Advice to an incoming government from Dominic Cummings

Or, at least, some very sharp observations on how the system works. It won't be much different in New Zealand. 

Here's Cummings on Dwarkesh Patel's podcast, and some snippets from the transcript. Superb throughout. If an incoming National government wanted to know what they're getting into, listening to this would be a decent start. 

Dominic Cummings 00:04:08

A fundamental problem with how the British state works is this question of prioritization and the Prime Minister’s time. So you have all of these normal parts of the system that essentially can’t really do anything quickly at all, even in a crisis. So the Prime Minister’s time and the Prime Minister’s prioritization is the most important asset. But also it’s something which is constantly pulled hither and thither by all of this craziness.

One of the things that obviously we wanted to do was fundamentally reorient Number 10, away from what it’s been since Thatcher, which is a kind of press entertainment service. Where the whole building is just built to respond to what the media says and instead say, “What do we actually think is important?” And what is the management system you’re going to build that actually can maintain focus on those things whilst the inevitable chaos goes on?

 ...

Again, one of the funny conversations I had with Boris was, you know, we should say to the ministers that here’s your actual priorities as defined by us. Whether or not you get promoted and whether or not your career goes well is going to be defined by how well your department actually fulfills these goals. We don’t care about all of your interviews. We don’t care if you are on TV or never on TV. That’s not how we’re going to judge. Because they’ve all grown up in a culture where they think whether or not they’re going to be promoted really depends on: Are they seen as a good media performer? Or do they botch things on the media? Well, that’s just a fundamentally bad criteria, not least because their definitions of what’s good on the media are themselves terrible. By approaching government like that, you’re incentivizing them to think that their goal is making friends with the media. So then they get good interviews. That also incentivizes them to leak everything. So again, the culture and the incentives are self reinforcing in a very negative way.

...

I’ll tell you a story about it that kind of summarizes it. At the peak of COVID craziness in March 2020, on the day itself that the PM tested positive for CoVID, a bunch of people come into Number 10 sit around the table and we have a meeting and it’s about supplies of PPE to the NHS.

They say, “None of this ppe that we’ve ordered is going to be here until the summer.”

“But the peak demand is over the next three to four weeks.”

“Sorry, Dominic, but it’s not going to be here.”

“Why not?”

“Well, because that’s how long it takes to ship from China.”

“Why are you shipping from China?”

“Well, because that’s what we always do. We ship it from China.”

But A, we need it now and B, all of the airlines are grounded. No one’s flying anything.

“So call up the airlines, tell them that we’re taking their planes, we’re flying all the planes to China, we’re picking up all our shit, we’re bringing it back here. Do that now. Do that today. Send the planes today.”

We did that. But only the Prime Minister could actually cut through all the bureaucracy and say, Ignore these EU rules on Blah. Ignore treasury guidance on Blah. Ignore this. Ignore that. “I am personally saying do this and I will accept full legal responsibility for everything.”

You multiply that kind of problem by hundreds and thousands of problems, you get a sense of partly why COVID was so crazy. This is normal government. But in a crisis, when no part of the system can actually move fast, all of these bottlenecks end up very dramatically escalating to the PM’s office. And if you read Jared Kushner’s book, Memoir about the White House, there are very, very similar tales there. That a lot of things that obviously should have been solved elsewhere couldn’t be solved at any other part of the system. They all end up cascading upwards in these centralized bureaucracies, because ultimately only the president or only the Prime Minister can give certain kinds of orders.

...

And in fact, In 2020, for example, when we did some things very differently, it was extremely disruptive and extremely unwelcome to the large part of the system. Hence why a lot of what we did was closed down.

Did they say, “Okay, the vaccine task force and operation warp speed and the state have been great successes. We should massively reinforce them. We should build the next generation of vaccines. We should spread the lessons of how the task force operated.”?

No, they basically closed the task force. Sewage monitoring closed. Rapid testing, basically closed and forgot to order enough tests the following year.

So if you look back at 2020, most of the people who were most wrong were given awards and honors by the system and promoted to new jobs. The people who were most obviously repeatedly right have almost all left.

What incentive is there for people to speak out about how these things work? No one expects anything to change. Even after something as big as COVID, when you see what the reaction is, everyone can now see the truth. You can have a once century pandemic. It can kill tens of thousands of people unnecessarily. It can be a complete carnage for the economy, and everyone will just basically go back to normal. MPs will ignore it and nothing much will change.

So if you’re a standard official inside the system, all the signals to you are very clear. In fact, in 2021, it was even more powerful than that. There were a whole load of legal actions brought to say that the real problem with 2020 was that we went too fast and we did things too quickly. People actually brought legal actions against the vaccine task force. They brought legal actions against rapid testing. They brought legal actions against all sorts of activities.

The system didn’t say “This is completely insane. Actually, the bureaucracy and the sloth killed thousands of voters.” It said “Yes, we’re going to investigate all of this.” Every signal propagated through the system was essentially back to normal. You will be promoted for being the most insane process, and you will be demoted and blacklisted if you say this process is insane and try to do better.

...

Dominic Cummings 00:24:16

Manhattan Project is much in the news with the Oppenheimer movie. If you look at the very last bit of General Grove’s book on Manhattan Project, he talks about what are the most fundamental principles about why it succeeded? And one of those principles is relevant to government. Actually, they’re all relevant to government.

One of the principles is that the quality of the people is fundamental. Another one is that responsibility and authority are always delegated together. The entire British constitutional system and management structure is based on the fundamentally opposite principle. Responsibility and authority are not delegated together. So if you’re asking about something like the vaccine task force, in the normal system, nobody really is in charge of anything. Lots of people can criticize, lots of people can complain, lots of people can argue about things. Lots of people can veto. Almost nobody ever has the authority just to build something or just to do something.

Why did we create the vaccine task force the way we did? Well, because we were trying to actually embody principles like responsibility and authority pulled together. We brought one person in, we said “You are responsible.” But once we’d gone, then what happens to that entity? It’s sitting there amid Whitehall while all the normal parts of Whitehall just start going back to being normal. So what happens? They say, well, they are exempt from all of these rules on HR that the Cabinet Office imposes on every part of Government. This should change because it’s going back to normal. They have to do the following things properly. We gave them special dispensations because of the extraordinary circumstances of summer 2020, but these now come to an end.

So those sorts of things come in. The treasury says, “The spending rules and how the people in the vaccine task force make decisions, that was an emergency thing. Now the normal rules apply again.” So before you know it, all the different parts of the system have basically said, the thing that you created outside of the normal system now has to obey all of the things that it was specifically created to avoid.

Now, the system will just do that automatically unless there is a very powerful counterforce. Fundamentally, again, only the PM can say,”No, we’re not having that. In fact, I want to strengthen the vaccine task force. We want to move on to the next generation of vaccines. etc.” If they don’t do that, and if the people in charge of it can’t call on the PM’s authority, the system will just devour the new entity very, very quickly and force it to conform with all of the normal system.

I’ll give you another example of this on rapid testing. One of the things that we did to get the rapid testing to work was we got a guy who formerly was commanding officer of the SAS, British Special Forces, and this guy got a bunch of his friends from Special Forces also to work on rapid testing. When we first got this pushing from Number 10, I got the critical people from procurement, commercial HR, etc, into the Cabinet room with the Cabinet Secretary, the single most important official in the whole country, and the two of us said, “The PM wants rapid testing dealt with as if this is a wartime crisis.” We’re going to have a second wave. There’s going to be thousands more people getting CoViD, there’s NHS. People are dying, etc. We can’t have any of the normal civil service HR. We can’t have any of the normal civil service bullshit on procurement. Exactly the same as with the vaccine task force. Everyone sits around the cabinet table, they all nod their heads.

A week later, I call this guy, a former SAS boss and say, “So, how’s it going? Are you getting who you want and is everything working great?”

He says, “No, it’s all the same shit show.”

So I have to get all the people back in the same room with the country’s most senior official and say, who the fuck have we got to fire around here to make clear that these people doing testing don’t have to do all of your bullshit HR?

That’s how extreme things have to be. It was only by doing that a second time and making clear that I would get the PM to actually just start firing senior people in the Cabinet office. It’s only then that the system will kind of part and go, “Okay, this element is allowed to.” But you imagine as soon as that countervailing force is removed, all the normal sea floods back.

...

Dominic Cummings 00:31:25

Sorry to interrupt, but imagine as well what the promotion system is like and who ends up getting to the top of these systems. A lot of people say, “Oh, you’re so negative about the civil service. You’re all saying that everyone there is rubbish, and it’s not fair.” That’s not my view. In fact, if you look at the civil service, you actually see a lot of very able people, but most of them are young. What happens is the young, excellent people get weeded out by self-selection, largely because they go in idealistic, they’re there for a few years, but then they look at what the process is to be promoted, and they look at their bosses, and the best of them look at it and go, “I don’t want to be like that.” I don’t want to have to make those decisions. I don’t want to have to make those compromises. I don’t want the job like that, where it’s almost all bullshit. We can’t actually build anything.

The most entrepreneurial, the kind of people who actually want to get on and do stuff now, leave and the most HR compliant, disastrous people to be in charge of supposedly fast moving agencies are the ones who are promoted to take over. And then that culture itself becomes highly self reinforcing. Once you get a whole cadre of leadership at the top that’s like that, it’s extremely difficult to break out of.

I'll stop clipping there or I'll wind up just having the whole darned thing. 

Morning roundup

The morning's worthies:

• NZ alcohol policy basically gives a veto over licensing to the Medical Officer of Health and to the Police. Sucks when you get a prohibitionist in charge of either. And why are so many NZ prohibitionists named Palmer anyway?
• Josh Gans on copyright status of AI-created works. 
• Grimes set up an AI trained on her own work. It tweets. Grimes notes, "The degree to which this bot has mastered my internal monologue is terrifying to me"
• Michael Reddell on RBNZ forecasting. I think it's a damned shame we didn't get NGDP markets for NZ; Simon Bridges murdering iPredict may have cost us considerably. Thanks again Simon. 
• A reminder that it was Don Lavoie who coined the term "knowledge problem" for Hayek's fundamental insight, not Hayek himself. Even if you think you're familiar with the term, please read this. 
• Immigration NZ continues to be an absolute mess. It's only partially the bureaucracy's fault. They'll have had whipsawing policy directives from the Ministers. First it's clamp down and don't process visas because Labour hates immigrants. Then the inevitable bad consequences from blocking migration, so they get told to stick every employer into the high-trust accredited employer visa programme to speed up processing - which pushes actually trustworthy employers into the same queue with a bunch that really really aren't. And the inevitable consequence of that. Absolute mess. Herald, Stuff. The Stuff piece is particularly good. 
• RBNZ figures that migration might now be reducing inflationary pressure rather than adding to it - easing labour supply bottlenecks.
• In today's edition of "China is actually a more stable and reliable trade partner than the US," Trump promises 10% across-the-board tariffs if elected. Shouldn't US foreign policy aim at encouraging deeper trade links with the US and reduced reliance on China?
• Action on Smoking and Health is getting fed up with BS coming from Health Coalition Aotearoa.

Mclaughlan on the administrative state

There's a lot going wrong. Danyl Mclauchlan documents a few of the problems in an essay for The Spinoff, building a case that they're all symptoms of government administration being run for the benefit of government administrators. 

• Giant shortage of nurses; nobody bothers to put nursing on the priority list for automatic residence.
• Health system falling apart for want of doctors and nurses; $11 billion project to reform the health bureaucracy;
• $200 million so far on reforming the polytechs, the Chief Exec of the merged entity disappeared before resigning, and the whole thing is set to fall apart;
• $120 million for business cases for Let's Get Wellington Moving, while Wellington's infrastructure is collapsing;
• The fire service got centralised at considerable expense and is now falling apart;
• ...but wait, there's more! Danyl writes:

In the past few months the government has created a new anti-terror research centre, committed $300 million to replace the school decile rating system with an equity number, created a a new ministry for disabled people, a new national health provider, a new health authority for Māori, a new ambassadorship for Pacific gender equality, a new supermarket watchdog. It’s hard at work creating a new mega-sized public media entity – estimated cost $350 million – and establishing four new regional wastewater entities at an estimated cost of $296 million (the total three waters reform is priced at about $2 billion). It has purchased Kiwibank for $2.1 billion. 

Some or all of these might turn out to be worthy enterprises but there’s a huge assumption in this government and on the left more broadly that they can only be Good Things – that questioning the rapid expansion of the administrative state can only be right-wing hate speech, part of a covert neoliberal plot to gut health, education, welfare. 

Aren’t we seeing an erosion in state capacity alongside all this centralisation and expansion? Aren’t outcomes in health, education and welfare trending down rather than up? What’s going on? You can’t have effective public services without bureaucracies, but it’s not clear that the torrents of money flowing into them are delivering more value to the public or to the marginalised communities some of them are named after. It’s almost as if the primary role of the administrative state is shifting from serving the people to the redistribution of wealth to the staffers, lawyers, PR companies, managers and consultancy firms that work in them, or for them. A billion dollars a year in public sector consultancy is an awful lot of money when you’re running out of teachers and nurses because you don’t pay them enough, and the fire trucks are breaking down.

The whole essay deserves reading. 

I'm not sure whether the underlying thesis is right. A permanent managerial class may have taken over, but there's no reason it has to be as stupid as New Zealand's has been. 

The people in the civil service aren't that different from the ones who were there under the last government. Many were appointed under the last government. Peter Hughes has spanned multiple governments. 

Danyl again:

Lasch mourns the decline of the mid-20th century socially democratic left; the working class movement that built the modern welfare state. And he notes that the PMC often imitates their rhetoric but primarily employs the state as a means to appropriate the public’s wealth for themselves while defecting from its core institutions. He notes: “They send their children to private schools, insure themselves against medical emergencies… In effect, they have removed themselves from the common life. Their only relation to productive labour is that of consumers. They have no experience of making anything substantial or enduring. They live in a world of abstractions and images, a simulated world that consists of computerised models of reality.”

And this disconnection from the physical world and their fellow citizens means their politics is increasingly therapeutic rather than material; it’s the politics of personal self-esteem, emotional wellbeing, self-expression, self validation, relentless positivity. Jacinda Ardern gave a nice demonstration of this in a recent interview on TVNZ’s Q+A with Jack Tame. When asked about her government’s failure to deliver across multiple policy areas and what she’d learned from these mistakes, she replied: “You know what, I would not ever change the fact that we have always throughout been highly aspirational. We have always focused on how we can make New Zealand better…  In setting out a vision for what that should look like, you will still hear me talk about New Zealand as a place that should be free of child poverty. Absolutely, because anything less in my mind… anything less demonstrates that we don’t believe that things can and need to improve.”

Danyl's dead right that vision and aspiration have been front and centre, with delivery left as afterthought at best. But I don't think that's entirely down to the bureaucrats. One of the first things that Labour did, on taking office, was abolish the targets that the previous government had set on the public service. They abolished accountability while setting aspiration as end in itself. 

Maybe it's the public sector's fault for being too ready to let Ministers get high on their own supply, but even in cases where the Ministries have been courageous in providing advice Ministers didn't want to hear, it didn't make any damned difference. MBIE warned about the problems in Fair Pay Agreements; government wanted to push ahead anyway. 

I tend to think this stuff starts at the top.

If the Minister of Finance demands evidence on value-for-money in adjudicating between different budget bids, because there will always be more bids than there's space to accommodate, that drives demand for rigour in analysis. If the Government wants everything put through a soft-focus wellbeing lens instead, then that razor gets dulled. And if you combine it with a ludicrously soft budget constraint where government borrows $50 billion, nominally for Covid, and then spends it on any darned thing that passes a comms test, you'll get what we've had. 

And it worked for the government for a while. But the Gods of the Copybook Headings eventually return. 

It all looks pretty bleak. Europe's heading for disaster if the energy futures market is anything to go by. Covid shocks were bad but what happens when European factories supplying critical parts into NZ supply chains can't afford to run? There's terrible mess ahead, we can't afford for policy to continue to be this persistently stupid, and there's no reason to hope that policy will stop being this persistently stupid.

What's perhaps even more depressing is everywhere else looks even worse.

How much ruin is there in a country?

Burton on the bureaus

This is the sort of thing that should wind up on the syllabus in politics and public administration classes. Tony Burton on how government departments really work:

In the days after the Nazis surrendered in 1945 the allies had a lot to do, so there was a curious period when the senior bureaucrats of the old regime, holed up in a nice castle in north Germany, were left alone. So what did those bureaucrats do as their country lay in smouldering, starved ruins?

“… in a former school room still smelling of chalk, we solemnly met on the dot of ten every morning, sat down on brightly coloured straight chairs around a brightly painted square table and discussed the non-existent plans of a non-existent country.” (Albert Speer quoted in Sereny 1995)

One suspects that after the border control debacle there are New Zealand ministers wondering if something similar is happening in the streets around the Beehive. The government’s strategy had two parts. The hard part was largely achieved by the “team of five million” agreeing to stay at home at the risk of large scale unemployment. The second part, the seemingly simpler task for an island country four thousand kilometres of ocean away from its nearest neighbour, closing the borders. The first part of the plan has succeeded beyond expectations. The second part, not so much.

When I was part of the government machine I was struck by how little understanding even those receiving the eye-watering fees to teach “Masters in Public Policy” have of the way government operates. (If you want an example, look up “policy cycle” in a textbook on government where you will find a hamster wheel schematic and text describing how, apparently, government is run by hamster bureaucrats scuttling round it.)

...

To get from the Minister to a person providing a service, say a person at the border, takes anything between five to ten of these layers. That is, five to ten people, each with a range of jobs, one of which is to “cover off” a policy like the border controls to keep out Covid. Apparently this was not bureaucratic enough, so since last week’s Public Service Act came into force, the State Services Commissioner has been added as an additional layer between Ministers and the departments that deliver services.

To understand what happened at the border it helps to look at the writings of a neo-liberal. The term “neo-liberal” is now used so promiscuously it has become the left’s contribution to a dumb and dumber act with the right’s “political correct”. But at one point it described a mid-twentieth century approach to government whose proponents included a bureaucrat turned academic called Frederick Hayek. Contrary to myth he would have been a sceptic about the 1980s reforms in New Zealand, not the reduction in the size of government but any “rational choice“ thinking behind the new model for departments, and his views on the power of convention would probably have led him to predict the recent reversion back to a more British style civil service.

Unlike Keynes, and many others who theorise on the role of government, Hayek spent his time in the civil service working as an administrative cog in a typical silo of government, in his case the department that managed Austria’s government debt. This gave him an insight into how little relevant information is available for most administrative purposes and he applied this to his thinking on both government and private sectors. The key problem government organisations face, that private organisations do not, is lack of incentives to find and use the information they need to do their job properly.

Less abstractly, imagine you work on the front line of the New Zealand Customs Service and want to play your part in keeping New Zealand free of Covid-19. If you spotted gaps in the system, you would be required to “work through the line”, so your manager could pass the information up the managerial hierarchy.

Those managers are expected to spend 40% of their time “managing up”, that is making those above them in the hierarchy happy. So, at each point that information on border deficiencies rises, it competes with agency and departmental priorities of far greater importance to people in that line, like team budgets, annual performance reviews and “strategic visions”. At the end what is left are abstracted summaries designed to make senior bureaucrats feel powerful and ministers feel in control.

Worse, it is rare for departments to spontaneously present bad news, particularly to ministers. No-one wants to be known for telling the government that its policies are not working. At its most extreme, a former Chief Executive of MSD commanded “no problems without solutions” so only problems that had already been solved could be presented to senior managers. More commonly, there are long delays as senior officials angst over how to present the information in a way that does not show the department in a bad light. Even if good information somehow gets to the upper reaches of the hierarchy, it will not necessarily reach those who need it in a coherent or timely form.

This works the other way too. Ministers very rarely talk to people at the front line. Their decisions are largely informed by meetings with people at the upper end of the hierarchy who are equally ignorant of what is happening where services are delivered. Decisions are and are then passed down that line of five to ten people. Anyone who has played Chinese whispers will know some of the problems with that. Unlike the children’s game, the whispers will be carefully “messaging” to promote executives, their teams and their department.

The miracle is that this ever works. We observed one reason over the last couple of weeks: if those administering the system go too far from the real world, the real world tends to tap them on the shoulder and remind them of its existence.

Political risk aversion

Few bureaucrats get fired for being too cautious about health and safety. Maybe this latest Housing New Zealand debacle will change that.

Recall our base theory here, going back to the kind of stuff Alex Tabarrok talks about. Consider a government agency trying to mitigate some kind of risk. It can screw up by being too cautious, or by not being cautious enough. We should all want it to minimise the expected cost of error, so to weigh the costs of getting things wrong in either direction. But the political incentives go the other way. If you err on the side of being too cautious, putting more weight on health and safety risks, for example, you'll typically impose costs across the whole sector that aren't all that visible - everybody pays $10k more than they should on a house repair because of really stupid scaffolding rules, for example. But nobody gets fired. If the bureau errs the other way, and somebody dies for lack of caution, then John Campbell's all over it and the Minister starts busting heads down the Ministry because the Minister's incurred political costs.

It's made worse by health and safety liabilities on directors, where they can take on pretty substantial cost if they're not sufficiently risk-averse.

And then we wind up in the meth-mess, where Housing New Zealand imposed stupidly risk-averse standards for determining meth contamination and so the whole sector wound up bearing a lot of cost - and a pile of people got needlessly kicked out of their houses.

Blaise Drinkwater's summary seems best here.

1) Twyford did what previous Ministers should have done: Gluckman was the only circuit-breaker in sight
2) Other than that, I'm not sure what Ministers *could* appropriately have done 3) HNZ procedure for houses with low meth residue is deep in the territory of the "operational"

— BK Drinkwater (@BKDrinkwater) June 1, 2018

4) That is, Ministers don't usually get to tell the Departments, Crown Agents, etc how to interpret statute, regulation, & guidelines
5) They *can,* but it's regarded as Ministers exercising authority: there is no presumption that they're informed or competent to make such calls

— BK Drinkwater (@BKDrinkwater) June 1, 2018

6) It's rare, & it's meant to be politically costly
7) The idea is that Ministers, being the government, can change state sector behavior by *changing the law*
8) Problem: govt lacks access to that lever in the case of so-called "tertiary legislation" like guidelines

— BK Drinkwater (@BKDrinkwater) June 1, 2018

9) Problem: what if both executive (eg HNZ) and (quasi-)judiciary (eg TT) get the *interpretation* of tertiary legislation wrong?
10) Let me be clear: English or Bennett, years ago, should have done what Twyford did. But other than that, I don't know what they could have done.

— BK Drinkwater (@BKDrinkwater) June 1, 2018

11) So I think people on high horses demanding that they should have done unspecified "something" aren't really bring reasonable.

— BK Drinkwater (@BKDrinkwater) June 1, 2018

12) Either MoH and Standards NZ failed to make clear their guidelines to Housing NZ or the Tenancy Tribunal, or the latter two were either willfully or idiotically dense. That's what left government, and tenants, wide open to dishonest industry.

— BK Drinkwater (@BKDrinkwater) June 1, 2018

I think we need to figure out ways of making the public sector, and regulation more generally, bring the real costs and political costs of the two kinds of error into line.

This episode might help in that - there are, in this case, political consequences for having been too risk averse around health and safety. The Ministries behave as though they expect massive penalties from the Minister for not being sufficiently risk averse, but no particular consequence for being too risk averse. Those expectations have to change or we'll keep getting excessively risk-averse Ministerial interpretations.

Reader mailbag: bureaucratic constraints edition

From the bowels of another Ministry comes this response to my wondering how a truth-seeking Minister might extract non-pandering advice from the Ministry:

• Ministers typically work 14 hour plus a day, 6 to 7 days a week. My impression is that most are genuine in their beliefs but that is not the same as looking for the truth...

• A typical meeting with a civil servant will be based on a paper or detailed presentation of the evidence, plus 5 to 10 minutes of discussion on a topic.

• Minister spend most of their time talking to people with a special interest who will not hesitate to lie to them (it is difficult for those outside the system to conceive just how endemic various degrees of lying are to every conversation a politician has), so even the minister you describe will have to spend a lot of their time dealing with that context.

• Further, every interaction is basically a bargaining situation. In bargaining the truth is usually not the most important constraint.

When you put this all together, what is miraculous is that there are any ministers in the scenario you describe! 

Given that, my correspondent suggests that, most of the time, putting effort into solid evidence is either pointless or potentially counterproductive as the Ministry may just be seen as another special interest group.

I think it's important regardless. Sure, a Minister might not be listening. But others might appreciate seeing an honest, non-pandering RIS.

And hoisted from the comments on that prior post, because Disqus isn't synching with the mobile version of the site:

"How can you credibly signal to your incredibly risk averse Ministry that you actually want frank advice?" Easy: this is a repeated game so you can go about it one play at a time. From day 1 I demand that my officials provide two competing sets of advice on every single matter. When they meet with me I listen respectfully to both presentations and ask questions that demonstrate that I'm engaging with the issues raised in both. After enough iterations have occurred to build some trust, I start asking people at the meeting directly what they think. To maintain the social capital I've earned, I'll have to be seen occasionally accepting, or at least seriously considering, an option that was known not to be my original preference. It's time consuming and takes effect, yes, but so does any job done properly. 

Hard to get good advice

A friend in one of the Ministries sends me this, after reading the post on Treasury's interesting problem definition in the RIS for the ban on foreign house buyers:

A lot of the messaging at [REDACTED MINISTRY] at the time it started appearing more likely that there’d be a change of government, was about how giving Helen’s government in 1999 frank advice on the wisdom of its election promises undermined the relationship and caused distrust. So it was made fairly clear upfront that ministries were not going to be telling ministers that their policies didn’t make sense.

Thinking back, that was reported to me at a meeting as having been discussed at a senior officials meeting - interagency senior officials - at which Treasury would've been represented.

Weight it as you will.

I wish Ministries were less risk averse on this stuff and more willing to consider that their Ministers just might want to get their officials' actual views on stuff rather than pandering. And that Ministries also have a responsibility to Parliament and voters in providing accurate assessments of the likely effects of policies.

I'm sure I've seen a paper on this, likely from Ami Glazer, where an agent who's revised her views on something has incentive to preference falsify if the principal will interpret the flip as the agent's having become disloyal.

Adapting to the current scenario: if the Minister will interpret the Ministry's "Your policy will not achieve its intended effect and/or will have these bad side-effects and/or is way less effective than this other policy" advice as the Ministry not sharing the Minister's values, then the Ministry will want to dissemble when there isn't as much at stake so it won't be written off as disloyal or as providers of 'ideological burps'.

It's a fun problem though. Imagine that you're an incoming Minister, and that your Ministry expects to be punished for offering frank advice, and that you actually want frank advice.

Your Ministry is second-guessing you and trying to avoid saying anything that would make them appear disloyal on margins they think are less important, so that they might be believed if a sufficiently important issue comes up and they have to give advice contrary to what the Minister would like to believe. They, and every other Ministry, have had successions of Ministers that have claimed to want honest advice, but who've burned them for providing it. Inevitably, somebody OIAs the advice, the Minister takes flack for it in the press and in the House, and the Minister's gotten mad at the Ministry for the advice or for writing it down.

How can you credibly signal to your incredibly risk averse Ministry that you actually want frank advice? Even Stalin sometimes wanted the real deal rather than pandering.*

Can a Minister require the Chief Exec to make bets on policy outcomes?



* I really like Xavier's post on this. An excerpt:

Yet Pollock makes a good case that Stalin really wanted some genuine discussion and criticism as a way of furthering the progress of science, at least in some fields (though he underplays the connection of Stalin’s views on linguistics with his interest in strengthening national identities and making use of patriotic fervor), and goes on to make the more (speculative) claim that Stalin’s repeated assurances that science only progresses via discussion, and that it is not necessarily class-based, account at least in part for “science’s rising prestige in the post-Stalin decades”. Stalin really needed (some) science to work well in the coming competition of the Cold War, and dimly understood that this could not happen if dogmatism reigned everywhere. Yet as long as he was alive, no such discussion could take place. His influence was like that of an enormous gravitational body; once he intervened (or was even suspected of intervening), the space of discussion became completely warped.

Dogmatism was safety: one needed to know where to stand in order to get on with life. Wherever the orthodoxy was unclear, best not to tread.

Solvable problems

The world has plenty of hard unsolveable problems. It's irritating when easy to solve problems fail to be solved, although they too may point to a broader difficult problem.

Item the first: New Zealand's great walks are, well, great, and very popular with tourists. But they're losing millions of dollars per year, meaning that taxpayers are shelling out to provide tourists with great walks at discount prices. And nobody wants to increase charges for locals. The solution seems obvious: charge tourists more than you charge locals, unless something really weird is going on and we're already on the inelastic part of the tourists' demand curve.

Item the second: Christchurch Council wants to encourage water-saving. They have meters on the properties already, but they're not charging residential users based on consumption. If that's because the efficiency gains from metering and charging are small relative to the costs of reading the meters, fair enough. But if it's because people are worried about poor households not being able to afford water, that's a totally solved problem. It bugs me when people jump to that one. Totally solved, and obviously solveable were it not already totally solved. Just think.

Finally, Andrew Little doesn't want to raise the age of eligibility for NZ Superannuation because some manual labourers may not be physically able to work past the age of 65. But wouldn't the obvious solution to that problem be to introduce a new disability benefit for those over the age of 65, unable to work, and not yet eligible for NZ Super if the age went up? That isn't necessarily my preferred solution to NZ Super overall, but it seems a blindingly obvious solution to the stated objection to raising the age of eligibility.

On all of these, it seems like folks hit a "but here's a problem" issue and stop thinking when they should instead be wondering about how to solve the imagined roadblock. Inertia is powerful, and encountering a plausible-sounding reason for doing nothing lets people not fix problems.*

Inertia's a bigger and harder problem.


* If you've dealt with the public sector, how often have you heard "Oh, but privacy considerations..."

Public service efficiency: Going postal

It takes less time for a badly addressed letter to get back to the US from New Zealand than it does to get back there from Canada. At least that's what Chong, La Porta, Lopez-de-Silanes and Shleifer find in a test of public sector efficiency [working paper version]

Here's a snip from Table 2, showing the proportion of test letters making it back to sender, the proportion doing so within 90 days, and the average number of days to get the letter back.

I note that New Zealand's postal service faces private sector competition, unlike some other countries' postal services.

NZ Post advertises that its cheapest international option takes 6-10 working days to ship to the US. The USPS gives no delivery estimates on its first class international mail offerings, but its Priority Mail option, more expensive, is 6-10 working days.

I'd expect that the letter to New Zealand spent a long time on a slow boat getting here.

More broadly, they find that measures of bureaucratic quality, red tape, education, ease of doing business, contract enforcement, infrastructure quality, and political accountability all affect mail efficiency in the expected directions.

 

HT: Bryce Wilkinson

A welcome turn

A NZ Herald editorial last week rightly criticized the country's growing nanny state. 

In themselves, the Government's proposed amendments to the Fencing of Swimming Pools Act contain a reasonable degree of common sense. What can be wrong with changes that aim to reduce the risk of children drowning? And if the new law would mean even portable or inflatable pools need to be fenced off, isn't it right to encourage parents to adopt best practice and empty them after each use?

The only problem is that the proposal is a further sign of a Government regulatory itch that is now of eczematous proportion. It is an odd situation for an administration that places much importance on personal freedom, prides itself on reducing rules and regulations, and criticised its predecessor for a nanny-state approach.

The extent of that regulatory itch was outlined in the Weekend Herald. Examples include the ever-decreasing speeding tolerance threshold, the reining in of bars' happy-hour promotions, a ban on using cellphones while driving, prohibiting the sale of wine in dairies, and making beneficiaries immunise their children. Each was appropriate in its own way but each would also have engendered claims of social engineering if it had been the work of the previous Government.

Indeed, with both cellphones and immunisation, the Key Government has ventured where Labour declined to go.

The proposed swimming pool regulations, I suppose, crossed a line for the Herald's editors. A year ago, the Herald on Sunday described itself as "campaigning" for lower drink-driving limits and regularly runs features on the horrors of alcohol.

They're right now though.

The Herald's Isaac Davidson enumerates National's nanny moves:

Alcohol
• Can't buy beer and wine from dairies and convenience stores.
• Bars no longer allowed to advertise discounts over 25%.
• Can't buy beer from bottle stores after 11pm and in bars after 4am.
• Minors need express consent from parents to drink.

Smoking
• Plain packets for cigarettes (proposed).

Driving
• Speed tolerance cut to 4km/h.
• Breath-alcohol limit lowered.
• Mobile phone use banned in cars.

Recreation
• Licence to hunt specific types of game animals.
• Snapper catch reduced (proposed).
• Fines for not fencing permanent paddling pools (proposed).

Health and welfare
• Raising age for child booster seats from 5 to 7.
• Harder to get cold medicine with pseudoephedrine.
• Beneficiaries' non-school-age kids must be enrolled in early childhood education and doctor's clinic.
• 16- and 17-year-old beneficiaries have an adult assigned to them who pays their bills and handles their money.

I support a few of these. Requiring that beneficiaries have their kids enrolled with a GP (free in NZ) seems the kind of regulation that has the potential to do much good while imposing little cost. And I wouldn't rule out that having youth beneficiaries get a bit more guidance on managing their money might help. Snapper quotas and hunting licences can be an important part of overall conservation management; I expect that the regs here are to ensure a sustainable harvest rather than to run people's lives for them.

But the others do grate.

Maybe I'm a terrible driver, but I have a hard time keeping within a 5 km/h plus-or-minus range around the speed limit. I'm there 95% of the time, but New Zealand is a very curvy and hilly driving environment. It's easy to miss that you've started onto a decline until you notice that the speedo's hit 110. And that's fine, when you're allowed a 10 kph tolerance. But at a 4kph tolerance, I'll have to double the frequency of speedo checks to make sure that I'm not over the limit. Or, get a radar detector for highway travel. In the former case, I'll be driving less safely because I'll be diverting attention from the road. In the latter case, well, I might be tempted to go a bit faster than I otherwise would have. I also expect that others might start targeting 95 kph to avoid going over 104 kph, which will also be rather annoying in places without adequate passing lanes.

I suppose that the best that can be said for the proposed pool regs is they'll encourage more people to come around to my way of thinking about government.

We live on Estuary Road in South Brighton. If you cross Estuary Road, you go through a park leading to the Estuary. The Council maintains paths leading right up to the water's edge. Before the earthquake, a dock went out into the water, with no particular railing to keep people from mistakenly going over the side; steps at the end led right into the Estuary. If you go East instead of West from my house, you cross Pine Street, then cross Marine Parade. Then you'll come to a wonderful set of sand dunes. The Council maintains an easy footpath to climb over them. On the other side is the Pacific Ocean, with nary a fence nor a lifeguard in sight. Gorgeous. Council did a lot to enhance the natural amenity value by easing access for everyone.

In my backyard, there's a swimming pool. My back yard is entirely fenced, so nobody can get to the pool without passing a barrier into my back yard. The pool area is fenced off from the rest of the back yard. When we purchased the house in 2005, we specifically requested that a Council zoning guy come in and assure us that the pool was completely compliant and that we'd have no issues in buying the house. He said it was all good.

In 2009, we had a half-dozen visits from a different Council pool compliance person. Each time, something different was wrong with the pool fencing. Each visit was followed by a threatening letter. Nothing had changed in the regs. Nothing had changed in the fencing. Different pool inspector, different result. Once we had demonstrated sufficient obeisances, she signed off on it. I suspect that some Council officers just get off on making people prove submissiveness and enjoy making people do stupid pointless things just for the sake of it. For now, it's best to know how to lose. Come the revolution....

Downtown awesome

Rebecca Macfie's must-read article on Christchurch redevelopment highlights some of the grassroots downtown awesome going on in Christchurch. Case in point: the Dance-O-Mat:

“The response was overwhelming,” says Reynolds. “They [supporters and volunteers] said ‘you have to keep doing it’.” Since then, Gap Filler has become a charitable trust, Winn has become the paid co-ordinator, and many more gaps have been filled. One of the most outrageously successful was the Manchester St Dance-O-Mat – an open-air dance floor and a coin-operated washing machine converted to provide 30 minutes of light and power to an iPod and speakers. Reynolds: “People said Christchurch people wouldn’t dance in public. Well, Christchurch showed us.”

On one freezing Friday night in late May I learnt ceroc, salsa and swing moves among dozens of strangers; suddenly, it didn’t matter that we were surrounded by demolition sites and that the central city was gone. Based on the number of $2 coins pushed into the slot over the project’s two-month life, Winn calculates the floor was danced on by 2000 people. Although the dance floor’s now been packed away for winter, she says the Christchurch City Council is keen to re-establish it permanently. “So we may gift it to the council.”

It’s hard to overstate just how powerful and invigorating this is: young, clever creatives with little money but a huge appetite for trial and error are doing urban design on the fly, and proving that small-scale, inventive spaces will draw people out and restore life to a wasteland. And, says Just (who is also a Gap Filler trustee), it’s radical on another level, too. “It’s turning private space into public space. So a 60-year-old becomes an urban activist by dancing on the Dance-O-Mat.”

We hit the Dance-O-Mat one Friday night, along with a colleague and her family. Two economists, two econ-spouses, and three kids, dancing to the Hayek-Keynes rap. Was excellent.

Macfie points to some of the problems in routing through the bureaucracy for the Smash Palace bar:

Eventually, he alighted on a bare section at the corner of Victoria St and Bealey Ave, and came up with the idea of parking an old bus on the site and converting it into a relocatable bar. There’d also be a caravan where his sister Rosie would run a cafe, and a couple of temporary buildings for toilets and kitchen. The wind and dust would be kept out by plastic sheeting attached to scaffolding around the perimeter of the site.

The city council’s planners were enthusiastic, as was business support agency Recover Canterbury. Lots of people lent moral and practical support. He started working on the site in October, with ambitions of having the new bar, called Smash Palace, trading by Christmas. Then began a protracted Kafkaesque battle with the Christchurch City Council’s consenting division. Because the bus was judged to be a building, it needed building consent. That meant concrete foundations had to be laid, and the body of the bus tied down.

The handrails had to turn down 90 degrees at the end, and the way they connected to the decking around the bus had to be drawn up by an architect. The wheelchair ramps had to be at a gradient of 1:12. A near-enough 1:10 was not good enough. Then it turned out the scaffolding was also classed as a building. Moore mounted futile protests before complying with the consent department’s demands to provide engineering certification – only to be told the council needed to farm out the approvals to a consultant in Auckland. At his cost.

... But Moore believes the whole process cost him an extra $50,000, and it drove him to his wits’ end. “Personally and mentally it broke me down. I got to the point where I was seethingly angry. I’d go to bed angry and dream hateful dreams towards the council and I’d wake up hateful.”

He found himself drinking and smoking too much, losing sleep and chewing his nails. Without more pragmatic interpretation of the rules for temporary outfits like his, quakehit businesses will be driven from the city, he says. “The Building Act is fine when it’s business as usual. In Christchurch at present it’s not business as usual.” The council’s building operations manager, Ethan Stetson, is unapologetic. Yes, he says, post-quake Christchurch needs creative entrepreneurs like Moore, who are “the life-blood of the city.” But building quality, fire protection and disabled access still matter.

Read the whole thing. If the son of the former Mayor can't get through the bureaucracy except at massive personal cost, what hope is there for others?

Meanwhile, Christchurch's new "Ministry of Awesome" is trying to encourage fun new projects for downtown. Lots of the ideas there highlighted are patently absurd, and one is just a bit too goatse. Update: somehow, I lost the last line: But it's great to have a way of getting ideas out there!

Civil society and earthquake recovery

There remains an excellent PhD thesis to be written on civil society responses in post-earthquake Christchurch. One man who will feature prominently: the University of Canterbury's Sam Johnson, who mobilised an army of students to clean liquifaction silt from thousands of Christchurch properties. Here's The Herald:

He led an army in the wake of the Christchurch earthquakes, and Sam Johnson admits there were times he felt like he was at war with the authorities.

The 22-year-old Canterbury University student mobilised thousands into a Student Volunteer Army to clean up tonnes of liquefaction - the silt and sludge produced when an earthquake hits loosely packed, water-logged soil - swamping neighbourhoods after the disastrous jolts.

His leadership has made him one of the finalists for the Herald's New Zealander of the Year award.

But he says there were times along the way when he was tempted to throw in the towel.

In the early stages, Mr Johnson says, Civil Defence tried to either shut down or take over the operation because of the risks of students going into a disaster zone.

Some senior city council staff and Army personnel were also "particularly 'anti' it". Mr Johnson was told he could be held personally liable if something bad happened to any of the volunteers.

And the Christchurch Mayor's reaction to the lauding of the hero who couldn't be stopped by his bureaucrats?

Christchurch mayor Bob Parker says he could not think of anyone more deserving of recognition. Mr Johnson's rallying of students to support quake victims was a "genius stroke". "He inspired a whole city, and actually a whole nation. He delivered to those most in need in our city. He was one of the great heroes of the Christchurch earthquakes."

Would be even better if he found those who tried to stand in Johnson's way, and fires them all. I have a hard time imagining that folks of that type are any kind of help in rebuilding town. HT: @KeithNg

Uniquely Canadian?

William Watson nicely points out two bits of "only in Canada" nonsense.

Item the first: Swine flu is spreading rapidly in Canada's Indian Reserves. Health Canada bureaucrats were then put in a no-win situation: send alcohol-based hand sanitizer and risk negative media coverage in the inevitable event that some of it is diverted to "inappropriate use" on dry reserves, or don't send it and be equally pilloried for not sending medical supplies.

The scandal is not that bureaucrats behaved like bureaucrats. The scandal is that people in Ottawa are signing off on whether people living thousands of miles away get hand sanitizer. If you go on eBay and look under “Soap Dispensers, Restroom Supplies, and Bathroom Supplies,” you get 183 hits on what look like the dispensers you see these days at every hospital entrance. We’re not talking nuclear isotopes here. There’s no worldwide shortage of sanitary hand sanitizer — if only because the private sector, not bureaucracy, produces it.

Update Colby Cosh weighs in here: apparently, Treaty 5 requires that the government keep intoxicants out of the reserve. But, if there are non-intoxicating hand sanitizers...

Item the second: well, I'll just turn it over to Watson. Recall though that it is illegal for parents simply to pay the doctors in this case: that would violate the sacred principles of the Canada Health Act.

To keep expenses down, Quebec’s Ministry of Health imposes surtaxes on physicians who make more than about $200,000 a year — gross of expenses. What with swine flu and all, it’s been a busy year for pediatricians. Some of those running the Tiny Tots Clinic apparently have already bumped up against their maximum income. As a result, they’re now going to be paid at 25¢ on the dollar for all the services they provide between now and the end of the year. Think of it as a kind of Tax Freedom Day in reverse. Tax Freedom Day is when you’ve earned enough in the year to pay all your taxes and can then start working for yourself. But if you’re a Quebec doctor, it works the other way around: As early as June, depending how hard you worked the first part of the year, you may start working almost entirely for the government.

Trouble is, 25¢ on the dollar doesn’t pay the clinic’s overhead. So the clinic has been restricting its hours while the doctors petition the Minister of Health for permission to be re-classified so they can keep working with full remuneration for the services they’re providing.

True North Strong and something or other.