OPINION: It was when I was working as a reporter in London, around a decade ago, that I first began to think something had gone seriously wrong with our attitudes towards government.
The global financial crisis was in full swing, and the privatised infrastructure schemes I was covering were in serious trouble. These were schemes to build public schools, hospitals, roads and the like, but the initial finance (and indeed the building and maintenance work) was provided by the private sector.
Supposedly this was more efficient. In practice, when the crisis struck, virtually no private firm was willing to lend to another. So the infrastructure providers had to pay exorbitant amounts to raise the money – a cost they promptly passed on to the public sector. In a miniature version of the wider financial crisis, the British government was forced to fork out by a failure created entirely in the private sector.
But while the financial crisis had revealed these problems, they were only surface manifestations of a much deeper issue. These privatised schemes – going by the name of PPP or PFI – were popular because policymakers had absorbed a fundamental belief that the private sector was more efficient.
This belief was unsurprising, given that one of the dominant narratives of recent decades has been that governments are inherently wasteful. Lacking competitive pressures or other strong incentives to respond to what people want, they spend money badly and – the argument runs – are actually incapable of achieving the social goals with which they are entrusted.
These questions about 'what works' can sound dull, but in fact they help determine a country's political direction. There is strong evidence, both locally and internationally, that people's views about the effectiveness of government profoundly shape the level of trust they have in it and how much they allow it to do in tackling major problems.
The narrative about government's ineffectiveness, of course, has been just as strong in New Zealand as in Britain and elsewhere. But is it true? Many people will have strong views either way. But often their views are based largely on anecdotes: Serco's failures with Mt Eden prison, for instance, or the weaknesses of some state schools. The plural of anecdote, though, is not data. You can't base a convincing argument on one-off examples.
What we need to do is look deeply at the evidence, drawing on peer-reviewed publications, official reports and summaries of the research to date, so that we can really determine what works. I've tried to present that evidence in an engaging way in my new book Government for The Public Good: The Surprising Science of Large-Scale Collective Action.
What I've found is that, although the picture is inevitably mixed and there have been some successful privatisations, by and large attempts to let the market provide services have been a failure. There are too many times, the evidence suggests, when it has not delivered the promised better services at lower prices. Deregulation and other market-friendly reforms have also performed poorly.
In contrast, public services delivered the classic way – based on democratic discussion, altruism and free delivery – have often outperformed their privatised equivalents. And regulation is often highly effective.
What this suggests is that, ten years on from a financial crisis that represented a colossal failure of markets, we should in fact trust government to do more in future, especially to tackle major collective problems such as climate change and the rise of the robots.
Government will of course have to be better still, if it is to fully deserve our trust. It needs to be more flexible, more responsive to the views of ordinary citizens, better able to plan for the future.
But all these things are possible – as I explain in my book. And I expect these questions to get more attention in coming years. The twenty-first century is full of complex challenges, and we have finite time and resources with which to address them. A renewal of government action for the public good is one of the most promising means to ensure we get through this century in the best possible shape.
Max Rashbrooke is a senior associate in the Institute for Governance and Policy Studies at Victoria University of Wellington, and the author of Government for the Public Good: The Surprising Science of Large-Scale Collective Action, published this week by Bridget Williams Books.
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