Mariana Mazzucato and Rosie Collington - How the Consulting Industry Weakens Our Democracy
Mar 10, 2023
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Economist Mariana Mazzucato and collaborator Rosie Collington debunk the value of consultancies. They highlight failures in responding to challenges like climate change and COVID-19. They discuss the role of government, the drawbacks of excessive reliance on consultants, and the need for mission-oriented policy. They delve into historical context, aligning government actions with citizens' interests, and strengthening organizational capacity. They also address the impact of consulting firms in global health and the importance of transparency for driving change.
The consulting industry often fails to add value to the economy and lacks the necessary expertise and alignment with societal goals.
Consulting firms have strategically positioned themselves to benefit from economic and political change, often creating conflicts of interest.
Governments should invest in their internal capacity, foster collective intelligence, and pursue purpose-driven policies to address complex societal challenges.
Deep dives
The Big Con: Exposing the Consulting Industry
The podcast episode discusses 'The Big Con,' a new book by Mariana Mazzucato and Rosie Collington that exposes how the consulting industry weakens economists, businesses, and infantilizes governments. The authors argue that consultants have capitalized on the insecurity and lack of confidence within government institutions, offering their services to fill the capacity gaps. The discussion highlights the failures of the consulting industry during the COVID-19 pandemic, particularly in areas like Test and Trace, where consultants were highly involved but failed to achieve their objectives. The podcast explores the conflicts of interest within the consulting industry, showing how consulting firms often have connections to the private sector or other vested interests, compromising their objectivity and potentially undermining the public interest. The authors emphasize the need for governments to invest in their internal capacity and develop a purpose-driven approach, rather than relying heavily on consultants who may not have the necessary expertise or alignment with societal goals.
The Evolution of the Consulting Industry
The podcast traces the growth and influence of the consulting industry throughout history. It highlights how consultancies have strategically positioned themselves to offer services that align with prevailing trends in capitalism and government governance. The discussion points out that the consulting industry thrived in periods of economic and political change, such as the post-war era and the liberalization of financial markets in the 1980s. The episode also explores the conflicts of interest that arise when consultancies simultaneously provide auditing, consultancy, and outsourcing services. This integration allows them to benefit from interrelated contracts and navigate potential conflicts more easily, creating a systemic conflict of interest. The hosts discuss the need for transparency and accountability in government contracts to ensure that potential conflicts are disclosed and managed appropriately.
The Need for Smart Government and Collective Intelligence
The podcast emphasizes the importance of smart government and collective intelligence in addressing complex societal challenges. The authors argue that governments should focus on purpose-driven policies and collaborations that bring together various stakeholders, including the private sector, to solve problems collectively. They stress the need for governments to invest in their own capacity and expertise to foster confidence, innovation, and problem-solving. The discussion highlights the significance of outcomes-oriented procurement strategies that align with societal goals rather than solely pursuing efficiency or cost-cutting. The episode calls for a shift in the narrative around government, emphasizing its role in catalyzing societal change and driving well-directed transformations, rather than purely correcting market failures or enabling the private sector.
Solutions for Overcoming the Challenges
The podcast episode offers solutions for addressing the challenges posed by the consulting industry and building more effective governance systems. The hosts advocate for investments in civil service capacity and capability building to foster confidence and promote purpose-driven government. They highlight the importance of embedding transparency and accountability in government contracts, ensuring independent evaluations of consulting efficacy, and avoiding conflicts of interest. The episode suggests a granular approach to policy design that considers the nuances of different societal challenges and fosters collaborations between governments, private sector actors, and other stakeholders. The authors conclude by urging a reevaluation of the role and value of consultancy services and a focus on collective intelligence in addressing pressing global issues.
The Impact of the Two-Party Political System on Government
The podcast episode explores how the two-party political system contributes to the infantilization of government. It questions how a government can have a long-term view and effectively serve the public when it is heavily influenced by the rhythm and drama of elections. The importance of aligning government actions with citizens' interests is highlighted, emphasizing the need for democratic development and mission-oriented policy. The episode also discusses the success of public but not politicized organizations like DARPA in driving innovation.
The Role of Consulting Firms in Global Health and Beyond
The role of consulting firms, particularly in the field of global health, is examined in this podcast episode. It raises concerns about the influence of consultancy companies, their presence at international conferences, and their involvement in various sectors, highlighting potential conflicts of interest. The episode also explores the need for disclosure and transparency in consulting companies, mandating them to reveal their clients and conflicts of interest. However, it emphasizes that disclosure alone is not enough and calls for broader changes, such as reshaping the narratives around economy and competitiveness, empowering the civil service, and creating attractive career opportunities in the public sector.
In conversation with former Editorial Director of BBC News, Kamal Ahmed, world-renowned economist Mariana Mazzucato and her collaborator Rosie Collington expertly debunk the myth that consultancies always add value to the economy. Presenting a wealth of original research, they argue for investment and collective intelligence within all organizations and communities, and for a new system in which public and private sectors work innovatively for the common good.
