Jim Traue: Bigger does not mean better

Over the past few years the Government has increased the number of state employees in a bid to rebuild the capability of the public service.

The numbers are impressive: contractors and consultants have fallen by 21 per cent, while permanent staff has increased by 28 per cent, with some 300,000 now working in the core public sector.

But as the numbers of those providing policy advice and carrying out the day-to-day activities of Government rise, the numbers of cock-ups due to poor policy advice, poor judgment and misreading of the evidence seems to be rising as well.

Problems with the Qualifications Authority and the NCEA, the flu vaccine, defence contracts, Te Wananga o Aotearoa and other tertiary education providers, have all flared in the past six months. Could there be something wrong with the system that numbers alone cannot cure?

Critics of the public-sector reform initiated by a previous Labour Government warned not only that the constant restructuring and downsizing would weaken operational effectiveness but that the reform philosophies could undermine the ability of the public service to perform its proper duties.

One of the milder critics, Professor Alan Schick, employed by the State Services Commission to audit the reform outcome, commented that the changes had produced a public service geared more to short-term production of outputs than planning.

The heavy emphasis on performance contracts and formal documents specifying accountability was producing a checklist mentality and compliance behaviour, an attitude that the most important measure of performance was adherence to pre-set rules, and that "if it isn't in writing, it's not my responsibility".

Professor Schick saw the acceptance of responsibility, rather than compliance with accountability documents, as the essence of the public service.

Others were more critical. To them the "new public management" was an ideology designed by Treasury theorists to force the public sector to behave more like business.

Its managerialist focus and emphasis on the market (even where there were no discernible markets) and preoccupation with efficiency and cost reduction would lead to a decline in ethical standards.

It would also lead to a careerist culture in which the priority would be in looking after one's own interests rather than the public interest (already an Auditor-General has succumbed), and public servants disinclined to offer the free and frank (and often unpopular) advice necessary for effective government.

These critics pointed out that the public sector was created to do what the private sector could not or would not, and that there were major differences between the two.

Private-sector businesses sought relatively simple outcomes - a healthy dollar bottom line, and not much more. The public sector had many bottom lines, and few of them clear-cut and measurable in dollars.

Typically there were endless demands and limited resources (think of education, social welfare, health, the police), different tasks (rehabilitating prison inmates is profoundly different from producing hamburgers), all coupled with high political visibility and constant scrutiny by the media and the public.

They also noted the high degree of interdependence of Government actions (decisions in education impinging on the police, housing on health) compared with the private sector. Public-sector management had been reduced to a numbers game - if you cannot measure it, you cannot manage it - where the judgment and good sense necessary for comprehending and assessing the importance of the non-measurable was undervalued.

Because of the complexity, and intractability, of the problems that the public sector has to deal with, and the need to please (or at least not embarrass) the minister and the Government, to avoid drawing the unwelcome attention of the media, to not antagonise the voters too much, and to contribute to the public good, wise decisions are required.

Good decisions take time and are more likely if there is a culture of free exchange of information, where vigorous debate and dissenting opinions are encouraged, and the focus is on getting it right, rather than on the bottom line.

Unfortunately, the transfer of the power to hire, fire and reward from the State Services Commission to the heads of departments, together with the dismantling of the appeals system, has weakened the professional independence of the public service.

Too much dependence on the boss is a recipe for muffling dissenting opinions, for conformity, for follow-the-leader right or wrong behaviour, and for faulty decision-making.

Adding to the problem is the strong residue surviving in Government departments from the management fad of the 1990s, "team management", with its stress on team building and loyalty. The slightest suspicion of not being a team player was the kiss of death in any job interview in the 1990s.

A strong body of research by psychologists has demonstrated that when conformity is strong, a number of conditions emerge, including informational and social cascades, group polarisation and incestuous amplification, all of which lead to bad decision-making.

In an informational cascade, members of a group quickly accept the position of a confident leader and suppress information and conflicting views that they hold. In a social cascade, people go along with the crowd in order to maintain the good opinion of others. In group polarisation, like-minded people close out dissenters, reinforce each others' views, and move to a more extreme position.

All these effects are significantly increased if people are rewarded not for correct decisions but for conforming to others' decisions.

Recent history (the Bay of Pigs in Cuba, Lyndon Johnson in Vietnam, George W. Bush in Iraq) and business (Enron, Worldcom and Tyco) is littered with cascades and group polarisation, where dissenting views and conflicting information were suppressed, and bad decisions made.

Hans Andersen's tale of the emperor's clothes is a perfect example of an informational and social cascade, amplified by the emperor's coercive power, and persuading people to deny the evidence of their own eyes.

The strengthening of our public service will need more than numbers; it will need a major climate change to encourage more public servants to tell what they plainly see, just like the child in Andersen's tale.

* Jim Traue is a former career public servant and chief librarian of the Alexander Turnbull Library.