The Canadian government has faced more and more scandals involving private sector consultants over the last decade. From the costly Phoenix pay system debacle that left federal public servants without reliable pay cheques for years, to the corrupt contracting practices behind the faulty, pandemic-era ArriveCAN app, problematic consultants have been behind these efforts to cut corners at tremendous cost. Rather than focus on serving the public through public services, the private sector has taken over to make massive profits at the cost of public trust and tax dollars.
In The Consulting Trap: How Professional Service Firms Hook Governments and Undermine Democracy, authors Chris Hurl and Leah B. Warner track the malpractices brought on by “transnational public service firms” (TPSFs); the longhand name for ‘professional’ service firms at the crossroads of consulting, auditing, and Information Technology services. Hurl and Warner show how companies like McKinsey, Deloitte, and KPMG, “have popularized dubious financial models and metrics that legitimize the high costs of privately financed infrastructures.” In other words, private consultants have played a role in enriching the powerful through cuts and corruption, all while deskilling civil servants, eroding democratic institutions, and weakening public services. The Consulting Trap’s case studies demonstrate how the nebulous global consulting industry has subsumed itself within the public sectors of advanced industrial economies, and why we are left with malfunctioning public services at higher costs.
Hurl and Warner point out that while Canada may not be the biggest site for TPSF exploits, the country has a long history of employing the consulting industry. Tracing the roots of private sector consultants back to a 1911 monograph written by American engineer Frederick Taylor entitled The Principles of Scientific Management, Hurl and Warner illustrate how the approach developed in this era of industrialization sought a re-orientation of the public service, “and enable[d] the objective assessment of civil servants based on their merit.” Over the course of the 20th century, “scientific management” came to develop modern day technocracy, where more sophisticated expansions of the theory were employed by TPSFs, “to hard-wire neoliberal operating systems into the state,” by the 1980s and 90s. Completing the technocratic transformation by the first quarter of the 21st century, “these firms have assumed control over the core hardware of governance,” Hurl and Warner argue, creating feeble public sectors in most major Western democracies.
In Canada, the fingerprints of TPSFs can be found at all levels of governance. While primarily detailing the disaster of the federal Phoenix pay system, Hurl and Warner also examine provinces that have fallen into the “consulting trap” by way of right-wing governments. Looking back at Mike Harris’s Progressive Conservative government in Ontario through the late 1990s and early 2000s, the authors detail how the province became the first North American administration to measure “performance” over its municipal administrations, “requiring that they publicly disclose standardized information,” on public service performance. Once Ontario outsourced these mechanisms of public administration to TPSFs, the Harris government began to pay out, “millions of dollars in contracts that assess municipal services,” and continued to do so among successor provincial regimes.
Obscurity is largely how these practices escape the eyes of the public sphere, and have proliferated in Canada’s various levels of administration. As Ontario’s public sector unions such as the Association of Management, Administrative and Professional Crown Employees of Ontario (AMAPCEO) asked in 2023, “How much does Ontario pay for IT consultants? Whoever knows this number is not sharing it with the public.” The authors also highlight Prime Minister Justin Trudeau’s own close ties to TPSFs, who form something of a “shadow government” that spends public money on opaque initiatives. There have been some attempts to open up public scrutiny into this industry; a simple visit to the search function of the Open Canada portal demonstrates just how much public money is being spent on consultant contracts. Still, these data points are just the tip of the iceberg. According to experts within the federal public service, “it’s hard to tell, from the publicly available data, what a given contract was for.”
The Consulting Trap also puts Canada into the greater Anglo-political economy context, examining the private consulting industries in both the United States and United Kingdom. In particular, the UK provides an interesting case study of how the management industry morphed into a product of global neoliberalism. In the aftermath of the Second World War, the US exported consulting science to Europe alongside the American-led Marshall Plan aid packages. The UK, with a more similar political economy to the US compared to Continental Europe given their common historical origins, became a testing grounds for these firms before embedding themselves in European democracies. Throughout the latter 20th century, exchanges in personnel between TPSFs and centre-right governments across the Atlantic grew before becoming common practice around the world. The authors ask, not quite fully rhetorically, “why do they keep getting hired, when they are frequently at the centre of public scandals?” A follow up question that better serves as an answer: what can average citizens do about any of this?
Against the narrative of overwhelming power and influence wielded by the TPSFs, there are stories of resistance and case studies to be learned from, of ordinary citizens taking back democratic control. Hurl and Werner’s own research did not come from some secret database or information leak; publicly-disclosed and readily available information backs their analysis despite only being a small sample of the bigger issue. Still, it is these nuggets of information that reinforce movements seeking democratic equality. Throughout the Anglo-capitalist countries that originated the global consulting industry, activists, researchers, and citizens have formed movements, particularly at the municipal level, to push back against the consulting trap at city council meetings and public hearings that provide entry points for taking back democratic control. “Access to information itself becomes an object of mobilization,” with democratic activists pushing for a shift towards a public service built on, “collective learning, community archives, and public deliberation.”
While these localized democratic movements are admirable and needed, more ambitious action is needed to restore democratic control over institutions and fight private sector encroachment. In their conclusion, the authors champion wider legislation that increases regulation, improved reporting from firms on their activities, and bans against certain “bad apples” in the consulting industry. The majority of the work to correct this neoliberal trend, however, is prescribed in the book to citizen-activists. In pushing back against this industry, there may be an opportunity to strengthen the movement. While the federal public service sector grows and plays catch up a decade after the Stephen Harper government’s cuts and freezes, public service workers face deskilling and vulnerability to future austerity, due to private sector encroachment. Public worker mobilization for better wages amid the affordability crisis in recent years has also demonstrated an appetite for labour’s leadership against the consulting trap, and could fight to bring outsourced services back into a reinvigorated public service.
Hurl and Warner address the limits to their work, providing a traceable history to the Anglo-American consulting trap while offering some solutions to how we may restore democratic accountability. Out of scope, unfortunately, is the wreckage these corporate consultants have brought outside the West – namely, in the Global South. McKinsey’s 2022 corruption case in South Africa offers a clear example of TPSFs’ reach in the developing world, and a wider study should fully reckon with the modern-day colonialism these companies perpetuate. Similar Global South shortcomings abound in other works analyzing the consulting industry such as The Big Con released last year by Broadbent Fellow Mariana Mazzucato and co-author Rosie Collington. Nonetheless,The Consulting Trap offers a timely and alarming reading of the consultocracy in an Anglo-American context.
