When students begin their studies of economics, they often take everything at face value in their introductory textbooks. There are consumers seeking the biggest bang for their buck. There are firms aiming to maximise profits.
And, of course, there are politicians and bureaucrats whose sole purpose is to make the whole system run more smoothly for everyone’s benefit.
Such naïveté, however, rarely survives the students’ first encounter with public choice theory (let alone the reality of working within a ministerial bureaucracy). Individuals always act to maximise their own utility, no matter whether in the marketplace or in a ministry. That is the basic insight of public choice theory.
Or, as Depeche Mode once sang, “People are people.”
Sometimes pop music really delivers deeper truths. People who are selfish in their personal lives do not magically become selfless when they enter public service.
Tony Burton has given this reality considerable thought. His report, Demystifying the State offers readers an insightful exploration of New Zealand’s machinery of government.
Drawing on his experience within the system, Tony strips away the mystique surrounding the state. And guess what: once he has done that, we see a profoundly human institution. Except ‘human’, in this context, should be read as ‘multi-faceted’ at best … and ‘deeply flawed’ at worst.
Tony examines people’s motivation in the public sector. He challenges the idea that bureaucrats are driven solely by noble motivations like a spirit of service.
His report also introduces the concept of ‘institutional mismatch’ to explain policy failures. This refers to situations where government institutions are ill-suited for their intended tasks. It is not just that government is sometimes failing. It is more that government, under some institutional settings, cannot possibly succeed.
Throughout his report, Tony emphasises the many limitations of the state. But as he points out, these limitations are all too often overlooked.
As a localism advocate, I find Tony’s analysis particularly compelling. The problems he points out – like the widespread lack of accountability and information issues – often arise because of remote government structures. Bringing government closer to the people could thus be part of the solution.
Demystifying the State helps us to understand the state for what it is, not what it would be in an ideal world. That said, it also gives us ideas on how it can be improved.
To borrow again from Depeche Mode, such improvements are about figuring out why people inside and outside the state apparatus “should get along so awfully.”
I look forward to reading more about this in the sequel to the current report.
