From demand-side to supply-side regulation of government consultants: Recent trends in three OECD countries

Both practitioners and academics now grapple with concerns raised in legislatures and the media surrounding the use of consultants in the public sector. Issues around declines in public service capacity and conflict of interest have featured prominently in these concerns, along with value-for-money considerations. The relationship between consultants and government purchasers has mainly been governed through demand-side regulation designed to control government purchasing behaviour, including greater transparency and monitoring of contracts. While the USA has prohibited the use of consultants for 'inherently governmental functions', countries like the UK, Canada, and Australia have also aimed to create a more robust system of regulation by improving the quality of the advice, and avoiding conflict of interest through regulating the supply-side of consulting. This article discusses the recent moves adopted by these countries along this regulation trajectory, including implementing limits on the 'revolving door' of ex-government members transmuting into consultants immediately after leaving office, and proposals to replace the current weak certification of consultants with stronger forms of professional self-regulation and licensing. Governments across the globe have progressively expanded their use of external consultants not only to help design and deliver public services or re-organize service delivery but also, increasingly, to advise on policy. These practices have raised concerns about the impact of unchecked use of external consultants both within the traditional public service bureaucracies and in policy-making in general. Recent elections in France and scandals in Australia and elsewhere have turned on the payments made, and tasks allocated, to a relatively small group of large consultancy firms. This article examines these developments and the moves being made in several countries to curb or regulate the activities of this hitherto largely un-regulated industry. Examining recent moves in this direction in Canada, the UK, and Australia, the article argues that governments are increasingly turning to supply-side measures designed to ensure the quality-of-service provision, a move that is necessary to complement existing controls on demand-side activities in governments although these too remain an 'incomplete' hallmark of earlier reform efforts.