Consultants’ working on public policy does not threaten democratic accountability

By Martin Bortz

Friday August 2, 2019

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It is an interesting time for consultants to the Australian government. As Bernard Keane has pointed out, federal parliament’s Joint Committee of Public Accounts and Audit has recently sought to understand how much civil servants are drawing on consultants in getting the work of government done. This inquiry was very much concerned that the use of consultants was getting out of hand.

Underlying the inquiry — and current discourse about consultants — is their influence on public policy. This is a debate that dates back at least to the mid-1970s, when journalists Daniel Guttman and Barry Willner published ‘The Shadow Government’. In this widely-read book, the authors argue that the US government has given away its decisionmaking powers to private management consultants, experts, and think tanks.

The fear here is that consultants represent some kind of power behind the throne, secretly deciding what should be done with public money. In this view, consultants are a very real threat to democratic accountability. As someone who has both worked in and studied the industry for almost a decade, I would like to provide some reflections. Indeed, there are very real reasons why much of the current angst is misplaced, or, at least, needs a bit more nuance.

First, there is ample evidence to show that consultants are used a lot. However, as Canadian political scientist Denis Saint-Martin has pointed out, use and influence are not the same thing. Both my research and personal experience show quite clearly that bureaucrats have the ability to consider consultants’ advice and recommendations. They may accept it. They may not.

A good example comes from my PhD research into a New South Wales reform known as ‘Local Schools, Local Decisions’. What drew me to study this particular process were claims from the NSW teachers’ union that the reform was entirely designed by two consulting firms — the Boston Consulting Group and PricewaterhouseCoopers. These arguments were based on leaked reports from each of the two firms. In the view of the union, these reports were the basis for ‘Local Schools, Local Decisions’. However, the bureaucrats involved in creating the controversial reform pointed out to me that neither report was particularly useful to policymaking. As a result, the reports were largely ignored.

Moreover, policymaking is a collective activity. The final policy is the result of the efforts of many different people. Consultants’ advice is generally only one factor amongst many in the final decision. Again, this fact dilutes the notion that consultants have some kind of overarching influence on government. That is, consultants have to contend with the advice, expertise, and experience of many other actors, not least of which is that of policymakers themselves.

The third reason why some of the current angst is misplaced is what we might call ‘structural inequalities’ between consultants and policymakers. By this I mean that it is ultimately the bureaucrats who have the final say over a range of important aspects of the consulting engagement. This includes the kinds of questions that consultants must address; the contractual terms and conditions; as well as how important governance documents (i.e. terms of reference) are set up. These inequalities are often related to the ‘golden rule’ — whoever has the gold makes the rules.

I often encountered this in my role as a consultant. It was generally the client who decided how the project was governed, and the kinds of processes we needed to complete to successfully meet the brief. In addition, clients often had a say in the final wording of any reports. It was often very difficult (if not impossible) for us to negotiate our way out of some of these controls.

Finally, political decisionmakers have, throughout history, turned to a multiplicity of external advisors. The current use of consultants is part of this broader trend. Turning to a plurality of advisors is something that may be vital in dealing with the intractable and pressing challenges that are so endemic to modern governance.

Of course, none of this is to say that all is fine. Indeed, there is a lot of work to be done to ensure that the public service is getting real value-for-money from consultants. In addition, we should remain critical when we hear that much of the federal consulting work is going to the so-called ‘Big Four’. However, these issues alone are not enough to assert overarching consultant influence on policymaking, nor is it reason to suggest that the use of consultants — on its own — is eroding the fabric of democracy. Instead, we should take a far more nuanced picture of the consulting-to-government phenomenon to ask how consultants can aid good political decisionmaking.

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