Navigating the pitfalls of outsourcing: Policy consulting in settings with lower administrative capacity

Abstract

Interest in consultants’ work for governments and their impact on policy processes has grown, yet the phenomenon remains shrouded in mystery. Existing insights draw mainly from Western European and Anglo-Saxon countries with strong, well-resourced bureaucracies. How consultants operate elsewhere remains largely unknown. This study addresses the gap by examining policy consultants in weaker administrative settings, using Bulgaria − a European laggard on various government capacity metrics − as a case study. By analysing an original longitudinal dataset of consulting contracts and interviews with consultants and civil servants, we substantiate existing scholarly concerns over the ubiquitous outsourcing of policy work. The study equally highlights the European Union's role in both driving and facilitating policy work outsourcing. This phenomenon has received little attention yet may alter the consultant−client relationship, in ways which go against commonly held assumptions. Paired with weaker in-house capacities, it creates barriers to expertise utilization and hinders capacity building. Specifically, continuous reliance on consulting work weakens bureaucratic ownership over outputs and appears to reinforce maladies of the policy process such as a formalistic application of analytical techniques. The study offers rare insights into outsourcing practices within a previously unexplored context, offering empirical evidence that supports and expands upon existing theoretical frameworks and identifies unique dynamics specific to low-capacity settings.

Points for practitioners

Governments engage consultants when they need specific expertise, require a fresh perspective, or lack internal capacity for a specific project. Nevertheless, the decision to hire consultants requires careful assessment of the problem's complexity, the organization's internal capabilities, the specific goals of the engagement, and the potential for skills and knowledge transfer. Governments need to ensure that outsourcing engagements include provisions for transferring knowledge and competencies to build in-house capacity or prevent it from eroding on the longer-term.