SGI 2022 | Latvia | Key Challenges

Key Challenges

Recent Governments Experts

SGI experts on Latvia

Iveta Reinholde

Iveta Reinholde is the professor of public administration at the Department of Political Sciences of the University of Latvia. She has considerable experience in conducting policy evaluations, working in multi-national teams and international setting on such areas as public administration reform, internal audit, human security and public services. In addition, fields of her research include EU public policy, public policy evaluation and analysis, public sector organizations and organisation theory. She is experienced in advising and designing policy recommendations for national and local governments as she is a head of Public Council of National Audit Office. Since 2014, she is an independent expert for the Congress of Local and Regional Authorities, Council of Europe. In 2019, she has been awarded with Alena Brunovska Award for Teaching Excellence in Public Administration (NISPAcee).

Visvaldis Valtenbergs

Visvaldis Valtenbergs, Associate Professor in the Faculty of Economics and Social Sciences at the University of Latvia, specializes in the areas of political participation, deliberative democracy, and technopolitics. His research focuses on understanding the dynamics of political engagement and the deliberative processes within democratic systems, particularly examining the transformative impact of information and communication technologies (ICTs) and emerging technologies on politics and governance. From 2017 to 2021, he served as a researcher in the Analytical Service of the Parliament of Latvia, where he contributed to the analysis and development of evidence-based policies. He is the scientific leader of the Project “Innovative and Inclusive Governance for the Promotion of Participation, Trust, and Communication.” Additionally, he has been a member of the Management Committee for the EU COST actions on deliberative democracy where he focuses on systematizing, conceptualizing, and enhancing theoretical and empirical knowledge about the impact of deliberative discussions on contemporary decision-making.

Daunis Auers (Coordinator)

Dr Daunis Auers is Associate Professor of Comparative Politics at the University of Latvia. He defended his PhD at University College London (UCL) and his MSc. at the London School of Economics (LSE). He has been a Fulbright Scholar at the University of California-Berkeley (2005-2006) and a Baltic-American Freedom Foundation Scholar at Wayne State University in Detroit (2014). He has widely published on Baltic and European politics. His most recent book – The Comparative Government and Politics of the Baltic States: Estonia, Latvia and Lithuania in the 21st Century – was published by Palgrave Macmillan in 2015.

Latvia’s economic growth has been stable over the long term. Thanks to sustained efforts, Latvia has implemented a sustainable budgetary policy and maintained the lowest public debt in the EU. However, the IMF, OECD, and EU recommend that Latvia address the high inflation rate and its negative consequences and increase investments in productivity.

Public trust in the government has been low for at least the last two decades, slowing some reforms. To maintain economic growth, the government must take decisive steps to reduce social inequality, poverty risk, and the shadow economy. Latvia’s tax and benefit income distribution system is inadequate, so inequality and poverty will remain challenges for the upcoming decade.

Reforms in healthcare and education are crucial for addressing the aging population and creating an inclusive labor market. Although these areas, along with security, are politically recognized priorities, the costs of these reforms must be balanced with policy outcomes and fiscal capability.

Failure to properly address education, healthcare, and the tax burden for small businesses and low-wage earners may accelerate emigration and depopulation, especially in rural areas. The administrative burden on small businesses is a significant challenge that needs addressing to foster a better business environment, moving toward more simplified reporting and accounting.

Although Latvia has developed a solid policy-planning system, the administrative burden and level of normativism have increased. Current public administration reforms aim at digitalization, innovation, and human resources development. However, the modernization plan (2023–2027) has a limited scope and neglects a whole-of-governance approach, risking further diminishing public trust in bureaucracy.

Policy coordination within bureaucracies generally functions smoothly within formal boundaries on well-known issues. However, challenges remain for public administration to effectively address complex problems. Strengthening Latvia’s resilience requires better intergovernmental policy coordination and enhanced communication with local authorities. Evidence-based policymaking also presents challenges, as external evidence producers like academia and NGO experts remain underfinanced.

After the administrative-territorial reform in 2021, local authorities continue to face challenges aligning the volume of tasks with available financial resources. More extensive dialogue between the government and local authorities is essential to improving policy implementation.

Latvia has extensive tools for public participation in decision-making; however, actual participation rates are low, limited by the capacity of individuals and NGOs. Some NGOs have accumulated experience, human resources, and financial capability, but smaller NGOs lack resources and operate within project-governed schemes, hindering their sustainability.

Latvia is committed to contributing to global environmental protection and climate change mitigation. However, decisive steps are needed to increase green energy use, energy independence, and sustainable business practices. Most habitats and species compete with extensive agriculture and the timber industry, where industrial interests prevail. Therefore, education and awareness of conservation farming and timber methods are essential in Latvia.