Management
September 27, 2013

From past to future: Contrasting perspectives on public sector management

The publication of Donald Savoie’s latest book, Whatever Happened to the Music Teacher? How Government Decides and Why, advances his past work on how reforms to run government as a business have been a dismal failure. The book’s characterization of the civil service as largely dysfunctional appears to have struck a chord with reviewers and may be further evidence of the growing trust deficit with government.

Savoie argues persuasively that reforms designed to make the management of the public sector resemble the private sector have failed and he urges a return to the classic model of public administration. He acknowledges that the traditional model of Public Administration is not without problems, but considers the New Public Management (NPM) to be ill-suited to the public sector. Three key themes emerge:

• Western democracies over the past 30 years have introduced reforms to make public administration look like private sector management. Not only have private sector-inspired reforms failed, they have made matters worse. Savoie demonstrates how these reforms have caused a steep rise in the overhead cost of government and debunks the notion that public administration could be made to operate like the private sector.

• The traditional role of senior public servants advising governments on policy is no longer valued by politicians and evidence-based policy has been supplanted by opinion polling and focus groups.

• Canada’s political institutions have been reshaped to become less tolerant of administrative miscues and new parliamentary officers have conspired to undermine public sector management, while elected politicians look to the private sector for inspiration on how to fix bureaucracy.

Savoie is not hostile to the private sector. His observations on the genius of markets and particularly the role of creative destruction in promoting innovation are noteworthy. The profit motivation promotes risk taking and entrepreneurial behaviour. He attributes the success of private sector management to the invisible hand of the market and the dysfunction of the public sector to the absence of market forces. The public sector values adherence to rules and hierarchy. Savoie brilliantly observes that the basic problem in government spending is not that it’s spending more on new things, but that it spends massively on old things.

Savoie harkens back to a so-called halcyon age where mandarins somehow managed to assert their facts and could say “no” to ministers. He looks back to a time when there was a mutual respect between politicians and civil servants. Much of this appears rooted in a sentimental view of public administration and the Westminster model.

This viewpoint is widely held but the evidence is anecdotal and in my view not consistent with either popular culture or the historical record. Jonathan Lynn – creator of the Yes Minister series – found most of his comedic material in the diaries of Richard Crossman, who was a minister under Prime Minister Harold Wilson. Lynn was a keen observer of Whitehall and once referred to the Official Opposition as the opposition in exile whereas the civil service was the opposition in residence. For a Canadian perspective, we have Charles Ritchie’s diary of his years in the civil service which also reveals a deep strain between elected and appointed officials.

Savoie has special criticism for management practices that mimic or attempt to be a substitute for a bottom line. Rather than enhance program efficiency and effectiveness, they compound the problem by accreting more layers of red tape, which detract from accountability and paper over the real problems with program design and delivery.

While there is no doubt much truth in his criticisms, there is a real danger that we may be throwing the baby out with the bathwater. I don’t know any civil servants (even those who work in central agencies) who don’t express deep frustration with the creeping centralization and oversight of even the most non-material matters. The trust deficit is growing and each Auditor General report results in more fuel to fire the flames of discontent and loss of creditability.

In addressing what to do, Savoie posits a “render unto Caesar” solution. He acknowledges that prime ministers and their ministers should retain full authority to make policy, to allocate financial resources, to establish how policy should be delivered, to decide on the size and shape of the public service, but beyond that managers should be allowed to manage.

His prescription would be to build a statutory firewall between politicians and public servants – an administrative “no fly zone” where civil servants would be free from political interference and have the ability to resist improper demands from elected politicians. If this reform is not possible, then it is Savoie’s rather sobering assertion that citizens need to accept that their public service will forever be riddled with inefficiencies and far more costly to taxpayers than it need be.

Let’s suspend judgement for a moment and assume that the PMO experienced a road to Damascus conversion. How would the ideal of a politics-administration dichotomy be achieved? What would this independent civil service do differently?

Given Savoie’s damning critique of adopting private sector practices, presumably some variant of managed competition would be introduced to promote creative destruction and innovation – but how? Regretfully Professor Savoie does not provide much flesh on these bones so we are left to wonder how this new separation between “church and state” could work.

It is interesting to contrast Savoie’s gloomy outlook on the future of government with two American authors. First is Harvard’s Clayton Christensen, who is best known for his work on disruptive innovation. He and a team of Harvard researchers have recently written on breakthroughs in the public sector that are occurring in the absence of market drivers like the profit motive (Unleashing Breakthrough Innovation in Government).

His research documents the five conditions required to achieve breakthrough innovations in the public sector. Christensen acknowledges the barriers to innovation in the public sector but provides evidence and examples where public sector leaders are adopting new technologies and business models to create disruptive change.

A second viewpoint is the positive perspective offered by Cass Sunstein’s recent work where he argues passionately that influencing behaviour is central to public policy and major advances in behavioural economics are making policy and regulation more effective (Simpler: The Future of Government). Sunstein explains how influencing behaviour is seldom achieved through rational thinking and refutes the conventional tools applied to create “carrots and sticks” to change individual behaviour. His book is a well researched and convincing account of how science can be applied to the policymaking process and the design of new programs to achieve breakthroughs in policy effectiveness.

In summary, while we can all join Savoie in condemning the excesses of reform, his recommendation to return to the past appears misplaced. Rather than looking back, I prefer the outlook of Christensen and Sunstein who see challenges for government but remain hopeful for the future. They both acknowledge the differences between the private and public sector, but believe that neither has a monopoly or immunity to effective management practices. Just ask any citizen in receipt of a public service: They may not know what good management is, but they know good service when they receive it.

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OTTAWA, July 31 – CPA Canada, (Chartered Professional Accountants of Canada) announced their Public Sector Conference ,...