By Eric Crampton 06/12/2016


If outgoing Prime Minister John Key has any influence over the choices, and if Bill English wants the job, I expect English will succeed Key as Prime Minister and Steven Joyce will move to the Finance portfolio.

More than anybody else in government, as best I’ve been able to tell, Bill English thinks in terms of incentives and institutions. He sees the long game in changing structures to get better policy outcomes. And I have only ever heard him talk about that long game in terms of policy outcomes, not politics.

As Finance Minister, English’s vision was clear. He wants government spending to be effective. This isn’t bean-counting stuff, it’s about wanting that outcomes actually improve because of policy and spending decisions. And he wants the institutions to be in place to provide the incentives for that to happen.

English’s enthusiasm for Statistics New Zealand’s Integrated Data Infrastructure was built on using it to figure out where government spending is working to improve outcomes, where it isn’t, and setting up the mechanisms so we can distinguish between those. I remember his visit to Canterbury University beseeching us to use the IDI to help him figure out where the government does well, and where it could improve.

At the Victoria University School of Government awards ceremony a couple of weeks ago, English also highlighted the importance of institutions. He there, and this is my paraphrase, said that policy graduates need to think beyond the shift from inputs and outputs to outcomes, although that’s important too, but rather towards the incentives that lead to those outcomes, and the institutions that shape the incentives. He noted that he has a lot more time for “these are the institutional features leading to bad policy leading to bad outcomes” thinking than for “here are bad outcomes, change this policy to get better outcomes”.

As Prime Minister, English would be in a better, and worse, position to promote and execute that vision. On the plus side, he will be better placed to make the changes necessary. I expect he might take a harder line in Cabinet if RISes fail to meet the necessary standard, and ultimately bureau willingness to supply those depends on bad ones being batted back by Cabinet. And there are tweaks that could make IDI work better.

But on the downside, he’ll need Treasury working well for in order to implement the investment approach, and he wouldn’t be the Minister to which Treasury reports any longer. That will matter too.

Featured image: Keith Ng / Flickr