Published in Quadrant (Sydney), 28 December 2024
When a councillor in New Zealand’s Carterton District was elected on a platform of fiscal responsibility, she could not have expected to be barred from participating in budget deliberations. Yet that is exactly what happened when council bureaucrats deemed her campaign promises a “conflict of interest” that disqualified her from key financial decisions.
Her supposed conflict? She had campaigned on fiscal responsibility! Even after intervention from Local Government New Zealand, she remained partially excluded, missing crucial votes—including one that revealed rates would increase by 17.5 per cent rather than the 15.09 per cent originally proposed.
This story from a small town in New Zealand illuminates something significant: the growing dominance of unelected bureaucracies over elected officials at every level of government and across the democratic world. The pattern is remarkably consistent. Whether in federal systems like Australia’s or centralised administrations like the UK’s, permanent bureaucracies have steadily accumulated power at the expense of elected representatives.
At the national level, ministers often find themselves unable to implement promised reforms against departmental resistance. At state or regional levels, bureaucrats shape policies with minimal democratic oversight. And at the local level, councils increasingly function as administrators of centrally-determined rules rather than representatives of their communities.
This creeping bureaucratisation creates what Sam Freedman terms a “democratic void” in his penetrating new book Failed State: Why Nothing Works and How to Fix It (2024). Freedman draws on his extensive experience as a Whitehall policy adviser and policy researcher to examine how unelected officials have come to dominate decision-making across all levels of government.
The consequences of this bureaucratic dominance extend far beyond individual cases of overreach. When unelected officials effectively control policy-making and implementation, it fundamentally alters the relationship between citizens and their government.
Take planning and development. Across Australia, New Zealan,d and Britain, local councils face most of the political and infrastructure costs of new development, while the resulting tax revenues flow to state and federal governments. Is it any wonder they often resist growth? When bureaucrats in distant capitals control planning decisions affecting local communities, should we be surprised that citizens feel disconnected from the process?
This disconnect manifests most visibly in housing policy. While politicians campaign on promises to tackle housing affordability, bureaucratic inertia and misaligned incentives frustrate meaningful reform. The results are visible in soaring house prices across the English-speaking world.
The problem is not confined to local government. At the national level, ministers increasingly find themselves trapped in a system they nominally head but struggle to control. Policy implementation becomes an endless negotiation with permanent bureaucracies that outlast successive governments.
This bureaucratic dominance is self-reinforcing. Career civil servants develop expertise in managing complex regulatory systems, which they often helped create. They build networks across departments and agencies that can outlast several electoral cycles. Their institutional memory becomes a source of power, as elected officials must rely on their knowledge to navigate governmental machinery.
When reforms are proposed, bureaucracies can deploy various tools to resist change: procedural delays, technical objections, implementation challenges, and the ever-present concern about “unintended consequences”. The result is a system that increasingly serves its own interests.
Yet this crisis also presents an opportunity for democratic renewal. Around the world, a new model of governance, which we might call the new localism, is emerging that could help rescue democracy by bringing power closer to the people it serves.
Switzerland has always demonstrated how genuine democratic control at the local level creates better governance and higher citizen engagement. Swiss cantons and municipalities run most public services, from education to policing, and raise their own taxes. The result is not chaos but enviable efficiency, with citizens exercising real choice over local policies and tax rates.
France—long considered the archetype of centralised administration—has been devolving power to local governments since the 1980s. French municipalities and departments have gained genuine autonomy, accompanied by resources to exercise it. Local government spending has nearly quadrupled in real terms since 1982 as a result.
Germany’s federal tradition offers additional insights. In the 1990s, the state of North Rhine-Westphalia found ways to strengthen local democracy by transforming its mayoral system. The reforms merged the roles of mayor and chief executive, creating clearer lines of accountability while maintaining the country’s tradition of local autonomy. Despite initial resistance, these changes passed with cross-party support and now enjoy broad backing.
These examples demonstrate that centralisation is not inevitable. It is a choice—and, increasingly, a poor one. In an age of complexity and rapid change, the idea that all wisdom resides in national capitals is outdated. Communities face diverse challenges requiring local knowledge and flexible responses, not one-size-fits-all solutions imposed from above.
For Australia and other Westminster democracies, the implications are both challenging and promising. While Anglosphere countries pride themselves on their democratic traditions, they have allowed creeping centralisation to hollow out local democracy. In Australia, councils control just 6 per cent of public spending, compared to an OECD average of around 30 per cent.
This weakness of local government creates real costs. Housing affordability, as mentioned above, is one example. Infrastructure provides another telling example. Local knowledge is crucial for identifying and prioritising infrastructure needs, yet councils lack the resources and authority to address them effectively. Instead, we rely on state bureaucracies to make decisions about local facilities and services, often with limited understanding of community needs and preferences.
The result is a democratic deficit that undermines accountability at all levels. When problems arise, state and federal politicians blame councils for poor execution, while councils point to insufficient resources and authority.
The path to reform should be clear, but it is also politically challenging. First, we must reconceptualise local government not as a mere administrative arm of the states but as a genuine tier of democratic governance. This means giving councils real authority over local affairs, accompanied by the resources to exercise it effectively.
Second, we need to align incentives with responsibilities. This could involve for example sharing GST revenues from new development with councils, creating a direct financial stake in local growth. It might also mean giving councils access to a broader range of revenue sources, as many other developed countries do.
This is not merely about making local government work better, though that would be valuable in itself. It is about rescuing democracy from the technocratic centralisation that threatens its vitality across the developed world. When we reduce democracy to periodic elections for distant parliaments, we should not be surprised when citizens become disconnected and cynical.
Technology now makes genuine local democracy more feasible than ever. Digital tools can enhance transparency, facilitate participation, and reduce administrative costs. Yet instead of using these capabilities to empower local communities, we have largely deployed them to strengthen central control.
When citizens have real power over local affairs, they engage more deeply with democratic processes. Local democracy is where citizens can most directly shape the decisions that affect their daily lives. It is where abstract political principles meet practical reality, where trade-offs become tangible, and where communities learn the essential arts of democratic deliberation and compromise.
For Australia, this suggests looking beyond technical debates about council amalgamations or funding arrangements. The fundamental question is whether local government should function as a genuine democratic institution or remain primarily an administrative arm of the states.
The evidence from continental Europe indicates that meaningful local autonomy, supported by aligned financial incentives and clear accountability, can improve both democratic engagement and administrative effectiveness. Their experience also shows that such reforms require careful attention to institutional design and implementation.
Strengthening local democracy offers one practical path to addressing bureaucratic capture. Not because local government is perfect, but because it provides the essential foundation for democratic citizenship. In rescuing local democracy, we may find we are rescuing democracy itself.
