Public sector financial sustainability reform in Portugal and in the European Union: perspectives from public management paradigms

Catarino, João Ricardo; Sobral, Susana; Nunes, Alexandre Morais

doi:10.5007/2177-7055.2025.e110134

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Original Article • Sequência (Florianópolis) 46 (100) • 2025 • https://doi.org/10.5007/2177-7055.2025.e110134 linkcopy

Public sector financial sustainability reform in Portugal and in the European Union: perspectives from public management paradigms

Reforma da sustentabilidade financeira do setor público em Portugal e na União Europeia: perspectivas a partir dos paradigmas de gestão pública

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Administrative reforms often emerge from crises, introducing new ideas of modernization and management inspired by different public administration paradigms. In Portugal, as in the wider European Union, reforms have been driven by the need to simplify administrative processes, enhance transparency, increase efficiency, and ensure financial sustainability, while also addressing persistent budget deficits and high levels of public debt. This study examines the impact of the sovereign debt crisis on the reform of the budgetary process in Portugal between 2012 and 2024. Adopting a qualitative approach, it analyzes government programs, administrative reform initiatives, reports, and national and European legal frameworks. The findings highlight how reform measures reflect the coexistence of multiple public management models with more substantial alignment to the Neo-Weberian paradigm, complemented by elements of New Public Management and New Public Governance. The research contributes to understanding the trajectory of reforms aimed at achieving long-term fiscal stability, improving administrative practices, and promoting inclusive citizenship.

Keywords:
Financial sustainability reforms; Sovereign debt crisis; Public administration; Public debt; European economic governances.

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[TFN1] Source: Authors’ elaboration based on the literature review related to public management paradigms.

Action	Most Evident Model	Description
Implementing Program-Based Budgeting	New Public Management	Characterized by a results-oriented and efficiency-driven approach rather than merely complying with rules and procedures. It tends to reflect the NPM paradigm.
Simplification and Reduction of Budgetary Process Fragmentation	New Public Management / Neo-Weberian State	Strengthens the coherence of the budgetary process and broadens the State’s overall vision of public resource management. Enhances the efficiency of public spending. It partially reflects the NPM paradigm, although the reinforcement of coherence in principles and rules also aligns with the NWS paradigm.
Increasing Bottom-Up Accountability of Sectoral Ministries	New Public Management / Neo-Weberian State	Advocates for increased accountability of public managers for results, strengthening accountability and audit mechanisms, as well as greater transparency and responsibility in the use of public resources. This measure reflects several characteristics of NPM. It also shares some features of the NWS paradigm by aiming to modernize bureaucracy and strengthen the State’s capacity.
Stability Program	New Public Governance	This measure primarily adopts characteristics of the NPG model by fostering multi-level collaboration/participation among actors, transparency in public management, coordination, and integration of economic and budgetary policies between Member States and the European Commission, as well as accountability and evaluation.
Multiannual Framework for Public Expenditures	New Public Governance / Neo-Weberian State	This measure reflects the characteristics of the NPG paradigm: multi-level collaboration/ participation, transparency, coordination, and integration of economic and budgetary policies between Member States and the European Commission, participation, continuous integration, and coordination of common policies, accountability, and the need for evaluation. It also reflects some characteristics of the NWS by emphasizing efficiency, transparency, and accountability while maintaining the robustness and discipline characteristic of classical bureaucracy.
Expenditure, Budget Balance, and Structural Budget Balance Rules	Neo-Weberian State	These rules emphasize the need for efficient management, greater budgetary discipline, transparency, and accountability, as well as a robust public administration. They embody the characteristics of the NWS, which combines elements of traditional bureaucracy with modern management practices.
The Reform of the Stability and Growth Pact of the European Union: 1999, 2005, 2012, and the New Rules of the Six-Pack and Two-Pack	Neo-Weberian State / New Public Governance	The SGP aims to increase transparency and accountability of Member States by introducing mechanisms for budgetary and debt control, as well as expanded sanctions. It reflects the principles of responsibility and discipline of the NWS. It imposes transparency and accountability through specific procedures (for excessive deficits and macroeconomic imbalances), promotes public finance clarity and accountability, and fosters multi-level coordination with EU institutions, as well as a strong and integrated public administration system. In this regard, it reflects the NPG paradigm.
Adoption of specific governance instruments in the EMU: the European Semester	New Public Governance	The European Semester appears to best reflect the characteristics of the NPG paradigm through multi-level governance, coordination, collaboration, and integration of multiple actors-both national and European-intervention by different levels of government, and the promotion of transparency and accountability in the public policies associated with it.