Public Money & Management

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Editorial: Consultants and public management reforms

Matti Ylönen, Ringa Raudla & Hanna Kuusela

To cite this article: Matti Ylönen, Ringa Raudla & Hanna Kuusela (19 Dec 2024): Editorial:
Consultants and public management reforms, Public Money & Management, DOI:
10.1080/09540962.2024.2442209

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PUBLIC MONEY & MANAGEMENT
https://doi.org/10.1080/09540962.2024.2442209

Editorial: Consultants and public management reforms

Matti Ylönena, Ringa Raudla b
and Hanna Kuusela c

a
Faculty of Social Sciences, University of Helsinki, Finland. [email protected]; bRagnar Nurkse Department of Innovation and Governance,
Tallinn University of Technology, Tallinn, Estonia. [email protected]; cDepartment of Social Sciences and Philosophy, University of
Jyväskylä, Finland. [email protected]

Introduction international (for example Raudla, 2013; Seabrooke &

Sending, 2022). In national settings, the ensuing
Critical scholarship on consultancies in the public sector has
relationships have been discussed especially in the context
become a sprawling research field in the 2000s, and
of the New Public Management (NPM) reforms and their
especially in the past decade. However, the ubiquity of
long aftermath (for example Raudla et al., 2024; Sturdy et al.,
consultancy use across scales of analysis (from municipal to
2022; Ylönen & Kuusela, 2019). The critical scholarly
global) and across institutional borders (spanning different
attention to the mechanisms and impacts of the growing
organizational types) has also generated significant
role of consultants in public governance started coalescing
porousness to this research agenda. While notable currents
throughout the 1990s and the 2000s, evolving into a lively
of consultancy scholarship have been centred in certain
research agenda in the 2010s and the 2020s (Raudla et al.,
academic journals, this research field is characterized overall
2024).
by a great diversity in approaches, disciplinary
By accruing a range of cutting-edge contributions from
backgrounds, and research outlets. Such diversity is to be
scholars and practitioners alike, this PMM theme makes an
celebrated, but it also brings challenges for scholars seeking
important contribution to the debates on the public sector
to keep track of where this research agenda is heading, and
use of consultancies, and its impact on public governance.
which emergent phenomena are topical now. In this
We were motivated by a need to take a fresh look at
editorial to our Public Money & Management (PMM) theme
whether private consultancies contribute to public value
issue, we outline the ways in which this issue begins to
and, if yes, under what premises. To guide future
alleviate these challenges, while identifying important
governments’ policies on using consultants, we direly need
underlying currents in the diverse set of articles that
more systematic information about the advice provided by
constitute this PMM theme.
management (and other) consultants on public
management reforms; the processes of providing this
Public sector use of consultancies advice; and the interactions between processes and content.
Accordingly, we have probed into this theme with three
Recent years have seen recurring controversies revolving
overarching questions. First, how have consultants
around the role of major consultancy firms in public
influenced the direction of various public management
governance (Mazzucato & Collington, 2023). Australia, for
reforms (including reforms of budgeting, accounting, and
example, has been grappling with the aftermath of a scandal
financial management)? Second, under which circumstances
where tax consultancy and auditing firms—PwC in particular
do private sector consultants add value to public
—used their privileged access to the government to help
management reforms? And, third, what kinds of governance
their clients avoid tax obligations (Chenoweth & Tadros,
structures are needed for ensuring more meaningful
2023). The best-known and biggest management
involvement of consultants in public sector reforms? The
consultancy firm, McKinsey has, likewise, repeatedly found
articles in this theme issue tackle these questions from
itself in the headlines highlighting discrepancies between its
various angles, combining diverse viewpoints from
‘do-good’ self-posturing and its business conduct
scholarship and practice. Our PMM theme issue both lays
(Bogdanich & Forsythe, 2022; McDonald, 2014). Such
out synthesis of some of the overarching, interesting
tendencies have been discussed, for example in the
developments in this field, and points to a range of
‘consultocracy’ literature (Saint-Martin, 1998; Gunter et al.,
emerging consultancy-related phenomena in need of
2019; Ylönen & Kuusela, 2019) that has highlighted the
further research.
depth of consultancy-driven logics in public governance,
while also sparking notions of ‘McKinseyfication of
government’ (Ylönen & Kuusela, forthcoming).
Debating the pitfalls of public sector consulting
Scandals can act as important catalysts for informed public
discussion on the preferred roles of consultants, and the The academic literature on consultancies has been argued to
acceptable scope of their use, in shaping public governance. convey a relatively clear-cut distinction between functionalist
Yet, the headlines generated by consultancy-related and critical strands of research (Armbrüster, 2006). Within this
controversies eclipse a range of mundane, everyday dichotomy, functionalist research has typically adopted a
interactions between management consultancies and the more practice-oriented focus and introduced lists or
public sector in various settings, from national to typologies of consultancy use, but with limited analytical
© 2024 Informa UK Limited, trading as Taylor & Francis Group
2 M. YLÖNEN ET AL.

grounding. Critical scholarship, in turn, has adopted a more consultancy use through a systematic review article written
systemic and societal lens, focusing on opportunistic by the editors (Raudla et al., 2024). This article assesses the
tendencies in consultancy use, and their impacts on the existing literature in the field, outlining the state-of-the-art
practices and ideals of public governance and democracy knowledge on the influence of private sector management
(ibid.). While the recent wave of multi-faceted consultancy consultants on public management reforms. Our aim in this
scholarship in social sciences has made this dichotomy article is to help scholars and public managers to better
somewhat redundant (Raudla et al., 2024), there is still navigate the diversity of disciplines, approaches and
ample room to further bridge this divide. research outlets involved in the critical consultancy
One avenue for helping to connect functionalist and scholarship.
critical consultancy scholarship is to facilitate intersections This stock-taking provides a segue to the rest of the
between academic and policy fields. Through such research articles in this PMM theme. Three of them probe
interactions, we can foster insights that draw from timely, into the hiring processes of consultancies from various
policy-relevant (self-)understanding of practitioners, who viewpoints—effectively providing a highly policy-relevant
adopt a critical, analytical lens on consultancies and their 360-degree view of dynamics involving the procurement
impacts. Accordingly, our PMM theme commences with and use of external (or internal) consultants. The first of
three debate articles from authors with extensive these articles departs from the notion that we know
backgrounds in policy-making, the private sector, and relatively little about how to create best practices for
academic research. In the first of these three contributions, procuring consultancies, especially regarding qualities that
Christensen et al. (2024) outline three fields in need of go beyond the standards typically associated with public
further exploration and theorization regarding the public procurement (such as competitive bidding process).
sector use of consultancies. These fields relate to the factors Accordingly, in their pioneering article, Zaman et al. (2024)
behind client heterogeneity; the number of consultancies compare and assess the recent attempts by the UK, Canada
per client; and the dynamics of relations between client, and Australia to improve the quality of consultants’ advice,
entities within the client organization, consultancy and to avoid conflicts of interest by novel regulations of the
members and consultancy managers. supply-side of consulting. Such initiatives are much needed
The two other debate articles in our theme continue as practical alternatives to situations where various path
probing into the last of these three dynamics by dependencies in the public sector facilitate a continuing
illuminating two distinct ‘dark sides’ of public sector use of consultancies.
consulting. In his contribution, Valletti (2024) reflects the Subsequently, in their article, Douglas and Overmans (2024)
differences between academic research and lobbying turn attention to the hiring practices that guide consultancy
through his past role as the highly influential Chief use, and the potential cognitive biases of civil servants in such
Competition Economist of the European Commission. processes. Delineating and studying such cognitive biases
Through case studies that involve influential research that provides an important workplace-level addition to existing
intersected with Valletti’s former role, he documents the analyses and narratives that often highlight the more
various ways in which powerful corporate interests try to systemic and structural aspects of increasing consultancy use
undermine and silence facts and analyses that threaten (related to, for example, various NPM and post-NPM reforms).
their business interests. Valletti’s weighty contribution acts Complementing the contribution by Zaman et al., this article
as an important reminder that the division lines between will also help civil servants to make better-informed decisions
consulting and corporate advocacy are sometimes less clear in their consultancy use.
than commonly perceived (see Raitasuo & Ylönen, 2022). In Sturdy et al. (2024) discuss how consultancies themselves
addition to delineating corporate advocacy tactics, Valletti’s can contribute to being more relevant for their public sector
article provides important notions on how to better protect clients. The authors argue that systemic problems with
oneself against such outbursts during the research and consulting can be traced back to the reward and value
writing process. This constitutes important advice— systems associated with consulting work, which contribute
especially for younger academics and policy-makers. to a lack of openness of consultants and their clients. To
In our final debate article, Christensen (2024) discusses the alleviate this problem, the authors highlight the importance
risks of regulatory capture of powerful business interests of generating conditions for greater transparency
through the help of consultancy firms. With a background throughout consultancy processes and their procurement.
as the co-founder of the Tax Justice Network and the The remaining research articles in this theme issue
former economic advisor to the States of Jersey, examine the effects of private consultants on public sector
Christensen zooms into the political and societal power of developments in four different sectors: financial
consultants especially in the realm of tax policy. This management, digital transformation, tax administration, and
inquiry, in turn, draws attention to major tax and auditing education.
consultancies. Christensen’s important contribution First, van Helden et al. (2024) explore how values influence
complements the growing scholarship on McKinsey and consultants’ advice on public sector financial management.
other major management consultancies, which typically Importantly, their article highlights how consultants not
attract more attention in the critical social scientific only introduce and mainstream particular values into the
literature on consultants than tax consultancies. public sector (such as ideals associated with NPM) but are
sometimes themselves influenced by the distinct values and
characteristics of the public sector. The authors find salient
Pushing the boundaries of consultancy research
distinctions between the types of firms in their stances
The seven research articles in our theme issue commence toward private versus public sector values in public sector
with a stock-take of the scholarship on public sector financial management. Major international consultancies are
 PUBLIC MONEY & MANAGEMENT 3

more inclined to embrace private sector values—and hence Finally, the theme includes a new conceptual opening by
more likely to promote accrual accounting and outcome Zaki et al. (2024), who adopt an epistemic learning
budgeting—in their advice than smaller, national perspective to assess how consultancy use may lead into
consulting firms. Furthermore, the authors provide public value destruction in governance. The authors argue
signposts for both consultants and the public sector that failures in outsourcing work in public governance can
representatives who hire them to reflect which kinds of lead to organizational and societal public value destruction.
values about public sector consultants bring into the To mitigate this risk, the authors call for distinguishing
assignments. between cases where value destruction occurs non-
Second, delving into the role of private consultants in deliberately from situations where it arises deliberately,
fostering public sector digital transformation, Machljankin through value destruction by commission. Understanding
et al. (2024) probe into the type of relationship between the dynamics that may lead into these two outcomes can
external management consultants and public managers. better help policy-makers to avoid such pitfalls.
They assess how these relationships influence the success Collectively, the debate, research and new development
of digital transformation projects at the local level. Drawing articles in this PMM theme issue provide a timely collection
on a comparative case study of seven local government of policy-relevant research that can help academics and
consulting projects in Switzerland, they demonstrate that policy-makers alike to better understand—and further
trust-based collaboration between consultants and local develop—the practices and patterns of consultancy use,
governments is necessary (though not sufficient) for as well as to identify emerging phenomena and shifting
guaranteeing project success in the long term. (self-)conceptions and service portfolios of various consultancy
In the final research article in our PMM theme, Shore firms in this rapidly evolving field. Simultaneously, they also
(2024) returns the discussion to two important points that point to crucial directions where the consultancy field might
Valletti and Christensen tackled. First, this contribution be heading and which the associated scholarship must tackle,
focuses on the contested relationships between academic related both to the institutionalization and significant change
research and consultancy-driven knowledge production in public sector consulting, as discussed below.
and, second, it does this while highlighting the growing First, it is sobering to note that the expansion of the role of
role of the ‘Big Four’ auditing and tax consultancies in consultants in the public sector began already in the 1980s–
higher education. Shore shows how these firms have 1990s, i.e. several decades ago (Ylönen & Kuusela, 2019). Even
promoted marketization and privatization in higher if consultants often like to portray themselves as ‘change
education, locking in far-reaching, managerialist changes agents’, and even if scholars also often highlight the
that run against the traditional ethos of public education. disruptive roles of consultants in public agencies, this
Shore frames his article as a warning sign for policy-makers, disruption has often become highly institutionalized as a
who should ‘beware the free-market fantasies and self- recurrent pattern in public governance. Acknowledging this
serving scenarios that these consultancy firms advocate’. fact points to the need to develop blueprints and solutions
for policy-makers who either want to manage this
uncertainty, or to develop genuine alternatives for it.
Looking forward
Importantly, such solutions should be fit for the governance
Our theme issue concludes with three forward-looking new challenges of the 2020s and beyond. Developing such
development articles that trace highly topical emerging visions is hugely important in an era when democratic
empirical and conceptual dynamics that currently shape the forms of governance are not only potentially weakened by
consultancy field. managerialist modes of governance, but also by growing
This last section commences with an article by Christensen lure of autocratic forms of governance globally.
and Collington (2024). Like Shore, they discuss the political Second, such long-term institutionalization and continuity
impact of the Big Four auditing and tax consultancies but of consultancy use in public governance is challenged by the
Christensen’s and Collington’s focus is on climate consulting. widespread disruption of our economies and societies—
This rapidly growing area has attracted a range of together with their underlying infrastructures—by
consultancy houses—from McKinsey and PwC to ‘pure play’ cascading, persistent crises that have been labelled as the
climate consultancies—to develop new approaches for ‘polycrisis’ (Henig & Knight, 2023). These intertwined crises
measuring, assessing, and steering measures that aim to are characterized by resurging environmental and military
foster climate change mitigation and adaptation. Christensen threats, together with associated dynamics of ‘weaponized
and Collington typologize climate consulting actors and interdependence’ (Farrell & Newman, 2019) and the rapid
critically assess their influence in the public sector. They also concentration and (re)distribution of power in the control
discuss how climate consulting affects the governmental of the digital sphere (Acemoglu & Johnson, 2023; Bradford,
policy space, knowledge production and, more broadly, the 2023; Lehdonvirta, 2022). The articles in this collection have
consulting industry—pointing to important research gaps highlighted some of the opportunities that such tendencies
and suggesting avenues for further research. have created for consultancies, for example in climate
Bortz (2024), in turn, outlines and analyses emerging change mitigation. Yet, much work remains to be done in
responses to the persistent risks of outsourcing public the mapping, analysing, and providing actionable policies
governance work and associated knowledge base through to govern and steer these emerging consultancy fields. This
the experimental field of public sector in-house poses both significant challenges and opportunities for the
consultancies. Bortz addresses such themes through a case critical scholarship in this field.
study of the novel Australian Government Consulting (AGC) We conclude by highlighting three topics that scholars can
unit, analysing its functions in Australian public governance investigate when probing into such emerging areas of
and discussing its prospects of success. consultancy use, and their relationships with the long-term
4 M. YLÖNEN ET AL.

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Matti Ylönen would like to acknowledge support from the Academy of Seabrooke, L., & Sending, O. J. (2022). Consultancies in public
Finland, grant number 361765. The work of Ringa Raudla was administration. Public Administration, 100(3), 457–471.
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Valletti, T. (2024). Debate: ‘Doubt is their product’—The difference Matti Ylönen is an Academy of Finland Research Fellow at
between research and academic lobbying. Public Money & University of Helsinki, on leave from his position as
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University Lecturer in World Politics there. He has published
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values driving consultants in public sector financial management extensively on the political impact of consultants and other
advice? Public Money & Management, https://doi.org/10.1080/ forms of corporate power in global political economy.
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Ylönen, M., & Kuusela, H. (2019). Consultocracy and its discontents: A Ringa Raudla is Professor of Fiscal Governance at Ragnar
critical typology and a call for a research agenda. Governance, 32(2),
Nurkse Department of Innovation and Governance, Tallinn
241–258.
Ylönen, M., & Kuusela, H. (forthcoming). McKinseyfication of government. University of Technology, Estonia. Her main research
In C. Greve, G. Hodge, & E. Reeves (Eds.), Research handbook on interests are fiscal policy, public budgeting, public
privatisation. Edward Elgar. management reforms and institutional economics.
Zaki, B. L., Suykens, B., & Catala, I. (2024). New development:
Understanding the relationship between public sector consulting
Hanna Kuusela is an Associate Professor of Sociology at the
and public value destruction—An epistemic learning perspective.
Public Money & Management, https://doi.org/10.1080/09540962. University of Jyväskylä, Finland, working in the intersection
2024.2343806 of culture and economy. Her research interests include
Zaman, S., Howlett, M., & Migone, A. (2024). From demand-side to supply- economic elites, cultural analysis of capital, consultocracy
side regulation of government consultants: Recent trends in three and the role of private actors in public organizations such
OECD countries. Public Money & Management, https://doi.org/10.
as universities.
1080/09540962.2023.2297741