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(Anthony Jenkins/The Globe and Mail)
(Anthony Jenkins/The Globe and Mail)


Running government like a business has been a dismal failure Add to ...

Thirty years ago, Anglo-American politicians set out to make the public sector look like the private sector. They decided to grab hold of the policy-making levers and push public servants to manage operations along the lines of their private-sector counterparts.

There’s plenty of evidence to suggest that politicians have gained the upper hand in shaping policies. Evidence-based policy-making has lost currency, as has the policy advisory role of senior public servants. But there’s also plenty of evidence to suggest that management reform measures have failed.

It’s not too much of an exaggeration to write that the policy advisory role of public servants in Anglo-American democracies has been turned on its head. Multiple sources of information and evidence-based policy advice no longer matter as they once did. Today, if policy-making in a post-positivism world is a matter of opinion, where 2 + 2 can equal 5, then Google searches, focus groups, public opinion surveys and a well-connected lobbyist can provide any policy answer that politicians wish to hear.

Public servants of yesteryear would emphasize proper data-gathering procedures and produce analyses with predictive power. Politicians grabbed the policy-making levers and decided to turn bureaucrats into better managers. Public servants were not about to admit that their management skills were lacking, so politicians looked to the private sector for inspiration. As a result, strategic plans were turned into business plans, citizens into customers and cabinet into a powerless board of directors, and attempts were made to tie pay to performance.

The notion that public administration could be made to look like private-sector management has been ill-conceived, misguided and costly to taxpayers. Management in the private sector has everything to do with the bottom line and market share. Administration in the public sector is a matter of opinion, debate and blame avoidance in a politically charged environment. It doesn’t much matter in the private sector if you get it wrong 40 per cent of the time so long as you turn a handsome profit and increase market share. It doesn’t much matter in the public sector if you get it right 99 per cent of the time if the 1 per cent you get wrong becomes a heated issue in Question Period and the media.

The genius of the private sector is its capacity to generate creative destruction. New sectors and firms attract resources from old ones. New technologies make existing skills and manufacturing processes obsolete. In short, Adam Smith’s invisible hand allocates and reallocates resources.

In the public sector, allocating resources remains a political decision. Creative destruction has yet to find a permanent home in government and, until it does, the notion that public-sector administration can be made to look like private-sector management will remain a non-starter.

Public servants now produce all manner of reports and navigate various accountability requirements to fabricate a bottom line. The result: Ottawa has an oversupply of officers of Parliament, accountability and oversight processes and performance and evaluation reports. Hundreds of reports are carted every year to Parliament, where they remain unread unless one of them has information to embarrass the government.

The business vocabulary in government has, if nothing more, empowered managers to grow government operations by stealth. The Chrétien-Martin review (1994-98) eliminated 45,000 positions, but by the time Stephen Harper launched his own review in 2011, the government had added more than 70,000 positions. Thousands of new oversight positions have been created in Ottawa to manage accountability processes. Thirty years ago, 70 per cent of federal public servants were located in the regions; today, the number is 57 per cent. Without putting too fine a point on it, public servants in the field deliver public services, while those in Ottawa provide policy advice and manage processes and oversight requirements.

The closest the public sector comes to creative destruction is when the prime minister takes a good whack at bureaucracy. The Mulroney review (1984) and the more substantial Chrétien-Martin (1994-98) and Harper reviews (2011-12) unveiled spending cuts like bolts of lightning. The machinery of government will do as it’s told, but it will also batten down the hatches and wait for the storm to pass. When prime ministers take their eyes off the ball, spenders again gain the upper hand. When a department is asked to assume new responsibility, it invariably asks for new resources, unwilling or unable to turn to creative destruction. It explains why the basic problem in government spending is not that it’s spending more on new things but that it spends massively on old things.

Traditional public administration values have been tossed out the window, including the commitment to a parsimonious culture. Public servants have lost their way, uncertain how they should assess management performance, how they should generate policy advice, and how they should speak truth to political power and even to their own institution. If anything, recent management reforms in government have made public servants feel worse about their institution than they need to.

The result is that the public service has been knocked off its traditional moorings. Simply saying that government managers should operate like their private-sector counterparts without changing how political and administrative institutions function remains a sure recipe for failure. It entails a steep rise in the overhead cost of government that can’t be attributed to programs and services to the public.

Donald J. Savoie is the author of the forthcoming book Whatever Happened to the Music Teacher? How Government Decides and Why.

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