Big Reform Programme Underway

19/2/2024

Public management reform worldwide follows four main themes: fiscal stability, managerial efficiency, improved capacity and better public accountability.

Fiscal reforms are generally the most consistently pursued. They are far-reaching and directly affect the well-being of public sector employees, state capacity, and social cohesion. They mostly involve downsizing, reducing input and output expenditures, privatising, and reforming taxes.

Managerial efficiency reforms focus on restructuring and introducing new markets or quasi-market principles in delivering public services. These reforms rely on devolution, regionalisation of significant parts of the public sector, resetting the monoliths, and emphasising performance contracts.

Between Australia and us, we mostly do the first or second types of reforms.

Capacity and capability-building reforms tend to be restricted mainly to the post-conflict and developing world. Those reforms focus on building technical capacities in policy and monitoring, managing recurrent expenditure, and ensuring the sustainability of projects, public investments, and pay reforms.

The final type of reform deals with public accountability and seeks to improve community demands for deliberative democracy, participation, and transparency. This is where we see Citizen Forums, Citizen Charters, Local Ombudsmen and research and monitoring functions held locally. We see these reforms in the EU, Latin America and parts of the US. It is the domain of deliberate democracy.

International financial institutions attach primary importance to fiscal stability, followed, in descending order, by managerial efficiency reforms, capacity-building reforms, and public accountability. At the same time, those same institutions prefer not to see public management reforms undertaken as a mix-and-match or done simultaneously, as each reform type is a significant undertaking in and of itself.

This should give us pause for thought.

Our current government has a reform programme leans into the four reform types.

This is not a criticism. See my previous posts about the importance of reform, particularly a focus on outcomes, performance, and capability for a purpose. Think of this as a description.

We are in the middle of the most complex public management reform since the early 1990s. Consciously or not, the government has pushed out on all four fronts.

For example, under fiscal stability themes, we see expenditure reduction and talk of more private sector involvement.

Under managerial efficiency, the government is proposing devolution and decentralised and regional management, including city deals; they are also changing executive agencies, changing membership of the various Crown entities and state-owned enterprise boards, emphasizing performance, and looking at more off-book financing options.

Under capacity and capability building, they are making significant changes to the policy advisory system by introducing the new Ministry of Regulation. They are sending solid signals on pay reform with their approach to police negotiations and infrastructure investment decisions now being made in the political authorising environment, not with the policy advisory system.

Finally, on accountability, representative democracy is more important than deliberative democracy, and collective and individual accountability matters. What will be interesting is to see how outcome reporting shapes up and possibly strengthens accountability.

By the way, I am all for reform.

Improving our institutions’ performance is essential to maintaining and improving trust and confidence. I have a whole series on my blog about the urgent need to reform the strategic centre. But commissioning a reform programme on all four fronts – holy hika. And, commissioning it when the strategic centre and purple zone seem unfit for purpose – also holy hika.

Anyway, I end where I began. We are one of the world’s first nations to undertake many reforms across al four fronts. It is needed.