John FitzGerald: How do we strengthen public bodies to stand up to pressure?

A number of theories feature in the economics literature to explain how the public service operates. Some suggest public servants manoeuvre to maximise the budgets under their control, whereas others emphasise the possibility of their capture by special interests.

Neither of these perspectives accords well with my experience of more than 40 years working with the public service, a dozen of these spent in the Department of Finance. I have found that most public servants involved in policy formation are motivated by a sense of the public good, however they construe it.

Clare Leaver, of Oxford University, in an interesting article in the American Economic Review entitled "Bureaucratic Minimal Squawk Behaviour", draws on experience in the British National Health Service (NHS). She writes that those working in the NHS "report an intrinsic sense of vocation but also an extrinsic desire to protect their professional reputation".

Another study which had looked at the NHS concluded the concern for reputation means people try even harder not to make mistakes. However, Leaver’s paper develops a model showing the desire to avoid mistakes can produce inefficient outcomes when public servants are subjected to what she refers to as “squawks” by sectional interests.

She says able administrators will not bend to such pressure, but it takes strength to stand up to lobbying by interest groups and to pursue policies in the broad public interest.

Large companies often mount a strong lobby seeking to secure regulatory decisions to their advantage. However, consumers’ interests rarely have as loud a voice.

Our economic regulators in areas such as energy, telecoms and aviation have the job of representing the public interest and standing up to vociferous lobbying by those with business interests at stake. In telling their story to the media, sectional interests can achieve widespread public attention, especially where there is no effective countervailing lobby group representing other major but diverse interests, consumers in particular.

It is natural in the political process that politicians will pay considerable attention to points of view that receive wide coverage in the media. In so doing, they may be pushed into making decisions that benefit specific interests with loud voices. Regulators are paid to take the flak and, in the light of their statutory mandates and the best evidence available, press on in the public interest.

However, even independent public servants may find it difficult to resist the kind of strong lobbying that may result in adverse publicity that could affect their individual reputations.

Ultimately economic regulators are answerable to the Oireachtas, rather than the Government of the day. When they appear before Oireachtas committees, they have to justify the basis for their decisions and show they are fulfilling their mandate. In some cases, the focus of attention at such committees may be partly guided by outside interests lobbying through the media. This is something public servants in such a position have to be prepared to deal with.

Leaver considers a number of ways to strengthen public administration and the independence of public servants, especially public utility regulators, in the face of heightened lobbying.

These include lengthening terms of appointment of regulators so that day-to-day pressures weigh less heavily on decisions and there is less concern with the impact of decisions on the regulators’ reputations. She also suggests appointing mid-career professionals to short-term posts may involve individuals for whom personal reputation is particularly important while “appointment of older career civil servants” might, instead, strengthen the independence of regulators from sectional lobbies.

Either way, her research about the possibility that reputational concerns of public administrators may leave them open to pressure by lobby groups has implications for the public service as a whole.

Health service

While the need to withstand one-sided lobbying is particularly important for economic regulators, it is also relevant across broader areas of public policy.

In the health service, huge attention is being devoted to the number of patients on trolleys. While this happens every year in the winter, the problem, and the attention focused on it, has continued throughout this year.

Because this problem is easy to quantify, and the costs to individuals from the congestion in emergency departments is very easy to visualise, it is an area that receives considerable attention from policy makers in the health sector.

It is a very real problem, but it is not the only problem in the health service. Other areas merit both increased attention from policy makers and increased resources; however, they have to take second place to the trolley emergency. These include mental-health services, elder care and primary care.

In many cases the focus of attention on the immediate trolley problem and the need for quick fixes have made it difficult to solve some of the underlying problems which contribute to the pressures on emergency departments.

In the case of the trolley emergency, there is no lobby of companies pushing sectional interests. Instead, real people are suffering from the inadequacies of the service. However, because the reputations of the Minister and of the key policy makers in the health service are so caught up in the trolley problem, there is a serious danger that the other problems, affecting the welfare of very many citizens, will receive less attention.

In a world where resources for medical services are highly constrained, the need to prioritise remains crucial. Getting the priorities right when in the spotlight of publicity is no easy task. Clare Leaver's article in the American Economic Review is available at iti.ms/1MYX7aA. An earlier version is available at iti.ms/1MYX6Dx