The Provision of strategic advice to government

Abstract

This paper examines the extent to which policy agencies in the New Zealand state sector have the incentive and scope to provide policy advice to the Government which addresses the Government's overall policy strategy, rather than particular elements of it. Tensions between technical and administrative concerns on the one hand and political considerations on the other are seen to underlie the demand for strategic policy advice. Drawing on a new institutional economics model of agency behaviour, it is suggested that the incentive and scope that agencies have to look beyond the current priorities and policy preferences of the Government, and to consider issues of policy cohesiveness, will vary depending on the proportion that policy advice forms of the agency's business, the size of the agency's policy budget, and the degree of volatility in the policy environment. A survey of the current experience of policy agencies in practice provides support for this model. The paper closes with an examination of various options for structural change, in terms of the emphasis that is placed on technical and administrative concerns or political considerations, and their likely effect on the provision of strategic advice. This draws on experience with different structural arrangements in New Zealand and in other countries, and from discussion with officials in key policy and government management areas in the New Zealand state sector. Overall, although the current framework is generally seen to accommodate the inherent tensions well, there may be merit in consideration of some amalgamation of agencies to improve aspects of policy cohesion, and in the further use of nondepartmental commissions.