Government by ‘Consultant’ can hollow out the State

One of the great perks of a career as a policy wonk is that you get a ringside view of government. From the unventilated, dusty rooms of the Panchayat secretariats in villages to the corridors of power in North Block, I’ve spent years engaging with government as a researcher and policy interlocutor, but with the luxury of a participant-observer with “reflection” built into my job description. A few weeks ago, I was asked to identify one big shift in the everyday life of government. The “consultant” was my immediate answer. You cannot walk into a government building today without bumping into the “consultant” – a private/non-profit sector employee, often young, committed graduates, racing about in the corridors, doing the job of bureaucrats. From the data-entry operator in jeans to the suited-booted consultant working side-by-side with senior civil servants, the consultant is, today, omnipresent. This is the 21st century Indian State -- a hydra-headed organisation made up of permanent public employees and a parallel new bureaucracy made up of non-state, private employees.

This is not a uniquely Indian phenomenon. The “consultant” performing functions outsourced to them by government is a global phenomenon. The “new public management” (NPM) school of thought that has dominated governance thinking since the late 1980s legitimised their presence by valorizing “efficiency”, “market competition” and “business-like models”. The government labyrinth with its red tape and maze of Weberian rules was simply incapable of efficiency and thus “outsourcing” was a legitimate option. Crucially, this was about managing fiscal costs. “Efficiency” is a useful ruse to legitimise curtailing necessary government expenditure on public welfare.

In the Indian context, NPM apart, weak State capacity, corruption, and an increasingly complex policy environment where technical expertise is a necessary complement to the generalist bureaucrat, created their own sources of genuine legitimacy. From public services to big infrastructure, consultants are involved in every aspect of administration. They make policy design, draft rules, manage procurement, provide HR support -- including setting up project offices, hiring and training contract employees who draft documents -- implement programmes, and undertake third-party evaluation. The permanent bureaucrats oversee this entire exercise, routinely drawing on consultants to support their everyday tasks.

These myriad roles played by consultants have also created an extremely heterogeneous ecosystem. From the embedded non-profit and specialised social sector company -- often supported by the global multilaterals (UN, World Bank) and philanthropy -- to think-tanks (mea culpa) to the private global consulting firms, especially the big four, the “consultant” is hydra-headed.

In a complex policy environment, engaging expertise with a deep understanding of social realities in policy design and to experiment with implementation models is a legitimate, even critical, contribution. It brings evidence and rigour to policy choices and fuels innovation. After all, the very existence of my profession is aligned to precisely this purpose. I believe in its importance. Moreover, there are services where private sector efficiency trumps government capability – outsourcing passports is one example, contracting in IT services is another. Crucially, consultation, engagement, innovation and dialogue in policymaking are an essential democratic act and, in a limited way, the “consultant” is part of this democratic process.

But it would be a disservice to our professional purpose if we --consultants and bureaucrats -- fail to interrogate this new “parallel bureaucracy” and examine the risks it poses to the goal of building State capacity and bringing evidence and innovation in policy.

I see three key risks. First, doing the job of the State lets the State off the hook. When government “outsources” even its routine functions, in the name of efficiency, you have to ask if it’s a symptom or a solution. After all, the first measure of “efficiency” is getting your workers to work, not bypassing them to farm off work to others! More important, this disincentivises the State from focusing on the hard problem of skilling the State – getting recruitment and training right. It is routine to hear senior civil servants complain about poor quality talent downstream, which in turn pushes them to “outsource”, even as State administrative training has been left to rot.

This, in turn, creates a culture of disenchantment and demotivation in which the system believes the “consultant” is more capable of delivering core public goods than the State. In my view, this, more than NPM, drives the preference for public-private partnerships even in core government functions like health and education. This is a vicious cycle. Once you stop believing, you stop building capacity. Moreover, it pits the consultant in conflict with the administrator, who then obstructs the consultant rather than learns from them. And when the consultant goes, the State is hollowed out.

Finally, accountability. The guiding values, vision and mission of government is, fundamentally, accountability to citizens, forged through a political consensus within the democratic framework. Private actors are accountable to the ideas they believe in, to the technical communities of practice in which they are embedded, and to their stakeholders. When the line between sharing ideas, evidence and expertise in policy design and actually doing the job of the government get blurred, this core democratic process of political consensus-building and accountability breaks down, fueling rather than resolving the reality of corruption, poor implementation and bad governance that legitimised the “consultant” in the first place.

To be clear, consultants matter. In a democracy, they play a legitimate role in bringing ideas, innovation, evidence and expertise to policy. This is critical in the complex world of government in the 21st century. But it is worth remembering that the consultant is only effective in a capable State, and often less than useful in a disenchanted State that has stopped believing in its own capacity.