Let’s Take The ‘Con’ Out Of Consultancy
By Peter M. Jackson
This article was first published in Public Management and Policy and is reproduced by permission of the Association. http://www.cipfa.org.uk/pmpa/index.cfm
In a recent article in Public Money & Management, Christopher Pollitt carefully and perceptively considered the academic advice given to practitioners (Pollitt, 2006). Reading this article gives rise to a number of thoughts which I explore in this short essay and which I shall develop in much greater length in a forthcoming article which will be published in the June 2007 issue of PMM.
The long shadow of the enlightenment
This is the age of knowledge management and evidence-based policy. Just as the 18th-century enlightenment replaced superstition and beliefs in the supernatural with scientifically grounded theories, supported by empirical evidence, about how the world really works, so too has there been apparent progress in the policy and management sciences. Members of the academy have developed theories of the socio-economic world, tested these theories and provided evidence-based prescriptions for policy-makers to intervene and thereby improve economic growth and social welfare.
As the shadow of the enlightenment lengthens, however,deep-seated questions are being asked about the value of our knowledge bases, especially when itcomes to the improvement of the performances of economies, their institutions and their organizations. Much of this knowledge is thrust upon the community of practitioners who are not always in a strong position to evaluate its worth.Equally, members of the academy proffer advice without understanding the world of practice and in many cases have never engaged with their subject matter.
Not only does this raise basic questions about the relationship between theory and practice, an issue addressed by Christopher Pollitt, it also encourages debate about what members of the academy should be teaching their students, especially their graduate students. Indeed, are all members of the academy adequately equipped to impart to their students the necessary practical skills of the policy adviser?
Where is the ‘con’ in economics?
Regarded as the queen of the social sciences, economics has for the past 80 years provided the tools for predicting the impacts of policy.Welfare economics established the foundations of policy evaluation. The economists’ framework enable defficiency gains and losses to be explored and in some cases measured and compared to the equity issues of who gained and who lost as a result of a policy change. Policy analysis, even today, is often regarded as applied economics.
Despite the undoubted improvements which economics has brought to policy analysis, the value of much of our economic knowledge past and present, is now being challenged. Economists’ views of individuals (what motivates them and which interests they value) is far too narrow. The real world is one of diversity and heterogeneity and yet the economists’ dominant world view washes this out by focusing on the representative individual or the average firm.
The training of economists, especially at the graduate level, is unbalanced. Too many graduates are expert in theory (especially game theory), but know very little about the messiness of the real world or how real economies work. We are producing graduate economists who do not have a feel for the stylized facts of an economy, nor do they know the role played by economic institutions. They are schooled in high-powered econometric techniques but have little or no respect for data, both for the challenges of collecting them and the issues of interpretation. Facts are no longer the basis of truth. Facts are instead socially constructed, which means that truth claims are relative and not absolute and are subject to frequent changes.
These criticisms should not be interpreted as a denial of the significant insights that analytical and empirical economics have made to policy discourses. Economists have an important contribution to make when it comes to designing institutions, and emphasising the importance of appropriate incentives. By taking more of a holistic view, they identify some of the unintended consequences of policy. Moreover, economists have examined the problems of time consistency and the credibility of policies.
In order to further add value to the policy process, however, economists need to spend more time reconsidering their ontological foundations rather than investing ever more efforts into epistemic considerations. The real world is increasingly complex, non-linear, and path dependent. This means that initial conditions are important and that forecasting models predicated upon assumptions of linearity will be at best incomplete and often downright wrong.
The speed of change adds both to complexity and to the degree of uncertainty of the policy environment. This adds fragility to our knowledge bases—a point made eloquently by the late J. K. Galbraithin his 1958 book The Affluent Society:‘The enemy of the conventional wisdom is not ideas but the march of time’.
The power of ideas and words
It is widely acknowledged that there exists an ‘advice industry’. This is the world of consultancy in which ideas compete for acceptance. In this industry practitioners are often assumed to be passive recipients of advice (‘truths’) handed down by the high priests of the academic community. What, then, is t he natureof the relationship between the academy and the world of practice? Sometimes it is direct but often the academic assumes the role of a wholesaler supplying ideas to retailers (consultancy firms and thinktanks).
The role of the academy should be to get the grammar of the argumentsof policy right. However, in reality,many academics are apologists and glorifiers of market fundamentalism.They frequently provide intellectual support for dubious policies and practices, i.e. policies that have little hope of success or supporting processes that have at their base the offensive treatment of individuals.
The power of ideas and words are made effective through persuasion and rhetorical skills which public intellectuals master. Joe Stiglitz, a Nobel Prize winning economist and policy advisor, subscribes to the political economy model of policy advice. Writing about his experiences as chairman of President Clinton’s council of economic advisers and as chief economist of the World Bank, he points out that while most academics will argue that isssues and problems should be viewed in a dispassionate way and that evidence should be looked at before a decision is made, in reality policy-making does not work like that. Decisions, he found, were based on ideology and politics. The result was that many wrong decisions were made. These decisions did not solve the problem but, rather, served the interests and beliefs of those in power.
How then are we to take the ‘con’out of policy consultancy? Look to unconventional wisdom. Acknowledge that today’s networked world is more complex and uncertain than in the past; that linear solutions are not a good approximation for a non-linear world; and that simple policies,which only take a partial view, are unlikely to solve ‘wicked problems’. Moreover, we need to be very cautious of evidence bases—these are not value free. If we are to raise the quality of the whole policy-making process, then our graduate students need to better understand that process and its institutions and be better skilled at playing the policy game. Finally, academics who cross the line into the world of policy advising need to be better aware that, if their words and ideas are to have any power, then they need to acquire the skills of persuasion and rhetoric.
While the 18th-century enlightenment promised mastery and control over the physical and biological world, this is now proving to be increasingly difficult. Mastery and control over the social world is even more problematic, especially given that the object of control can, through its own countervailing strategies, usurp the power of policy interventions.
¦Reference. Pollitt, C. (2006), Academic advice topractitioners—what is its nature,place and value within academia?Public Money & Management, Vol. 26,No. 4, p 257
Peter M Jackson is with the University of Leicester.