Recently, the government has been focused on identifying areas for cost-saving. They are also looking for ways to meet the goals set in the coalition agreement regarding reducing bureaucracy and over-regulation. I offer one solution that could help achieve all these objectives.

In 1955, British naval historian Cyril Parkinson described a phenomenon based on his observations of the British state apparatus, known as Parkinson's Law. Parkinson's Law states that the number of officials in public service tends to increase regardless of the amount of work that needs to be done. As a result, there is also a rule that the number of public servants does not decrease, even when the necessary tasks diminish.

Parkinson observed the British Admiralty and the Colonial Office and noted that, despite a reduction in the number of ships managed by the Admiralty and the number of colonies overseen by the Colonial Office, the number of officials in both departments continued to grow steadily. The Colonial Office reached its peak staff size at a time when Great Britain no longer had any colonies left to administer, and the office was eventually merged with other government departments.

After Parkinson's Law was published in The Economist, it attracted a lot of global attention. It was concluded that this law applies universally to government institutions and large private companies with many employees. Several explanations and justifications for the law's operation were sought and found.

One explanation for the functioning of Parkinson's Law is its second point, which states that work expands to fill the time available for its completion.

One example of what this law describes is a situation where a task that could take one hour to complete is given a deadline of one week. The task will indeed be finished within that week, even though the actual work is done in the final hour of the given time. In other words, the work gets completed within the allocated time, regardless of whether it could have been done more quickly.

Another example is when an employee has work hours that must be filled with activities. The employee finds tasks to occupy that time and manages to justify the importance of those tasks, both to themselves and, if necessary, to others, even though these activities may not have any real value. In this case, tasks are not performed to solve a problem or accomplish a goal but simply to fill the work hours.

When observing the Estonian state apparatus, it is clear that Parkinson's Law applies here as well. Here are a few examples.

The process leading up to Estonia's accession to the European Union in 2004 took nearly a decade, involving membership negotiations and the harmonization of Estonia's legal norms and state structures with the EU. This task engaged all ministries and a significant portion of the Estonian state apparatus. To handle this large project, the entire state apparatus was expanded and strengthened.

Estonia's accession to the European Union was a major project with clear objectives and a fixed deadline. One would expect that after completing this process, the workload of those involved would have decreased significantly, and the number of civil servants would have likewise reduced. However, this has not happened, likely due in part to the manifestations of Parkinson's Law.

Another example is Estonia's presidency of the Council of the European Union in 2017. This task involved 1,300 workers, 300 of whom were hired as additional staff specifically for this purpose. One might expect that, after fulfilling this task, the extra workers would no longer be needed. While some of these temporary hires were indeed let go, a significant number of them found permanent positions within government ministries.

At an event in 2018, I was approached by a man who introduced himself as a ministry employee. He explained that he had been hired to help with the organization of the EU presidency but, like many others brought on as additional staff, he had continued his career in the ministry with a permanent contract.

He came to me with a question, asking if, as a business owner, I could assist him. He said that in his ministry, they held weekly brainstorming sessions where officials discussed ways they could help Estonian companies. He wondered if I could provide any ideas for them to work on. This is a clear example of Parkinson's Law in action: the ministry officials had work hours to fill and they sought out activities, like brainstorming, to fill that time.

A good example is the Bank of Estonia. Until 2011, when Estonia adopted the euro, the Bank of Estonia functioned as a classic central bank. It was responsible for managing Estonia's independent monetary system and conducting independent monetary policy. Additionally, the Bank of Estonia was tasked with overseeing the transition to the euro.

The transition to the euro is complete. After the euro was fully adopted in 2011, and with the significant reduction in responsibility due to the phasing out of the Estonian kroon and the loss of independent monetary policy, one might expect that the number of employees at the Bank of Estonia would have decreased significantly compared to 2010. However, this has not happened.

For instance, why should the two highest-paid employees at the Bank of Estonia, the president and vice president, be responsible for presenting economic forecasts prepared by analysts to the media? Surely, the analyst who created the forecast could handle this presentation more effectively. Here, it seems that available work hours are being filled with "work," another indication of Parkinson's Law in action.

A few years ago, as representatives of the e-commerce association, we visited a government office to discuss specific issues related to e-commerce. There were two of us representing the entrepreneurs, but the government office had nine participants. Three departments of the agency were represented, each with a department head and two subordinates.

During the two-hour meeting, it was evident that most of the officials were bored and had nothing to contribute. The government office ended up spending 18 taxpayer-paid work hours on this meeting, even though the work could have likely been done with two to three times fewer hours – perhaps three to four people from the agency would have sufficed. This is another example of Parkinson's Law at play, where available work hours are filled with "work" regardless of necessity.

Similar practices of filling work hours likely occur in all ministries and government offices. A friend of mine who works in a ministry has described how they and their colleagues fly to Brussels at least once a month to attend "important" meetings in working groups. These trips last several days and multiple people from the same department participate in discussions about developing regulations or similar tasks.

This same acquaintance openly admits that many of these trips could easily be skipped or that having more than one person from the department attend is often unnecessary. They also suggest that many of these meetings could be conducted via video conferencing. Additionally, no one ever seems to question whether the regulation being developed is truly necessary or valuable.

The process of drafting laws and other regulations makes for a topic in itself. Many entrepreneurs complain that both in Estonia and, likely, throughout the European Union, overregulation is a growing issue. New regulations are constantly being produced. Creating regulations not only takes up the time of the officials drafting them, but once a regulation is in place, it also requires supervision and enforcement. The main problem with regulation is that its implementation and the reporting on compliance add an additional administrative burden to businesses, forcing them to spend extra time and money dealing with the regulation.

It's important to acknowledge that government officials are not malicious, lazy or anything of the sort – this is all quite human. When someone is hired to develop a regulation, they are happy to do so. The issue arises once the regulation is complete, and there is no more work to do.

The natural outcome is that once officials finish working on one regulation, they start seeking opportunities to work on the next. A large portion of the regulations created are not the result of political party platforms being implemented, but are instead initiated by ministry or European Union officials.

Parkinson's Law doesn't just apply to the Estonian state apparatus. It also operates in Brussels among EU officials, where a directive can trigger a chain reaction, leading to a large number of officials in member states becoming involved in implementing that regulation.

This raises the question: Is it possible to combat the effects of Parkinson's Law? The answer is yes, it is possible. If work expands to fill the time allocated for its completion, then the solution is to reduce the time available for the work – in other words, layoffs are necessary.

Companies do this primarily during tough times. When organizations have grown during prosperous periods but then face financial challenges, they often have no choice but to cut costs and lay off employees to survive. After these layoffs, businesses often discover that despite the reduction in staff, they have not lost competitiveness and can continue to offer the same volume of products or services. This serves as evidence of Parkinson's Law: the same work can be done with significantly fewer people and therefore with fewer work hours.

The situation with the state apparatus is different. Unlike private companies, government institutions rarely face a "life or death" situation. Governments seldom go bankrupt. Unlike companies, where the market dictates income and owners can act quickly and decisively, governments can raise taxes or take on debt when revenues decrease, and political debates can delay decisions.

Laying off people is challenging because it directly affects the personal lives of colleagues and involves human emotions. Thus, it's somewhat natural that government institutions avoid layoffs as much as possible and find many reasons to argue that downsizing is impossible, fighting hard to prevent it.

However, layoffs in the public sector are indeed possible. A large-scale reduction in staff responsible for managing the state is not unprecedented. For instance, in 2022, U.K. Prime Minister Boris Johnson announced that 20 percent of civil servants would be laid off. Estonia could make a similar move by cutting the number of officials working in public administration. This would benefit the Estonian state in several ways:

• Significant savings would be generated for the state budget.
• The state apparatus would become more efficient, eliminating some unnecessary regulations, where the administrative burden of creating and enforcing them outweighs their value, both for the state and the private sector.
• Bureaucracy would decrease.
• A number of highly educated individuals, who are in demand, would enter the labor market. Some might even start their own businesses, contributing to the economy by paying taxes instead of redistributing tax revenue.

The initiative for such layoffs would likely not come from within the ministries themselves but would need to come from the highest political level, as it did in the U.K. There are already prerequisites for this, as the coalition agreement includes goals to reduce bureaucracy and regulations. Additionally, the government is actively seeking areas for cost savings.

As mentioned earlier, laying off people is emotionally difficult. However, one can be certain that if 20 percent of officials involved in managing the Estonian state were laid off, the country would benefit and nothing would get worse.

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