Friday, 28 August 2020

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.)

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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.

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