Management consultants, the state, and the politics of administrative reform in Britain and Canada.

Recent contributions to the literature on bureaucratic reform suggest that profit-seeking consultants from the private sector are one of the main driving forces behind the global spread of New Public Management (NPM) ideas. But contrary to what is expected, the growing role of consultants in the construction of the "post-bureaucratic state" in Britain and Canada did not lead to policy uniformity or convergence in the acceptance of NPM ideas. To explain these differences, the article focuses on the ways in which the differential access of consultants to decision-making centers inside the state influenced the application of the business management ideas that they bring to the policy process.

The management processes and structures of most Western states have changed radically since the mid-1980s (Caiden, 1991). These transformations are said to be part of a revolutionary change in public administration that involves a paradigm shift from the Weberian model of bureaucracy, dominant for most of the century, to the New Public Management (NPM) (Barzelay, 1992). NPM is shorthand for the group of management ideas imported from the business sector that dominated the bureaucratic reform policy agenda of many Organization of Economic Cooperation and Development (OECD) countries since the 1980s (Aucoin, 1990; Hood, 1990). During the 1980s, British and Canadian officials introduced numerous NPM policies and increasingly used the services of management consultants from the private sector in their attempts to make the administration of the state more "entrepreneurial" (Osborne & Gaebler, 1992). As one government official explains, management consultants entered

public administration in a major way in the 1980s. Criticism had mounted

against the bureaucracy on several fronts: its working methods, the

qualifications of its employees, and its efficiency and rationality. Free and

independent consultants were expected to show their worth, drawing from their

experience and qualifications from the private sector to improve on the

government bureaucracy. (Blymke, 1995, p. 127)

In 1990, the British Treasury issued a guide entitled Seeking Help from Management Consultants. According to the guide, consultants "can help make dramatic improvements to the work of Departments [by] importing experience" from the private sector to the government (Her Majesty's Treasury, 1990, pp. 8-9). Similarly, in Canada, the Treasury Board issued in 1991 a circular that encourages officials to "take full advantage of the benefits of professional resources outside the government in private sector consulting firms"(1) as a way to create a "more flexible and innovative management environment" (Office of the Comptroller General, 1991, pp. 3-4).

EXPLAINING THE RISE AND SPREAD OF NPM IDEAS

As private sector consultants became increasingly active in the process of administrative restructuring, a new approach for explaining the emergence and diffusion of NPM ideas began to develop in the literature on comparative bureaucratic reform. During the 1980s, students of public administration saw the rise of the New Right (as exemplified by the election of Thatcher in Britain and Mulroney in Canada) and factors related to the fiscal crisis and the process of global economic restructuring as the main causal variables explaining the spread of NPM ideas and policies across nations. But in the early 1990s, as analysts started to note the presence of more business consultants in government, what might be termed a management consultant-centered approach emerged in a number of articles and books devoted to the NPM. This new approach sees the rise and diffusion of NPM ideas as a process "driven primarily by private sector consultants" (Boston, 1991, p. 9). In the consultant-centered perspective, the influence of the NPM is based on the idea of "consultocracy" a term coined to describe the growing power of the management consulting industry (Hood & Jackson, 1991, p. 24). Consultants are viewed as rational actors who--because they work for profit-based organizations--have deeply vested interests and important financial stakes in pushing for the implementation of more and more NPM policies within the state. The NPM is "a vehicle for particularistic advantage. The claim is that NPM is a self-serving movement designed to promote the career interests of an elite group of New Managerialists" made of "management consultants and business schools" (Hood, 1991, p. 9). "Management consultants" others similarly argued,

have clearly played an important role in packaging, selling, and implementing

the [NPM] reforms. Management consultancy has become big business

.... [Consultancies] have developed into multinational giants which

have deeply vested interests in terms of future work, in selling the ideas,

language, and methods of [NPM]. The consultancy firms have highly developed

international networks through which many of these profitable

ideas have been transmitted and translated. The consultancy firms' important

role helps to explain not only the uniformity of ideas and principles

but also the uniformity of language and practices. (Greer, 1994, p. 29)

THE LIMIT OF THE MANAGEMENT CONSULTANT-CENTERED APPROACH

Is there a link, as the above quotation suggests, between the growing presence of business consultants in government and the uniformity of NPM policies across nations? Recent work indicates that in many countries, consultants are indeed "busy colonizing the vast bureaucracies of the welfare state" (Wooldridge, 1997, p. 3), but the literature on administrative reform has clearly showed that there is no uniformity in the influence that NPM ideas have had on state management practices. As Christopher Hood (1996) recently argued, "OECD countries have varied in the extent to which they adopted [NPM] doctrines in the 1980s" (p. 270).

It is not the purpose of this article to review all the cross-national differences in the reception accorded to NPM ideas, as these have already been well documented in a number of important studies, showing that countries such as Britain, New Zealand, or the Netherlands have laid much more emphasis on NPM ideas than others (Campbell & Wilson, 1995; Massey, 1993; Pollitt, 1990; Zifcak, 1995). Similarly, my goal is not to explain the influence of NPM ideas on policy by saying that consultants are more important than factors related to the rise of the New Right or the process of globalization. Ideological and structural factors are, of course, important determinants, but it is difficult to explore the impact of every possible variable in the scope of a single article. Rather, my objective is to shed some light on an unknown aspect of modern governance by looking at the role of consultants in the process of bureaucratic reform in Britain and Canada, two countries that are said to be part of the same "family of nations" (Castles, 1993). In their comparative studies, both Savoie (1994) and Aucoin (1995) have conclusively demonstrated that the British are far more advanced than Canadians in the extent to which their government embraced NPM ideas. As they found, Canadian political leaders have not shown the same enthusiasm as their British counterparts in supporting NPM policies, even though these policies were often imported from London to Ottawa.

For the consultant-centered perspective, these differences are difficult to explain. In this approach, the increasing presence of consultants in the public sector is linked to the "hollowing out of the state" a phrase suggesting that the "state is being eroded or eaten away" by privatization, contracting-out, and so on (Rhodes, 1994, p. 138). Because of this hollowing out process, the state is either seen as being captured or as an empty shell through which management consulting interests can easily press their views and get their preferences almost automatically translated into policies. The result is that state management policies across the globe should tend to be uniform because the NPM preferences of consultants are everywhere the same. But if this view were adequate, there would be no differences across nations in the acceptance of NPM ideas and policies. Does the fact that NPM ideas have not been as influential in Canada as in Britain mean that Canadian consultants are not as "rational" as their British counterparts? Or is it that consultants may have similar policy preferences cross-nationally but that they cannot influence policy in the same way or to the same extent in different national contexts?

These are the questions that this article addresses. To do so, I incorporate into the consultant-centered approach a more complete model of the policy-making process as a whole. As currently framed, the consultant-centered approach cannot explain variation in the influence of NPM ideas because there is no serious examination of the intervening processes by which consultants, as the bearers of NPM ideas, enter state institutions and shape policies. To correct this situation, I develop a framework that focuses on the interrelations between consultants and the state, which I subsequently use for the comparative analysis of Britain and Canada. In a nutshell, I explain differences between Britain and Canada by highlighting the ways in which the differential access of consultants to decisionmaking centers in the state influences the application of the business management ideas that they bring to the policy process.

STATES, MANAGEMENT CONSULTING KNOWLEDGE, AND NPM POLICIES

Recent historical-institutionalist work examining the links between states and social knowledge provides useful insights for constructing an explanation that seeks to account for differences in the acceptance of N-PM ideas by looking at the role of consultants in the bureaucratic reform policy process (Furner & Supple, 1990; Hall, 1989; Rueschemeyer & Skocpol, 1996). There is an important literature on the relations between state formation and the growth of modern professions in the 19th century, but there is almost nothing on more recent processes of state transformation and their impact on knowledge-bearing occupations, such as management consultancy. The reason for this absence is simple: Most analysts have looked at the development of the entrepreneurial state as a process of dismantlement and not as one of institutional transformation. It is not seen as an emerging new state form but simply as the replacement of the state by the market (Self, 1993). But this view is too simplistic. The entrepreneurial state is more than just the deconstruction of the Weberian bureaucratic state. As many studies have shown, its development in the last 10 years often required the creation of new organizational capacities and generated increased knowledge needs and management expertise in the design of market-type mechanisms (OECD, 1993), in contract management and monitoring (Gow, 1995), in the development of program evaluation and performance indicators (Cave et al., 1990; Henkel, 1991), and so forth.

Government officials have increasingly mobilized management consultants in the process of making new administrative policies based on ideas and techniques imported from the business sector (Saint-Martin, 1998). In Britain, public expenditures on external consultancy grew sharply between 1985 and 1990, increasing fourfold over this period to reach 242 million [pounds sterling] in 1992-1993 (Efficiency Unit, 1994, p. 46). In Canada, spending on private sector management consulting services has gone from $56 million in 1984 to $190 million in 1993 (Treasury Board Secretariat, 1994). These numbers suggest that in the last 10 years, consultants massively entered the state and that policy makers in Britain and Canada have increasingly been exposed to the business management ideas and practices that consultants bring into the policy process. But nevertheless, there are differences in the extent to which British and Canadian policy makers embraced these ideas in the process of making their government more entrepreneurial.

POLICY LEGACY AND ACCESS TO DECISION-MAKING CENTERS

To explain such differences, historical-institutionalists have used the concept of policy legacy, suggesting that policy making is inherently a historical process in which actors learn from past experience and consciously build on or react against previous government efforts dealing with similar problems (Weir & Skocpol, 1985, p. 119). In the field of bureaucratic reform, talking about the NPM implies that there previously existed an "old" public management (OPM), and in fact, such a periodization is sometimes found in the literature (Pollitt, 1993, pp. 354-355). The OPM is generally associated with the rationalistic thinking of the 1960s, as exemplified by the Planning, Programming and Budgeting System (PPBS) and the social indicators movement (Van Gusteren, 1976). The OPM is conceived as having been more technocratic, more ambitious, and confident in the capacities of social sciences to solve public problems; it is reported as having led to "grand schemes" and bureaucratic growth (Meyer, 1985). By contrast, the NPM is less bureaucratic (Aucoin, 1990, p. 117). The market, as opposed to rational planning, is seen as the privileged means to solve public problems (Taylor-Gooby & Lawson, 1993).

To understand the possibilities for NPM ideas and policies to become influential, it is therefore necessary to go back and study the state's prior experience with policies of the OPM period. One has to see if there are any links between the policies derived from the periods of the "old" and "new" public management.

Accordingly, our strategy to explain differences between Britain and Canada will be to focus on the legacies of past bureaucratic changes that (a) influenced the predisposition of policy actors toward strategies for improving the management of the state and (b) affected the participation of consultants in the process of administrative reform and their access to decision-making centers through which NPM ideas did (or did not) enter into the formulation of policy.

In the pages that follow, I show how management …