  of  Finance  and  its 

154 

 
 
 
Department of Public Administration and Personnel have to take a central role. The Unit 
for  Administrative  Reform  and  development,  set  up  after  the  crisis,  took  the  initiative 
and  the  coordinating  role  among  all  the  stakeholders  involved  and  produced  a 
comprehensive  set  of  legislation  and  submitted  it  to  Parliament  through  the  Ministry  of 
Finance.  

3  KEY FEATURES OF THE CIVIL SERVICE SYSTEM  

3.1  Status and categories of public employees 

In  the  civil  service  (Central  Government)  all  staff  is  considered  to  be  civil  servants, 
irrespective  of  their  employee  classification.  (Local  Government  or  state  organization 
employees are not considered as civil servants). Depending on the type of appointment, 
permanent  or  not,  different  regulations  apply.  Appointment  of  permanent  staff  is  made 
against  permanent  posts,  which  have  to  be  previously  approved  and  appear  in  the 
relevant  budget  of  each  ministry  or  independent  office.  Normally,  staff  is  appointed  to 
first entry posts, which are the first line of entry for scientific staff (university graduates) 
and  non-scientific  staff  (at  least  high  school  graduates).  There  are  also  first  entry  and 
promotion  posts,  which  are  usually  top  and  middle  management  posts  for  university 
graduates, and are open to existing civil servants and  candidates from outside the  civil 
service. Normally such posts are overwhelmingly awarded to existing civil servants who 
have  the  advantage  of  relevant  experience  and  knowledge  and  implementation  of  civil 
service  laws.  Very  rarely  “outsiders”  are  appointed  to  such  posts.  There  are  also 
promotion posts, for which only civil servants are entitled to apply for.  

The civil service in Cyprus is almost exclusively a career-based service and promotion for 
existing  staff,  scientific  or  otherwise,  is  their  only  way  up  the  ladder.  All  appointments 
and  promotions  are  made  by  the  Public  Service  Commission,  PSC.  .  One  drawback  on 
the neutrality of the staff is that the body that is responsible for staff appointments and 
promotions, the Public Service Commission, PSC, is appointed by the President for a six 
year  term  and  is  widely  known  that  its  membership  is  composed  of  people  who  have 
political  party  affiliations,  both  in  government  and  opposition.  Appointment  to  a 
permanent  post  means  job  security  and  since  appraisals  are  not  yet  linked  to 
performance this has a negative effect on productivity. Since appointments are made by 
the PSC, civil servants are “immune” to political threats at their present post.  

The situation is almost the opposite in the private sector where jobs are position-based 
and  of  course  there  is  very  limited  job  security.  Job  mobility  exists  for  non-university 
level staff and administrative officers. The civil service law, N.1/90 and all its subsequent 
amendments  and  its  pertinent  regulations,  clearly  define  the  rights  and  obligations  of 
civil servants. On appointment to each post every employee works to a Job Description, 
which  is  known  when  the  job  is  advertised.  This  forms  the  framework  of  their 
employment  duties.  If  one  wants  to  leave  the  civil  service  and  get  a  job  in  a  state 
organization  (i.e.  state  university)  or  municipality  then  they  have  to  resign.  The 
regulations  and  laws  pertaining  to  these  organisations  are  similar  to  the  civil  service 
laws, in some cases identical (such as the retirement law and benefits) but appointments 
and  control  is  exercised  by  Governing  Councils  or  Municipal  Councils,  respectively, 
instead  of  the  PSC  and  Council  of  Ministers.  Provisions  now  exist  so  that  central 
government pension contributions are transferred to the other state organizations, since 
for most of them they have the same retirement and pension law and conditions. 

155 

 
 
 
HR system 
(Career vs. position 
based) 

Career 

Employment status 
(civil servant as 
standard; dual; 
employee as 
standard) 
Civil Servant as 
standard 

Differences 
between civil 
servants and public 
employees 
(high, medium, low) 
Low 

Turnover 
(high, medium, low) 

Low 

3.2  Civil service regulation at central government level 

The present system is characterized by major inflexibility as regards the mobility of staff, 
the method of annual evaluations, the degree of productivity and any awards for merit. 
This  means  that  productive  staff  are  treated  and  evaluated  equally  with  not  so 
productive staff. When new needs arise, due to the inflexibility of mobility of staff, new 
staff may need to be appointed (this was done before the freeze on appointments), thus 
increasing the number of PA staff, instead of transferring existing staff from other parts 
of the civil service. 

In  order  to  rectify  the  above  situation  the  Unit  for  Administrative  Reform  and 
Development, which is coordinating the effort  for  PAR, has submitted to Parliament the 
following legislation, in Q4/2016, in order to create the legal framework needed in order 
to implement the proposed reform: 

  New staff promotion system, which would overcome promotions by seniority 

and take into   account merit and performance 

  New performance appraisal system 
  Proposals to enhance and extend mobility of staff 
  Pay increases linked to the financial sustainability of the state 
  Proposal 

for  restructuring  Ministries/Departments  and  setting  up  of 

corresponding benchmarks 

  Reform of PSC so that it incorporates modern methods of interview appraisals 

and evaluation of candidates 

The above reforms were aiming to change the stagnation of the last 20 years as regards 
PAR  and  to  incorporate  into  the  civil  service  those  elements  that  would  improve 
performance and productivity. This is a needed requirement due to the reduction in staff 
(between  2012-2016,  about  4,500  or  5.9%  of  the  central  government  workforce1)  and 
corresponding  increase  in  demands  particularly  in  development  projects  that  are  badly 
needed  in  order  to  get  the  economy  moving  again.  Local  Government  workforce  had  a 
smaller  decrease  from  4,82  in  2010  to  4,06  in  2015.  Even  with  this  reduction  in  staff 
Cyprus still has a high number of PA Employees (8,1% in 2015) as a percentage of total 
employment and above the EU28 average of 6.9% (2015), as given by Eurostat NACE. 

1  We  do  not  have  further  information  regarding  inconsistency  between  these  data  and 

the Eurostat data presented in chapter 1. 

156 

 
 
 
                                           
 
3.3  Key characteristics of the central government HR System 

There are two distinct bodies responsible for HRM, one is the Public Service Commission 
(PSC)  appointed  by  the  President,  as  foreseen  by  the  Constitution,  with  tenure  beyond 
that  of  the  President  who  appoints  them  and  is  independent  of  all  Ministries,  which  is 
responsible  for  appointing  civil  servants.  The  PSC  is  also  responsible  for  promotions  of 
staff. The other body is the Public Administration and Personnel Department, PAPD of the 
Ministry  of  Finance,  which  approves  job  descriptions,  salary  scales  for  each  type  of  job 
and type of position, in collaboration with the respective Ministry or Independent Office. 
Once  approved  posts  will  be  included  in  the  corresponding  budget  of  the  entity 
concerned,  which  is  then  submitted,  through  the  Council  of  Ministers,  to  parliament  for 
their  approval.  This is  obviously  a  very  centralized  procedure.  The  annual  evaluation  of 
staff  is  the  responsibility  of  the  immediate  supervisors  of  the  employee  in  each  entity. 
The  annual  evaluations/appraisals  are  then  forwarded  to  the  PSC  for  inclusion  in  the 
personal  file  of  each  employee  and  of  course  are  used  by  the  PSC  for  evaluating 
employees  for  promotion.  The  development  and  training  of  employees  is  the 
responsibility  of  the  entity  to  which  they  are  appointed.  For  training  that  requires  fees 
and other  expenditure it is necessary that there is provision in the budget of the  entity 
concerned, which means that this has to be approved during the budgeting procedure by 
both  the  Ministry  of  Finance  and  Parliament.  When  candidates  for  a  post  which  is 
advertised  or  for  a  post  for  promotion  within  the  service,  the  “home  entity”  involved, 
usually the Director of the Service participates in the interview at the PSC, makes his/her 
recommendation  and  then  leaves.  It’s  the  PSC  that  makes  the  final  decision.  Also  the 
various  entities  involved  in  filling  a  certain  post  may  form  an  advisory  committee, 
approved  by  the  responsible  Minister,  which  submits  a  “short-list”  of  candidates  to  the 
PSC.  The  PSC  maintains  the  right  to  invite  anyone  else  left  out  of  the  short  list.  The 
system is a vertical, career-based one.  

The only involvement of trade unions is at the stage of collective bargaining concerning 
salary  scales  and  pay  reviews.  Very  recently,  given  the  conditions  set  by  the  “troika” 
they  have  agreed  with  government  to  continue  the  freeze  on  new  recruitments  and  to 
link  pay  increases  due  to  cost  of  living  changes  to  the  increase  in  the  annual  GDP. 
Ideally the system should not have any political influence given the existence of the PSC, 
although  this  cannot  be  ruled  out.  In  general,  however,  the  civil  service  system  is  not 
greatly  influenced  by  the  political  party  of  the  day  and  Cyprus,  being  a  former  British 
colony,  follows  the  Anglo-Saxon  system  of  government,  where  civil  servants  should  be 
apolitical in their work, although they are allowed by law to put themselves forward for 
election to political office. However, if elected they have to resign. If they are not elected 
they are forced to take 40 days leave, as a “cooling-off” measure. 

The  salary  system  is  a  fixed  system  and  the  only  way  one  can  increase  their  pay  is  by 
working  over-time  and  even  that  is  limited  to  salary  scales  below  middle  management 
level.  Thus  a  Director  of  a  Service  or  Head  of  a  Unit  are  expected  to  work  extra  hours 
without extra payment. 

In  each  ministry  or  independent  office  there  is  a  top  management  team  that  becomes 
involved in the appraisal, evaluation and short listing of candidates for recruitment or for 
the annual evaluations of existing staff. 

157 

 
 
 
 
Coherence among 
different 
government levels 

(high, medium, low) 

compensation level 
vs. private sector 
(much higher, higher, 
same, lower, much 
lower) 

Formal politicization 
through 
appointments 

(high, medium, low) 

Functional 
politicization 

(high, medium, low) 

Medium (It depends 
on complexity of issue 
and related “political 
cost”) 

Higher, although top 
managerial posts are 
lower than private 
sector 

Medium-Low (although 
for top management 
posts this could be 
high) 

Low 

4  POLITICAL ADMINISTRATIVE SYSTEM AND POLITICAL ECONOMY  

4.1  Policy-making, coordination and implementation 

Invariably  political  influence,  even  in  democracies,  is  exercised  by  many  pressure 
groups,  trade  unions,  business,  associations  and  others.  It  is  not  a  coincidence  that 
many contribute, directly or indirectly, to election funds of parties and candidates. This is 
pointed  out  in  the  4th  Evaluation  Round  of  the  Council  of  Europe’s  Greco  Report  for 
Cyprus,  July  2016  [(regarding)  “development  of  legislation  for  the  transparency  of 
political financing are prime examples of reforms to adjust domestic legislation to Council 
of  Europe  standards  and  recommendations  by  GRECO”  ……  “although  Transparency 
International’s  Corruption  Perception  Index  has  ranked  Cyprus  among  countries  less 
affected  by  corruption  (32  out  of  168),  other  surveys  indicate  that  corruption  is 
perceived  to  be  widespread  in  the  country;  in  particular,  in  respect  of  political  parties 
and politicians” ]. 

In  Cyprus  the  link  between  key  actors  outside  the  system  and  the  implementation  of 
policies and their details is mainly the job of Ministers. “Unofficial contacts” may also be 
maintained by Permanent Secretaries and Directors of services. On the other hand there 
are  various  fora  where  open  dialogue  may  take  place  between  the  various  interest 
groups,  a  very  good  example  is  the  open  and  transparent  discussions  between  the 
government,  unions  and  employers  on  issues  of  pay  and  labour  relations.  Professional 
associations  also  take  part  and  submit  open  position  papers  on  various  issues.  An 
example  of  an  on-going  open  discussion  is  the  setting  up  of  a  National  Health  Service, 
where various interest groups, prominent among them are the doctors and nurses of the 
state sector and those of the private, who agree on the principle but not on the details. 
Citizen participation also takes place and is very vociferous when it comes to reforming a 
major  road  in  a  built-up  area,  particularly  one  with  shops  on  either  side.  The 
mechanisms,  framework  and  tradition  for  transparent  discussion  and  stakeholder 
participation  exist.  However,  in  some  cases,  the  democratic  need  for  transparency  and 
open  discussion  may  delay  the  implementation  of  a  development  project  that  everyone 
agrees is needed, as in the case of new sewerage plants. 

The relationship between the political level and the administration is a stable one in the 
sense that whenever there is a change in political leadership the civil service staff remain 
the  same.  The  few  advisors  to  the  Minister  may  change  but  from  Permanent  Secretary 
downwards all staff cannot lose their jobs. The staff that is transferable from Ministry to 
Ministry may be transferred either during the tenure of a certain political administration 
or  at the beginning. Here job security for the  permanent civil service  staff makes them 

158 

 
 
 
 
immune  to  political  “manoeuvring”.  [On  the  other  hand  it  may  not  be  all  that  good  on 
productivity].  Thus  there  is  stability  in  the  administrative  system.  Even  if  a  Permanent 
Secretary is transferred the Directors of the various services in that entity are still there 
and they represent the expertise in their specific remit.  

The  type  of  policy  that  is  pursued  and  the  methodologies  for  implementing  policy 
decisions does change from one political change to  the other. However the expertise of 
the permanent staff acts as a buffer and a safety net to abrupt changes that may cause 
a lot of difficulties if new approaches or policies are implemented without considering all 
the options. For many issues external services are used in order to secure the services of 
experts in many fields, some technocratic others political or both. Again the system has 
enough  checks  and  balances  to  ensure  that  the  good  intentions  of  an  outsider  fit 
properly into the bureaucracy and demands of the system, which at the end of the day is 
going  to  be  checked  for  its  legitimacy  and  proper  use  of  funds  by  the  Office  of  the 
Auditor General. Also there is bureaucracy due to the provisions of European Laws, such 
as  the  tendering  procedures.  That  is  another  dimension  that  the  public  administration 
has to handle, which is not widely known outside the civil service. The application of the 
aquis communautaire in the private sector is much simpler than that in the public sector. 
The engagement of external advisers and experts is on the increase, in particular when 
difficult  and  complex  decisions  have  to  be  taken,  such  as  the  privatization  of  state 
companies (ie ports, telecommunications, etc). Normally such services are tendered for 
and the minister(s) do not have a major say in their selection. However their “political” 
influence on certain issues may be decisive.  

Administrative  autonomy  exists  but  always  in  respect  to  the  limits  that  each  entity’s 
budget allows. These limits are monetary but also extend to the type of activities allowed 
under  each  budget  line.  Thus  funds  may  be  available  but  the  type  of  expenditure  may 
not be foreseen in the budget approved. Hence various types of expenditure have to be 
foreseen  a  year  before  approved  in  the  budget.  Each  minister  has  contact  with  lower 
levels,  usually  through  the  Permanent  Secretary.  This  is  stated  in  the  civil  service  law 
and this provision gives the “mandarins” who head the administration in each ministry a 
substantial  weight  over  the  opinions  of  “lower”  level  staff,  since  it  is  the  Permanent 
Secretary  who  will  have  a  major  say  in  the  annual  reports  of  the  higher  level  staff  of 
each ministry. Thus “mandarins” can have a positive as well as a negative effect on each 
minister’s  political  deliverables.  Of  course  the  Council  of  Ministers  may  decide  to  rotate 
them  to  another  ministry  but  there  the  other  ministers  involved  will  have  a  say  “who 
goes where”. Thus the problem of transfer is not a simple issue. Surely if the President 
who appoints the ministers wants a certain transfer then things become easier, however, 
a  minister  will  have  to  convince  the  president  for  the  need  for  such  a  change  and  the 
consequent effect on other “mandarins”. It is for this reason that such transfers are not 
an  everyday  event.  They  do  occur  in  the  tenure  of  a  President  but  usually  to  a  limited 
extent. 

Distribution of powers 

Coordination quality 
(high, medium, low) 

Fragmentation 
(high, medium, low) 

Power concentrated in central 
government 

Low 

Medium 

159 

 
 
 
 
 
Political economy 
(liberal – coordinated) 

Interest 

intermediation 
(corporatist – 
pluralistic 

Citizen participation 
(strong – weak) 

Policy style 

Coordinated 

Corporatist 

Medium to weak 

Incremental 

Sources of 
policy advice 
(mandarins, 
cabinets, 
external experts) 

Administrative 
autonomy 
(high – medium 
– low) 

Mandarins, 
External experts 

Low 

Patronage & 
politicization 
(formal, 
functional 
(merit – 
patronage) 
(high – medium 
– low) 
Merit (but with a 
system that 
evaluates 
everyone as 
“Excellent”) 
High 

Public Service 
Bargains 
(Agency – 
Trustee) 

Stability 
(high – low – no 
turnover after 
elections) 

Not usually used 

Very High 

4.2  Administrative tradition and culture 

The administrative tradition in Cyprus follows the Anglo-Saxon culture due to the link to 
almost  a  century  of  British  Colonial  rule.  However,  this  was  interlinked  with  a  Greek 
tradition and legacy, especially after independence in 1960 (as well as a Turkish tradition 
for  the  Turkish  Cypriot  community).  Thus  with  Cyprus  entering  the  EU  on  top  of  these 
traditions the EU aquis and its laws were also superimposed. Traditionally Cyprus is ruled 
by coalitions of centre-right Governments, in which the large communist party of Cyprus 
was  on  many  occasions  a  coalition  member.  Thus  the  welfare  state  component  was  a 
major  factor  in  government  policy,  as  well  as  the  follow-on  tradition  from  the  British 
welfare state system. Thus a social democratic, mixed economy model exists, even after 
the “troika” intervention. Taking care for the poor and under privileged is always a major 
government  component,  which  became  more  pronounced  after  the  Turkish  invasion  of 
1974,  which  created  refugees  of  more  than  35%  of  the  population.  Thus  inevitably  a 
culture  for  serving  the  public  interest  was  further  enhanced,  which  over  the  years  may 
have been overstated, becoming one of the factors of the financial crisis. Small societies 
tend  to  be  more  open  than  larger  ones,  where  Ministers,  Mayors  and  the  system  in 
general is more accessible to the layman. A major problem that was faced was the fact 
that  public  administration  was  expanded  by  each  successive  government  in  order  to 
meet  various  needs,  and  based  on  the  “troika”  findings  it  became  bigger  and 
unsustainable,  thus  the  need  of  cutting  4500  jobs  in  the  period  2013-2016,  a  target 
which was almost achieved for central government.   

Administrative culture 
Rechtsstaat, Public Interest 

Rechtsstaat 

Welfare state 
(liberal, conservative, social-
democratic) 
Social Democratic 

Public Sector openness 
(open, medium, closed) 

Medium (becoming more 
transparent and open) 

160 

 
 
 
 
 
 
 
 
Managerial vs 
Procedural 
(Managerial. Mixed, 
Procedural) 

Procedural 

Red Tape 
(regulatory 
density) 
(very high to very 
low) 
High 

Discretion/autono
my 
(high, low, medium) 

Low 

Key PA Values 

Independence 
Integrity, 
Loyalty, 
Professionalism 
Accountability, 
Respect, 
Impartiality, 
Good Faith, 
Responsibility 

The overall administrative culture that developed over the years since independence was 
one  of  a  strict,  hierarchical  system  with  many  regulations  and  laws  and  red  tape 
contributing  to  the  output  delivery  of  the  system.  This  limited  the  autonomy  and 
flexibility  of  public  officials  and  curtailed  their  initiative.  This  became  even  more 
pronounced after the financial crisis and the interventions of the Auditor General, which 
resulted in a number of cases going to court.  Irrespective  of the judicial outcome,  staff 
are much less inclined to show initiative now than they were some years ago. As seen by 
the  Hofstede  Table  below,  the  above  situation  may  also  be  due  to  the  national  culture 
characteristics.  In  the  Table,  for  comparison  and  discussion  purposes  the  values  for 
Greece  and  the  UK  were  also  included,  since  both  countries  played  a  role  in  the  past 
(and continue today) in formulating Cypriot national culture.  

there  are  much  higher  values 

As  can  be  seen  the  figures  for  Cyprus  and  Greece  are  similar  in  three  dimensions  and 
those  of  the  UK  are  similar  on  the  last  two  dimensions  (“Long  Term  Orientation”  and 
“Indulgence”). The differences may be explained by the influences of the British Colonial 
era  on  Cyprus  and  the  religious  and  cultural  ties  between  Cyprus  and  Greece.  The  UK 
numbers  show  an  Anglo-Saxon  society,  tradition  in  innovation  and  a  major  economy. 
Using  the  numbers  of  the  Table  below  for  Cyprus,  for  Power  Distance,  the  society 
accepts hierarchy and the notion that there is an unequal distribution of power. The very 
lower  value  than  the  EU  average  for  “Individualism/Collectivism”  may  be  due  to  the 
culture of the extended family and “collectivism” of people, especially in small societies, 
although 
for  Malta  and  Luxembourg.  For 
Masculinity/Femininity  the  score  is  low  and  conforms  to  a  small  society  that  cares  for 
others and quality of life and is much lower than the EU average. This may be related to 
the troubled history of  the country  over many  centuries and the “supportive  culture” in 
society. Given the history of the country, on the cross roads of different civilisations and 
the  changes  in  colonial  masters  over  the  years,  then  the  low  score  is  understandable. 
The  “unknown”  is  to  be  avoided  (“Uncertainty  Avoidance”),  perhaps  one  of  the  major 
reasons why PAR  did not take place until the  “troika”  forced it upon  Cyprus because  of 
the  financial  crisis.  It  is  also  the  reason  why  there  are  so  many  regulations  governing 
issues  in  public  administration.  The  “Long-Term  Orientation”  measure,  which  is  similar 
for all three countries and below the EU28 average, is that in all three countries tradition 
is valued very highly and in the case of Cyprus is considered a cornerstone to its survival 
given  its  political  problems.  This  also  justifies  the  reluctance  for  change.  The  last 
indicator,  “Indulgence/Self-restraint”,  with  a  score  of  50  gives  no  clear  indication  as  to 
the societal characteristic for Cyprus, and hence no clear preference between Indulgence 
and Restraint can be established. 

161 

 
 
 
 
Table: Hofstede national culture dimensions 

Dimension 

Power Distance 

Individualism/Collectivism 

Masculinity/Femininity 
Uncertainty Avoidance 
Long-term Orientation 

Indulgence/Self-restraint 

Value 

Average E28 

CY 

GR 

UK 

63 

8 

21 
52 
45 

50 

60 

35 

56 
100 
45 

50 

35 

89 

66 
35 
51 

52 

68 

68 

45 
70 
57 

57 

Sources: Merritt A. (2000), "An attempt to replicate Hofstede's four dimensions", in 
Cross-Cultural Analysis. The Science and Art of Comparing the World's Modern Societies 
and Their Cultures, SAGE Publications inc, 2013. The Geert Hofstede’s national culture 
dimensions used were provided EIPA, https://geert-hofstede.com/national-culture.html.2 

5  GOVERNMENT CAPACITY AND PERFORMANCE  

As discussed in previous sections and in other reports submitted, although Cyprus has a 
well-educated and experienced civil service, at a central planning and strategic level the 
performance  of  government  does  not  reflect  this  competence  of  its  PA  system.  This  is 
not  due  to  an  impartial  civil  service  which  blocks  the  policies  of  the  government  of  the 
day. The root of the problem lies in the prevailing culture and the inability to establish in 
time  needed  actions.  In  fact  major  PA  reforms  became  reality  only  due  to  the  financial 
crisis  and  were  imposed  by  the  country’s  lenders  (the  “troika”).  Some  badly  needed 
reforms are still pending and were not approved by parliament. 

A striking example of a long drawn out reform that has lasted at least three presidencies 
(15  years)  is  the  establishment  of  a  National  Health  System,  NHS.  Many  studies  have 
been  carried  out,  millions  spent  on  foreign  experts  and  advisors  and  yet  the  state 
hospitals,  which  are  part  of  the  civil  service,  are  running  on  the  1960  model  inherited 
from the colonial era. The issue of having state universities started in the 1960’s and the 
first  state  university  law  was  passed  in  1988  (the  University  of  Cyprus).  Three 
presidencies ago it was included in the government programme of the then presidential 
candidate  and  later  president  (Papadopoulos  2003-2008)  to  form  municipal  complexes 
for municipalities on services such as sewerage, dustbin collection, green points etc. The 
law is still before parliament today with urgent requests by the Minister of the Interior to 
pass it since now we have superimposed on that an economic crisis and the need to cut 
costs  and  produce  more  effective  and  efficient  systems.  If  an  issue  has  many 
stakeholders  in  conjunction  with  political  cost  and  economic  interests  then  the  political 
elite  (not  the  civil  servants)  are  not  willing  to  take  the  “political  cost”  to  make  the 
necessary  change.  The  most  profound  evidence  for  this  occurred  during  the  period 
before  the  financial  collapse  when  academics  and  some  politicians  were  strongly 

2  Interpretation:  power  distance  (high  value  =  higher  acceptance  of  hierarchy  and  unequal 
distribution of power); individualism (high value = stronger individualist culture); masculinity (high 
value  =  higher  masculinity  of  society);  long-term  orientation  (high  value  =  stronger  long-term 
orientation); indulgence (high value = indulgence) 

162 

 
 
 
 
 
 
 
 
 
                                           
 
submitting to government the need for spending cuts and urgent reform but nothing was 
done.  This  was  done  when  the  system  was  ready  to  collapse,  just  before  the  financial 
crisis and the “troika” intervention. At present the state hospitals are in a dire situation 
with  doctors  leaving  the  “safe”  state  sector  and  going  to  the  private  sector.  Years  of 
endless  discussion  regarding  the  establishment  of  a  NHS  has  resulted  in  this  situation, 
with  no  one  willing  to  take  the  final  decision,  although  everyone  is  in  principle  for  the 
establishment of a NHS. This crisis situation may, at last, force politicians to put together 
the  required  strategy,  capacity,  regulation  and  coordination  so  as  to  realise  an  NHS. 
Thus  the  culture  and  norm  up  to  now  was  if  there  is  political  cost  leave  it  for  the  next 
government  and  make  up  the  financial  cost  by  borrowing.  When  the  situation  reaches 
crisis point then the government of the day would need to pick up the pieces and realise 
the issue at hand. The comments on the indicators below reflect the above situation. 

5.1  Transparency and accountability 

In  2015  Parliament  passed  Law  N.  205(I)/2015,  which  “foresees  the  establishment  of 
rules which govern the further use of information held by public/state entities”. The law 
adopts  into  national legislation  European  Directives  2003/98/EK  and  2013/37/EE  of  the 
European  Parliament  and  Council.  A  freedom  of  information  draft  law  was  tabled  to 
parliament in October 2015 by the Ministry of Justice and Public Order, with the aim of 
harmonizing Cypriot law with that of other EU member states on this issue. The draft is 
still outstanding. 

Sources: Bertelsmann Stiftung, European Commission, Worldbank, Transparency 
International, Gallup World Poll. 

Note: The ranking of the Gallup perception of corruption is based on 27 countries, and 
on the 2009 values for Estonia and Latvia. 

It is obvious from the above indicators that in general the EU ranking for Cyprus is either 
stagnant  or  a  very  small  improvement  is  observed.  As  regards  access  to  government 
information, there is “access by citizens to government information” through web sites of 
all  ministries  and  government  departments,  however,  this  clearly  is  below  higher 
standards and places Cyprus last among all EU Member States. This goes hand in hand 
with  the  second  indicator,  “Transparency  of  Government”,  where  Cyprus  is  not  last 
(22/28)  but  obviously  needs  to  be  drastically  improved,  in  particular  in  relation  to  the 
transparency  available  in  other  member  states.  This  may  also  be  related  to  the  high 
Hofstede  “Power  Distance”  culture  (63).  People  accept  hierarchy  and  are  thus  satisfied 
by “being informed” of what will happen by government when it happens.  

The  second  indicator  concerning  “Transparency”  also  reflects  the  prevailing  culture  of 
accepting  what  is  presented  by  higher  authority  and  not  demanding  higher  levels  of 

163 

Value 2014EU28 rankValue 2016EU28 rankΔ ValueΔ Rank3.00283.00280.000Value 2013EU28 rankValue 2015EU28 rankΔ ValueΔ Rank35.712243.2922+7.580Value 2010EU28 rankValue 2015EU28 rankΔ ValueΔ Rank1.02181.0415+0.02+31.00140.9813-0.02+163.00            1461.0015-2.00-1Value 2010EU28 rankValue 2014EU28 rankΔ ValueΔ Rank70.001576.0017+6.00-2Gallup perception of corruption (%) TI perception of corruption (0-100)IndicatorAccess to government information (1-10)Transparency of government (0-100)Voice and acccountability (-2.5,+2.5)Control of corruption (-2.5,+2.5) 
 
 
 
 
transparency.  With regard to “Voice and accountability” the rank has improved over the 
last  years,  although  it  is  still  below  the  EU  average.  There  is  a  democratic  tradition  to 
express  opinion  and  hold  higher  authority  responsible  for  its  actions.  “Control  and 
Perception  of  Corruption”  are  a  citizen’s  perception  concerning  corruption.  This  is  not 
very high since so many cases are still before the courts, with no apparent judicial result. 
One of the major problems in Cyprus is the slow judicial process which leaves the public 
with  a  perception  that  either  corruption  is  not  dealt  with  or  that  the  system  is  very 
corrupt.  Whereas  if  there  were  faster  judicial  processes  then  in  the  cases  of  guilty 
verdicts  people  will  see  that  justice  has  been  served  and  in  cases  of  innocent  verdicts 
that  not  everyone  is  corrupt.  There  have  been  both  types  of  verdicts  given  so  far  but 
there  are  many  more  pending  cases  still  to  be  judged,  thus  giving  a  negative  public 
perception as regards corruption in the system.  

The  last  indicator  reinforces  the  above  argument.  Because  of  the  more  “Collectivist” 
society of the “we”, in Hofstede’s dimensions (8), with an EU average at 68, has also a 
negative perception as regards fighting corruption, since “culturally” people assume that 
there is a higher chance of a cover-up by the more “collectivist” society. In other cases 
this is a positive factor that may provide help to a wider range of people in need. There 
is  generally  a  lack  of  very  effective  coordination  between  government  departments  to 
tackle  problems  and  this  is  a  deficiency  in  the  administration’s  capacity  to  tackle 
problems, including corruption and transparency in government decision-making. 

5.2  Civil service system and HRM 

Sources: Quality of Government Institute Gothenburg.  

The  financial  crisis,  with  the  bail-in  on  bank  accounts  for  ordinary  citizens,  and  some 
other local scandals have not helped at all and explain the reason why Cyprus is ranked 
28  as  regards  “impartiality”.  People’s  perception,  after  the  trauma  of  the  banking  crisis 
and various other local scandals and events that have gone to court and guilty verdicts 
given, is not positive, although the value has gone up by 1.65 the ranking still fell to 28. 
Focussing on the civil service and HRM, a lot of the above decisions were political and do 
not  reflect  the  impartiality  of  the  civil  service  or  its  capacity  to  respond  to  crises.  This 
may  be  an  undue  perception  by  the  public  since  any  decisions  of  the  PSC  may  be 
challenged  in  court.  However,  under  the  intense  public  outcry  against  the  political 
system the PSC may be an undue victim. There is political “neutrality” of the permanent 
civil service staff, irrespective of  changes in government. The  civil service is still one of 
the most attractive employers, providing job security, good pension scheme and almost 
free  access  to  the  state  health  care  system.  A  major  weakness  is  the  inability  to  get 
government  departments  to  act  together  on  time  and  in  a  focussed  way.  On  the  other 
hand the civil service still has very highly educated and competent staff, which under the 
correct environment can produce very effective results, as it has done in the past. This is 
reinforced  by  the  “Civil  Service  Professionalism”  indicator  for  2015  which  gives  Cyprus 
3.8/7.0,  ranking  Cyprus  19/28.  Thus  the  system  can  be  improved  and  is  not  held  back 
due to the lack of professionalism or expertise of the staff concerned. 

164 

Value 2012EU28 rankValue 2015EU28 rankΔ ValueΔ Rank3.25164.9028+1.65-12Value 2012EU26 rankValue 2015EU26 rankΔ ValueΔ RankImpartiality (1-7)IndicatorProfessionalism (1-7)Closedness (1-7) 
 
 
5.3  Service delivery and digitalization 

Sources: European Commission Digital Economy and Society Index UN e-government 
Index, EU Scoreboard Public innovation, Eurobarometer num.417, World Bank Ease of 
Doing Business. 

Given  the  high  level  of  university  graduates  in  the  population,  as  reported  by  the 
Statistical  Service  for  Cyprus,  is  33.5%  in  Tertiary  education  for  Q4/2016  and  35%  for 
the  academic  year  2013/14.  Yet  Cyprus  has  a  much  lower  performance  than  other 
countries  in  the  EU  as  regards  the  use  of  e-governance.  Indicatively  for  the  academic 
year  2013/14  the  Statistical  Service  records  20,170  students  attending  universities 
(about  2.3%  of  the  population).  In  the  civil  service  59.72%  of  the  employees  have  a 
university or postgraduate degree (2015 annual report).IT infrastructure is available but 
the  main  barrier  to  extending  e-government  to  all  levels  of  society  is  the  resistance  to 
change as regards on-line services in conjunction with the low level of transparency and 
availability of information, described above.  

As regards services to individual citizens this, as explained above, may also be linked to 
the  national  culture  as  given  by  Hofstede,  where  “Uncertainty  Avoidance”  is  a 
predominant  feature  and  hence  the  seeking  of  “a  human”  contact  in  a  ministry  is 
preferable  to  the  faceless  on-line  service.  Thus  the  four  first  indicators  above  may  be 
explained  by  this  and  by  the  fact  that  the  overall  EU  ranking  between  the  years  2011 
and  2015  is  about  the  same.  Although  absolute  values  have  increased  so  have  the 
relative  values  of  other  member  states.  The  population  of  other  member  states  is 
apparently more easily inclined to “trust” on-line services and this reflects negatively on 
Cyprus where an e-government culture still needs to be improved.  

The  last  two  indicators  concerning  business  in  Cyprus  has  been  hampered  by  the 
ineffective  availability  of  a  “one-stop-shop”,  which  was  a  policy  of  the  last  three 
governments. It has been offered recently but it is still untested. This makes foreign and 
local  investors  reluctant  to  set  up  a  business  in  Cyprus,  although  there  are  good 
examples of this, such as the Byelorussian firm Wargaming which has its headquarters in 
Cyprus. Recently the government has approved a system for attracting innovators from 
third  countries  to  come  and  set  up  a  start-up  firm  in  Cyprus.  Thus  the  last  three 
indicators may improve in the near future due to these developments, although Cyprus 
is last in the EU as regards spending on innovation. As regards setting up businesses this 
will be judged by the new framework that at last has been put in place (3/2017), but is 
still not proven. It is to be seen if the government administration under the new system 
will be able to provide the required service. Again this would not be due to the inability 

165 

Value 2013EU28 rankValue 2015EU28 rankΔ ValueΔ Rank10.152517.1120+6.96+555.001159.5713+4.57-259.572273.4321+13.86+1Value 2010EU28 rankValue 2016EU28 rankΔ ValueΔ Rank0.37250.5425+0.170Value 2013EU27 rank38.006Value 2015EU28 rank34.5021Value 2011EU28 rankValue 2016EU28 rankΔ ValueΔ Rank69.141772.6524+3.51-7Online services (0-1)Barriers to public sector innovation  (%)Online service completion  (%)IndicatorE-government users  (%)Pre-filled forms  (%)Services to businesses (%)Ease of Doing business (0-100) 
 
 
 
 
or  expertise  of  existing  staff  but  due  to  the  inter-departmental  bureaucracy  which 
hopefully can now be avoided. 

5.4  Organization and management of government 

Sources: Bertelsmann Stiftung, Quality of Government Institute Gothenburg.  

The  three  indicators  above  confirm  the  evaluations  so  far  as  regards  the  government’s 
very low capacity given in the previous sections and in other reports that, although there 
is  a  highly  educated  and  experienced  staff,  there  is  a  distinct  lack  of  coordination, 
implementation and planning on behalf of the system. In order to realise all three of the 
above  it  is  a  prerequisite  that  more  than  one  government  department  should  become 
involved. Since Cyprus  is a highly centralised state, with the Ministry of Finance having 
the  central  role  of  approving  any  development  project  financing,  then  inter-ministerial 
cooperative culture has to be linked to the other “executive” ministry(ies) which have to 
realise  projects.  The  problem  has  been  identified  and  in  particular  the  slow  take-up  of 
new ideas that exists. In order to improve this situation each ministry has developed its 
own  Key  Performance  Indicators,  KPI’s,  but  unfortunately  to  date  no  other  action  has 
been  taken  so  as  to  monitor  and  assess  if  goals  are  reached  based  on  the  KPI’s.  They 
are there as an objective but no one is held responsible if a KPI is not realised on time. 
Again  the  resistance  to  change  in  a  very  conservative  society  is  a  major  barrier  and  it 
has still to be overcome. It’s a start but in order to improve the above indicators again a 
culture change is needed. Based on the Hofstede ratings “Long Term Orientation” is 45, 
against  57  for  the  EU  average.  A  low  rating  means  that  countries  honour  long  term 
traditions.  Obviously  Cyprus  has  an  intermediate  score,  lower  than  the  EU  average, 
which,  means  that  it  needs  to  increase  this  score  in  order  to  improve  on  the  above 
indicators and catch up on other member states with a higher score in this area.  

5.5  Policy-making, coordination and regulation 

Sources: Bertelsmann Stiftung, Worldbank. 

On the first two indicators Cyprus is below the EU average with a middle score. Societal 
consultation  does  take  place,  in  fact  many  development  projects  may  be  delayed 
because in many cases there is too much consultation with various pressure groups and 
lobbyists  opposing  the  entire  project  or  certain  features  of  it.  This  is  partly  due  to  the 
fact that there is poor transparency to begin with which raises suspicion, sometimes on 
issues which are not valid. This again results in project delays and thus implementation. 
As  for  the  last  two  indicators  Cyprus  is  ranked  just  below  the  EU  average,  although  it 

166 

Value 2014EU28 rankValue 2016EU28 rankΔ ValueΔ Rank2.00283.0024+1.00+43.83284.1728+0.3402.71283.1428+0.430Value 2012EU26 rankValue 2015EU27 rankΔ ValueΔ Rank4.8021IndicatorStrategic planning capacity (1-10)Interministerial coordination (1-10)SGI Implementation capacity (1-10)QOG Implementation capacity (1-7)Value 2014EU28 rankValue 2016EU28 rankΔ ValueΔ Rank5.00155.00170.00-24.00194.00190.000Value 2010EU28 rankValue 2015EU28 rankΔ ValueΔ Rank1.43101.0617-0.37-71.20131.0116-0.19-3Rule of law (-2.5,+2.5)Regulatory quality (-2.5,+2.5)IndicatorSocietal consultation (1-10)Use of evidence based instruments (1-10) 
 
 
 
 
was ranked above in 2010. This again is linked to public perception on corruption, due to 
so  many  cases  that  are  raised,  sometimes  in  the  press,  without  either  being  officially 
charged  or  a  judicial  verdict  in  sight.  This  group  of  indicators  should  improve  if  better 
transparency is achieved and pertinent information given together with a speed up in the 
decision making of the judicial system or formal charging of those involved.  

The  use  of  the  media  to  “expose”  scandals  and  then  nothing  happens  does  not  help  in 
giving  the  public  confidence  in  the  system.  As  for  the  last  two  indicators,  the  laws  and 
regulations by enlarge are available. It’s not a lack of regulations that is the problem but 
a lack of definite action and reaching a specific decision. As regards development project 
announcements the implementation of the procedure of a Project Concept Note, imposed 
by  the  “troika”,  should  ensure  that  all  project  risks,  financing  requirements  and  basic 
design  should  now  be  established  before  a  project  is  announced.  This  would  help  in 
knowing  from  where  to  secure  the  required  funding  and  also  present  a  reasonably 
detailed “design” of the proposed project with justification as to its characteristics before 
this  is  announced.  The  objective  of  this  procedure  mainly  aims  at  facilitating  the 
improvement of the above indicators. 

5.6  Overall government performance 

Sources: Eurobarometer 85, Eurobarometer 370, World Bank, World Economic Forum. 

The above indicators for 2010 are before the financial crisis and showed a ranking in the 
top 10. In 2015-2016 this dropped substantially to below the EU average. Obviously the 
effects  of  near  bankruptcy  of  the  country  and  the  bail-in  of  depositors  could  not  have 
had  a  positive  outcome  on  the  government’s  performance,  not  even  by  its  own  civil 
servants who as citizens also lost lifelong savings, had salaries cut and some took early 
retirement  when  they  would  have  otherwise  stayed  on.  The  overall  improvement  of  PA 
over  the  last  5  years  showed  for  Cyprus  (2011),  a  deterioration  by  10  points.  These 
indicators  will  change  once  the  new  development  projects,  which  have  now  started  are 
completed and people see an improvement not only in financial statistics, for which there 
are  positive  figures,  but  also  in  real  life  projects  (roads,  buildings,  schools,  hospitals 
etc.). Based on the above tables the following overall assessment may be given, with the 
proviso  that  this  is  highly  dependent  on  the  national  financial  outcomes  and 
developments  in  the  real  economy.    The  latter  two  indicators,  based  on  projections  for 
2017-2018, should improve and may reach 2010 levels. 

As  a  recommendation  to  the  EC  it  would  be  good  to  develop  a  system  of  commonly 
agreed  national  indicators,  in  order  to  have  a  good  basis  for  comparison  of  the  service 
delivery  of  PA’s  of  member  states.  The  Indicators  should  be  developed  in  such  a  way 
that they are independent of country population size. 

167 

Value 2010EU28 rankValue 2016EU28 rankΔ ValueΔ Rank43.00828.0015-15.00-7Value 2011EU27 rank16.002Value 2010EU28 rankValue 2015EU28 rankΔ ValueΔ Rank5.0794.3815-0.69-61.53101.0418-0.49-8Government effectiveness (-2.5,+2.5)Public sector performance (1-7)Improvement of PA over last 5 years (%)IndicatorTrust in government (%) 
 
 
 
 
 
REFERENCE: 

Annual Report for 2015, Public Service Commission, June 2016 (www.psc.gov.cy) 

Country  Report  Cyprus  2017:  Including  an  In-depth  Review  and  the  prevention  and 
correction of macroeconomic imbalances. SWD(2017) 78 final, Brussels 22.2.2017.  

Law  which  “foresees  the  establishment  of  rules  which  govern  the  further  use  of 
information held by public/state entities”, N. 205(I)/2015 

Fourth  Evaluation Round: CYPRUS: Corruption  prevention in respect  of the members of 
parliament, judges and prosecutors. Evaluation Report, GrecoEval4Repo(2016)7, Council 
of Europe, July 2016 

Statistics of Education 2013/14, Report No. 46, Series I, Statistical Service of Cyprus 

National Open Data Portal, Republic of Cyprus, www.data.gov.cy 

Interviews 

1.  Mr  Harris  Tsangarides,  Town  Clerk  (Municipal  Secretary  and  Head  of 
Administration, 
top,  permanent  municipal  employee),  Aglantzia 
Municipality,  one  of  the  municipalities  which  forms  part  of  the  greater 
Nicosia area. 

2.  Mr  Marios  Michaelides,  Head,  Cyprus  Academy  of  Public  Administration, 
Ministry of Finance. The Academy offers training courses related to PA to 
civil servants 

3.  Mr  Stelios  Achniotis,  President,  Scientific  and  Technical  Chamber  of 
Cyprus,  an  NGO  body  constituted  by  law,  in  order  to  regulate  the 
engineering and architectural professions. It provides expertise and input 
when government technical projects are being planned.  

4.  Ms  Lenia  Orphanidou,  Chief  Public  Administration  and  Personnel  Officer, 
Department  of  Public  Administration  and  Personnel  (PAPD),  Ministry  of 
Finance.  The  PAPD  has  the  responsibility  of  providing  personnel 
(secretaries  and  administrative  officers)  to  all  government  departments 
and to formulate government PA policy. 

168 

 
 
 
 
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0
1
-
1
8
-
7
8
7
-
E
N
-
N

[

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a

l

o

g

u

e

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m

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]