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Policy Analysis and Bureaucratic Capacity:

Context, Competencies, and Strategies

Evert A. Lindquist and James A. Desveaux

September 26, 2005

Introduction

The policy literature has done a good job of delineating the full array of possibilities for where policy-related work can be undertaken inside and outside public sector bureaucracies. Marcus Hollander and Michael Prince (1993) have shown that many kinds of analytic work are undertaken in different parts of public service bureaucracies in addition to the work of policy units: research, policy, planning, evaluation, auditing, operational reviews, quality assurance, financial analysis, management consulting, and information systems. John Halligan (1996) reviewed the many different sources of policy advice from inside and outside government, which includes internal expertise, other government departments, other governments, consultants, interest groups, think tanks, and universities. Jonathan Boston (1994) explored issues in “purchasing” policy advice, evaluating whether internal and external markets could be created to compete for the policy work of departments. As Jon Pierre (1996) observed, there has emerged a “public market” for the provision of policy advice.

In delineating these possibilities, however, too much emphasis has been placed on the options available to policy mangers and too little on evaluating the advantages, disadvantages, and fit of strategies for mobilizing capacity needed to properly direct and staff policy units in government agencies. Casting the policy advice function as a spot market, where analysis is “purchased” on demand, risks ignoring the critical issue of whether public service institutions adopt the best strategies for securing policy analysis to achieve the short-term objectives of advising governments and ensuring the longer-term advisory capabilities of the public service are robust.

This chapter sets out a conceptual framework for evaluating different approaches to mobilizing policy expertise. We begin by identifying the different locations where policy analysis is conducted in the public service institutions and where policy expertise is sought from inside and outside government. We delineate the objectives that might inform the recruitment of expertise in policy units, making a broad distinction between the knowledge required to inform policy analysis and the qualities managers need to ensure that policy “teams” reach full potential. We identify three recruitment strategies available to departments and policy units:

  • in-house systems that rely on attracting talent from outside the public service at the early stage of careers or from other parts of a department, and then developing and promoting that talent over time;
  • internal policy think tank systems that are premised on lateral movement for developing the skills of policy analysts and rely on regular rotation of staff at all levels of the policy unit, drawing on expertise from other parts of the public service; and
  • consulting strategies that rely heavily on a small core of staff to serve as brokers of the work of external free agents, which includes analysts working for consulting firms, think tanks, universities, or as independent contractors.

Each strategy has its own benefits, costs and risks. No strategy is superior to the others in all circumstances; the effectiveness of a recruitment strategy is highly contingent on the workflow patterns of policy units and the required mix of generalist and specialist expertise, and on the political and policy challenges confronting a department or program area. Each strategy has differing capabilities for responding to error or evolving political demands, and for promoting creativity and knowledge capture. Managers and observers should carefully evaluate the costs of adopting one strategy at the expense of others, but each strategy requires astute management and the retention of “rare talent” if it is to succeed.

We conclude by identifying general lessons and probe the implications for improving the policy function at the system level. First, leaders may want to establish a centre of excellence dedicated to developing and deploying specialized and rare talent within the system. Second, rare talent must be retained within the public service in order to build trust, deepen linkages, and make them sufficiently interesting to warrant the participation of the best experts at think tanks, universities and consulting firms. Third, we warn that attempts by governments to shift responsibilities for the conduct of policy analysis outside the public service are not likely to succeed if the primary rationale is to lower costs. Finally, we suggest a program of research that should yield useful results for practitioners and academic observers alike.

The Institutional Setting for Policy Analysis

Policy-oriented units are distributed across public service institutions, which are complex bureaucratic systems serving duly elected governments. Before considering what types and sources of expertise are sought out to undertake policy analysis and related activities (supply), we need to understand the diverse locations and general rationale for acquiring it (demand).

The Demand for Policy Expertise

Policy analysis proceeds at several levels inside a public service, even if the ultimate consumers are deputy ministers seeking to best serve ministers as individuals and as a collectivity. The immediate demand for policy expertise will emanate from the following locations:

  • corporate policy units. These units are usually headed by an assistant deputy minister, and report directly to the deputy minister. Their work typically spans not only the full range of department programs but also the range of issues encompassed by the ministerial portfolio. Due to their proximity to the minister’s office and the deputy minister’s office, these units are often involved with communications, consultation, and intergovernmental matters, but should not be confused with corporate services divisions.
  • sectoral policy units. Attached to program sectors in operating departments, these units are usually led by directors or director generals. Their expertise is closely aligned with the programs encompassed by the sector. They are more likely to conduct detailed policy analyses and program evaluations, and maintain pertinent data streams. Accordingly, they tend to have more technical knowledge than corporate policy units, although sectoral units do prepare strategic plans, Cabinet documents, and communications materials.
  • central agency bureaus. Cabinet offices, as well as finance departments and management boards, have teams of analysts responsible for monitoring and liaising with operating departments on policy and other matters, and sometimes take on design responsibilities. Ordinarily, they challenge, facilitate, and coordinate department proposals, in preparation for consideration by ministers and cabinet committees.
  • functional policy community. The horizontal nature of many issues means that public service leaders increasingly view policy analysts and their managers as a corporate resource and functional community (Canada, 1995). In other words, they are less inclined to see either new or established policy analysts as the “property” of a given policy unit and more disposed to see them as a system resource.

The list of locations in which “policy work” gets conducted could be expanded, but for the purpose of exploring the costs and benefits of different recruitment strategies, it is sufficient to deal with those listed above. Each location (see Chart 1) presents a different level of analysis and vantage point for considering what skills and knowledge need to be emphasized for undertaking policy analysis in a public service, and each had different recruitment needs and opportunities.

-- insert Chart 1 about here --

The Supply of Policy Expertise

If corporate policy units, program policy units, central bureaus, and the functional policy community comprise the “demand side”, where do governments obtain policy expertise? Here, we consider where policy managers in all of those locations might seek pertinent expertise, in addition to staff already in place, to deal with short term and longer term needs. They include:

  • operations divisions. Many policy analysts begin their public service careers by working in operational units delivering or supporting programs for departments. They may have been scientists, engineers, IT specialists, or clerks – to name just a few possibilities. Such individuals are valuable to policy units precisely because they are familiar with how programs are delivered and have an acute sense of how policies get translated into services. They may upgrade key policy skills, either through government training opportunities or their own initiative, but this can also transpire “on the job.”
  • sectoral policy units. Many operating departments have several sectoral or program-based policy units depending on its size and number of programs it administers. While senior analysts are not responsible for developing a corporate view on policy matters, they often directly brief deputy ministers and ministers because they know the most about certain programs. These analysts are strong candidates to become program or portfolio analysts in central agencies, and very promising analysts may move to a department’s corporate policy shop since such units should have expertise spanning the programs comprising the ministerial portfolio.
  • corporate policy units. The responsibilities and depth of expertise housed in corporate policy units will vary according to how the deputy minister structures a department. Some corporate units are analytic powerhouses, containing the most talented policy experts in the department for all program areas. At the other extreme, corporate units may oversee, liaise and coordinate the work of sectoral policy units; even if the "experts" are in the latter locations. In all instances, though, corporate policy units should have a department-wide and a portfolio-wide view of priorities and issues, and the capacity to respond to the immediate needs of the minister and the deputy minister, and to monitor and move forward issues throughout the system (which includes working with other departments and central agencies, and supporting cabinet decision-making). Experienced analysts in these units are attractive to departments grappling with similar challenges, or to central agencies seeking talent to manage interdepartmental issues across portfolios.
  • central agency bureaus. Policy analysts in central agencies may not possess the detailed knowledge of programs as analysts working in departments, but they should have a broad understanding of the operational and strategic challenges of departments. They have a good sense of how the cabinet decision-making system works and a corporate view of how policy matters are handled across departments and central agencies. Thus, it is this system expertise as well as a central agency perspective on a department or particular programs that may be highly valued by corporate and sectoral policy shops in operating departments and by other central agencies.
  • outside experts. Analytic expertise can be recruited from consulting firms (boutique or integrated), independent consultants, or academics. Individuals or teams can be hired by the government for specific projects or they may work on retainer, a longer term contractual arrangement. There are three reasons for hiring outsiders for policy work: 1) to handle tasks for the department or on overload basis; 2) to tap into expertise that is either not available inside the public service or not available on a full-time basis; and 3) to undertake tasks the government believes should be fully contracted out.
  • specialist recruitment programs. Some governments sponsor public-service-wide or department-specific “fast-track” programs to attract talent for policy and management positions. Assignments often involve policy analysis responsibilities, and many of the candidates aspire to policy as opposed to purely management careers. The assignments are negotiated by the candidate, central agencies, and departments, and at the end of the program, they must compete for more permanent positions.[1]

A final source of expertise cuts across those previously mentioned: many public service institutions support exchanges (e.g., Interchange Canada). Staff can take positions in the private sector or with other governments on a temporary basis. Sometimes these arrangements involve a “swap”, with staff from participating organizations exchange positions. In other cases it might involve only one person. Furthermore, this approach can be used within the public service to move staff across departmental or functional divides to broaden horizons and develop skills.

Competencies for Well-Performing Policy Units

Policy analysis is often thought of as a generic activity, but addressing complex issues in large public sector bureaucratic systems requires assembling a multitude of skills and expertise, and the right coordinating capabilities. Moreover, although it is tempting to see the mobilization of expertise as tapping into a “spot market”, it is intimately connected to recruitment dedicated to building short-term and longer term capabilities. In what follows we identify the kinds of skills and competencies that policy managers need to assemble in their units in varying degrees.

Identifying the institutional bases for the supply and the demand of policy expertise is one matter, but it is equally important to understand the features of well-performing policy organizations in a public service context. Several features have to do with the expertise, information, and norms that ought to be on tap in the policy unit. They include:

  • specialized policy knowledge. Policy units should have on tap sufficient expertise on the specific technical issues pertinent to its domain of responsibility (Desveaux, 1995). The goal here would be to ensure that the unit cannot be challenged on technical details. This imperative will vary according to whether the policy shop is located in a departmental program sector, at the departmental corporate level, or in a central agency.
  • access to data streams. The quality of policy analysis is significantly affected by the quality of data available to analysts (Lindquist, 1988). Policy units need to either generate their own streams of data or access to needed data. To the extent that a policy unit has a monopoly over pertinent streams of data, it has a competitive advantage over other units in the system.
  • generalized policy knowledge. Specialized expertise and access to good data streams are necessary but not sufficient conditions. Capabilities must exist to develop broader views on policy issues, to identify horizontal linkages across issues, and sometimes to develop more comprehensive as opposed to selective policy initiatives. This requires the capacity to coordinate the work of more specialized analysts and producers of data (Desveaux, 1995).
  • system knowledge. Policy units may have specialized and generalist policy expertise which is complemented by good data flows, but they must also have the capacity to work with other units and other departments, and to move ideas and conclusions through the larger public service and cabinet decision-making system. This requires employing officials who can be effective boundary-spanners, who can “work the system” inside and outside departments (Desveaux, Lindquist, and Toner, 1993).
  • process skills. Policy units do not only design policy, they have to manage consultations with citizens, handle communications and convey information to the public, and oversee negotiations with other departments, governments, and sectors. The ability to anticipate and deal with process issues is increasingly important in modern policy environments (Meyer, Van Daalen, and Bots, 2001; Howlett and Lindquist, 2004).
  • public service norms. Cutting across these desired competencies is a more fundamental requirement, one that is often taken for granted inside central agencies and departments, and that is the need to protect and preserve public service norms such as probity, loyalty, cabinet confidences, discretion, anonymity, and the like.

The balance struck among these different competencies will vary according to where a policy unit is located in the public service. For example, as we move from a sector policy unit to a department’s corporate policy shop to a central agency unit, the balance between technical expertise/data flows and system knowledge should shift accordingly, and the need for generalized policy knowledge is probably higher in the leadership of sector units, among all staff in corporate units, and certainly among central agency analysts.

Some additional distinctions are in order. In thinking about the kinds of skills and knowledge that is demanded by organizations and supplied by individuals, we find it useful to think in terms of three kinds of expertise: generalist, specialist, and rare talent. By generalist expertise, we mean people with skills, competencies and learning capabilities who can take up new tasks with a reasonably short period of time. By specialist expertise, we mean people who have reasonably deep understanding of a field or mastery of a set of technical skills, which requires a longer term investment in training. By “rare talent” we mean people who are the acknowledged experts in the field, and at the top of their fields.[2] All three kinds of expertise (see Chart 2) can be found inside and outside the public service.