The oxymoron of 'smart active government'

"[L]ast month [MBIE and MFAT issued a draft report asking] ‘How can we accelerate the growth of high productivity activities in the New Zealand.’ …

"It was the ‘accelerate the growth of high productivity activities’ that prompted me to look a little further: the focus apparently was not economy-wide productivity and policy settings but the sort of ‘smart active government’ stuff MBIE has long championed, involving clever officials and politicians identifying specific sectors to focus on and specific interventions to help those sectors. …

"On a day when the dysfunctions of our public sector were on particularly gruesome display it seemed even less appealing and persuasive than usual. In a month when the government had been a) buying a rugby league game, b) increasing (again) film subsidies, and c) subsidising expensive New Zealand restaurants (via the Michelin corporate welfare), all in the name apparently of 'going for growth. …

"[T]he draft report is unlikely to be any use to anyone looking for illumination rather than support (the old two uses of a lamppost line). … [T]here is a list of types of interventions that have been or are being used in [other] countries but no effort at all to assess what role (positive or negative) these interventions have played in contributing to medium-term productivity growth. It certainly isn’t impossible that some might have been helpful, some will almost certainly have been harmful …, and perhaps many will have just been ornamental or redistributive …  

"N]ot once in the entire document is there any suggestion of the possibility of government failure, capture etc.

"Then the draft report moves on to four domestic case studies … None of it seems to display any scepticism, only a sense that we (governments) haven’t been sufficiently focused or willing to persist with particular sector supports. … And the whole document ends with a question that shouldn’t even be being asked by government departments: ‘How might we identify higher productivity and growth potential?’ …

"[T]heir mindset and fairly shallow analysis in documents like this helps provide cover for governments more ready to paper over symptoms, toss out some cash to favoured firms/sectors, and avoid insisting that the hard structural issues are identified and addressed).

"[Yet] this sort of stuff helps keep lots of officials busy and feeling useful."

~ Michael Reddell from his post 'Government departments championing…bigger roles for themselves'