Thursday 18 April 2019

Howling at the Treasury moon

I like the headline that The National Business Review put on this week's column. It isn't online yet; I've a few snippets below:
Big organisations get up to a lot of stuff that looks pretty silly from the outside – and even from the inside. Corporate retreats with ridiculous team-building exercises. Awkward social functions. Corporate family picnics when you would all rather prefer to be out with your own friends.

Anybody who has ever worked in a big organisation knows this. Even smaller organisations sometimes get into this game. It is hell for the more analytically minded and introverted among us, and doubly so for analytically minded, introverted economists, but such exercises seem to serve a functional purpose. It is easier to work with people if you know them better. And it is important to know people outside your own smaller team because others might know things you need to know.

Last week, Treasury caught critique, and even some ridicule, for hosting an event with Heartwork scheduled for 17 April.

On the face of it, the event did look risible. The event teaser, after all, initially invited readers to “Imagine surprising Aotearoa with a strain of compassion so delightful that it re-wires our collective consciousness!” After featuring on the evening news and in a question to the Prime Minister in Parliament, the Heartwork event’s invitation has been toned down just a little.

In any case, it is definitely not your father’s Treasury. But perhaps your woke nephew’s Treasury.


But is a failure to consult sun and moon feelings really at the root of Treasury’s problems?
After going through the declining capabilities in economics at Treasury, often canvassed here, I hit some of the implications:
All of that would make for a very difficult workplace environment with a change in government. Rapid changes in policy priorities and direction require staff with the training and expertise to shift quickly into new areas. Where Treasury has not been able to keep up with an outflow of economic expertise, a greater burden would fall on those analysts able to handle the work. Rebuilding capability in Treasury’s core work would reduce pressure on staff, improve outcomes in external surveys, and help Treasury in its role as advisor to government.

But there seems to be a schism within Treasury.

Some have taken the government’s wellbeing agenda to heart, and put it within an economic framework of a kind. Others seem to have taken the wellbeing agenda to mean rigour is passé, quantification is bad, and advice should be based on holistic views that lack an underlying economic framework. In that view, little economic expertise is needed in policy analysis beyond that which can be provided in a few days of training sessions on-the-job.

George Mason University Professor of Economics Peter Boettke likes to say economics puts parameters on our utopias. Putting the different measures of wellbeing into a consistent cost-benefit framework reminds us that we live in a world of trade-offs. Resources put to the pursuit of one wellbeing objective are generally resources not put toward the pursuit of another. Getting rigorous assessments of the effects of policy is needed if the government’s wellbeing agenda is to be taken seriously.

All that then brings us back to the Heartwork card game. Big organisations like Treasury will have this kind of thing. But even if it helps staff to better understand themselves and each other, it is far from addressing the underlying problem at Treasury. Worse, it feeds into a sense of wellbeing as woo at Treasury. Even worse, can you imagine being one of the relatively few remaining economists at Treasury and being asked to play a game about your sun and moon feelings?

A Treasury that addresses symptoms of the underlying problem with sun and moon games rather than by strengthening its capabilities may not be a Treasury that can do its necessary part in improving the quality of government services under the wellbeing agenda. It is remarkable that two senior Treasury managers have made the wellbeing game a priority.

Secretary Gabriel Makhlouf’s tenure as Chief Executive ends mid-year. While no announcements have yet been made about his successor, it is critically important that a strong appointment be made. Treasury needs to be able to rebuild its core capabilities and needs a Chief Executive who takes that work seriously. But it is hard to throw a stone in Wellington without hitting someone who will tell you it is not in the interest of the State Services Commissioner to provide a strong appointment.

I very much hope Minister Grant Robertson will be watching this appointment process closely and ensuring that the candidate can provide him the kind of Treasury he needs. It is important. We may all yet wind up with moon feelings otherwise.

If all of that's too depressing, here's some Ozzy Osbourne to help. 

Bark at the moon.

Update: here's an ungated link; here's a gated link.

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