In political science, the term “state capture” describes situations where private interests monopolize public administration decision-making processes to hijack them for their own benefits. Many analysts believe that this phenomenon constitutes a form of institutional corruption widespread in advanced capitalist democracies, where the links between market and government are closely intertwined.
The influence of the fossil fuel industry on climate policies, of digital giants in the regulation of the Internet, of Big Pharma in health or of banks in the financial system are often cited as examples of the capture of public power by private interests. In all these cases, there is a strong information asymmetry between the State and the private sector: cutting-edge technological expertise is more advanced in industry than in the public service. This imbalance of knowledge translates into an imbalance of power, thus generating numerous conflicts between public interest and private interest.
David versus Goliath
It is a situation of this type that the Auditor General exposed in her audit of ArriveCAN. Consultants who had obtained the first contracts for the application without competition helped to formulate the criteria for awarding a contract which they subsequently won. The Canada Border Services Agency’s continued reliance on consultants has inflated enforcement costs. The Agency’s dependence on private consultants for information systems is far from unique. Federal spending in this area has more than doubled in recent years.
Last year, the Ministry of Immigration was also singled out for its repeated contracts with the firm McKinsey in the provision of digital services. We only have to mention Phénix, the payroll system purchased from IBM, to remember that Ottawa rarely has the upper hand when it comes to private expertise. The public service does not have equivalent IT or digital knowledge that is sufficiently robust to call into question the work of private specialists.
When consultants operate within government, the knowledge they acquire, which in principle is public property, becomes a private commodity that can then be resold to the public. Over time, this can create a vicious cycle that further widens the gap in specialized knowledge between government and industry.
Promote public service
But how to redress the balance? The public sector cannot compete with Silicon Valley wages. The industry is richer and will always be able to afford the best talent. This is why several decision-makers believe that it is necessary to substantially increase the salaries of public sector managers and imitate the bonuses paid to heads of private companies to attract top gun in public administration. You would have to pay salaries of a million or more like at Investissement Québec to get the best.
This belief, however, does not stand up to empirical analysis. People drawn to a career in public service never do it primarily for the money. Research shows that the correlation between job satisfaction and salary is tenuous. Salaries are important, but most people want work that makes them feel like they’re making a difference.
For young IT geniuses to come and rebalance the expertise between the State and industry and join the public administration, giving them salaries which follow the private sector but which will never be as competitive is not the solution. On the contrary, we must promote public service, which some see as a “vocation” which can sometimes lead to self-sacrifice, as courageous healthcare workers have shown during COVID. Public service does not interest people motivated by personal wealth, but rather by the desire to serve the general interest and the wish to have an impact on society.