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Ginny Roth: Want to increase state capacity? Take big political risks

Commentary

State capacity, a rather hard-to-pin-down subject, has become a bit of a hot topic for the narrow niche of the online, right-of-center policy wonk class.

If you just rolled your eyes, you join my husband and no doubt many others in thinking maybe this group is just a bit too niche and maybe this topic is just a bit too theoretical.

What even is state capacity?

Well, Chis Spoke, a recent The Hub contributor, and his brother Matt sought to tackle this subject, broad and ill-defined as it may be, in an online discussion hosted by their Blue Forum this week. They asked me to join Tyler Cowen, a right-of-centre economist celebrity if there ever was one, and Alon Levy, an equally impressive wonk focused specifically on transit infrastructure, to tackle the meaty subject. I was asked to play the more practical politico foil to the others — and play it, I did. Because as important as I think increasing state capacity is, I differ from Cowen and Levy in in terms of how to go about realizing it.

For the purpose of the panel, state capacity was defined as the ability of the state to “get big things done.” My co-panelists both analysed the issue through a policy execution lens and their findings are interesting enough. But to my mind, no government can even contemplate getting big things done without a solid mandate and serious political will, the likes of which only true risk-taking can secure.

There has been much handwringing about how small-ball our politics has become. This is especially true in Canada, and especially true in the midst of a global pandemic where it often feels like politicians cannot see beyond the next hour, let alone the next decade. Visionary, ground-shifting policy programs are in short supply and it is easy to understand why. Risk is not often rewarded in politics. So, the safe bet for anyone trying to get elected is to set up regular polling, pull together a couple focus groups and piece together a hodge podge of small commitments that will win you enough seats to form government.

There’s no shame in this. These small commitments, coupled with decent managerial competence can deliver respectable change for voters. The Harper government’s numerous tax credits, for example, were easy to commit to, easy to execute and legitimately made life more affordable for Canadians. But they didn’t “get big things done.”

While the Trudeau government can count some policy wins, its ambitious focus on “deliverology” seems to have been conveniently left by the wayside as they have learned that new commitments are easier to talk about than making progress on old ones.

Risk is not often rewarded in politics.

The other reason Canadian politicians have not taken big risks over the last few decades is because things have been pretty good.

Moderate growth, low interest rates and relatively low unemployment have muted calls for major policy reform. But times are changing, and the experience of other western countries would seem to indicate that the public is growing intolerant of the political status quo. This realignment in the United States is what led to the election of Donald Trump and the subsequent hyper-aggressive Joe Biden policy agenda.

It is what has caused my co-panelist Tyler Cowen to rethink his economic perspective and coin the term “state-capacity libertarianism.” In the United Kingdom, it is what precipitated Brexit and it is why Boris Johnson can claim an even stronger mandate following byelection victories in long-time Labour-held constituencies last night.

The downsides of globalization and other 20th century consensus policies have not yet been felt as acutely in Canada but there are early signs that the pandemic will lead to an uneven recovery and that more Canadians will feel left behind by our economy and our culture.

There is an opportunity here for political leaders, especially conservatives, to re-think the role the state plays in getting big things done. But this kind of reform and the robust mandates that can be earned by ushering it in will not be accomplished by simply tweaking an existing economic ideology. We don’t need to look as far afield as Johnson or Biden for an example of how bold political leadership can set the stage for serious change.

Our own recent history presents a textbook example of what risk-taking campaigning can do. When Ontario Progressive Conservative leader Mike Harris and his team came up with their 1995 election platform, the Common Sense Revolution, they did not limit their vision by seeking to knit together small groups of voters, cause the least offence possible and hope to eke out a victory and make some incremental change. They went for broke. They strategized that by being bold, explaining to voters what they would do well in advance of the election, repeating it over and over again in the campaign and then delivering on it as quickly as possible, they would not only be successful, but their victory would be more than pyrrhic — they would actually achieve their bold goals. And they were right.

Boris Johnson was not successful because he told the civil service to sod-off.

Agree or disagree with the reforms brought in by the Harris government, no one can argue they didn’t exemplify state capacity defined as the “ability to get big things done.” Harris’ team ran an effective campaign but for the government to actually execute against its commitments, it needed an effective civil service. Importantly, and perhaps paradoxically, the boldness of the policy platform actually facilitated the clarity required for its proper execution.

As recounted in the excellent Cycling Into Saigon (a short book on the Harris government transition to power), David R. Cameron and Graham White describe how in preparing for the possibility that the Progressive Conservatives might form government, the civil service had a crystal clear blueprint in the Common Sense Revolution. This preparation and the transition that followed led to a remarkably effective first few years of government wherein the cabinet and senior public servants worked in lockstep to execute against the bold vision.

In other words, the ability to “get big things done” is not simply the result of effective technocrats being given the space to execute like experts (as Levy argues is important), nor is it the result of economists tweaking their thinking to accommodate public opinion (as Cowen recommends). It requires the clarity of vision that comes from bold, risk-taking leadership and the managerial competence that vision inspires in those responsible for executing it.

There are lessons here for conservatives, from our foreign counterparts when it comes to substance and from our own Mike Harris when it comes to style, if we are willing to listen.

Casual critics of Canada’s ability to get things done tend to vacillate between two complaints. On the one hand, we think everything is too politicized, and we should just leave execution to the experts (the civil servants and their private sector partners) and get out of their way.

On the other hand, we think the civil service is far too bureaucratic, beset by a culture that lacks urgency and with no incentive for efficiency or cost savings and so we pine for a strong man (or woman) to move fast and break things. I confess in my weaker moments I am often sympathetic to both inadequate arguments.

Unfortunately, the solution will not come so easily. Boris Johnson has not been successfully remaking the United Kingdom because he sits back and relies on the so-called experts, nor because he tells the civil service to sod-off. He and those who fought for Brexit took a massive political risk to present a bold alternative vision to the British people and won a series of clear mandates to pull it off.

In Canada, we have the power to increase our ability to get big things done, but we will only have the opportunity to do so if we elect political leaders bold enough to take that risk.

Mitchell Davidson: How to fix post-secondary policy after COVID

Commentary

When the pandemic began there was a tendency to think it would change everything forever, post-secondary policy included.

Historians, charged with a sudden and immediate relevance, looked to pandemics past for clues about what the future might hold.

Do not fret about the end of post-secondary institutions, history taught us. After the bubonic plague only five of the roughly 30 universities in Europe ceased operations. In fact, many of those universities still exist to this very day, carrying out the same traditions and structures from their pre-Middle Ages founding.

But then, as with nearly every subject area in the pandemic, the common understanding of COVID-19’s impact evolved into a force that would accelerate pre-existing trends. All sorts of trends come to mind, from the rise of online classes to the movement away from theory-based education in favour of practical skills-based labour market studies. In some corners of the internet, you can even stumble across talk of the end of tenure or the consolidation of post-secondary institutions.

The idea of an external force causing the rapid acceleration of change in the post-secondary system is nearly impossible to fathom. The institutions, by their very design, are methodical and slow to evolve, prioritizing research methods and foundational learning over skills training in-demand by employers.

In 1852, English historian Sir Richard Walpole suggested that a family would “hesitate to spend £1,000 or £1,200 which Oxford education involved, in order to obtain…the smattering of knowledge which a boy of ordinary attainments might be expected to possess before he left school.”

Fast-forward to the creation of the college system as we know it in Canada in 1965 and then Education Minister and later Premier of Ontario Bill Davis, seemingly channeled the British historian from a century earlier when he told the legislature, “it is not feasible, nor indeed desirable, that all graduated of our high schools should go to university. The real needs of a very substantial number of our young people lie elsewhere; they would be served poorly and fare poorly in the traditional university programs.”

The post-secondary system is the foundation the economy is built on and it is built using a lot of taxpayer dollars.

When it comes to modern day post-secondary reform, the issues of the 1850s and the 1960s are the same. Universities are slow to adapt their programming to the needs of the labour force.

For a variety of legitimate reasons, Canada’s universities are less nimble than their collegiate counterparts. They have standalone senates, individual pieces of founding legislation, more collective bargaining agreements, a robust tenure system, and a deeper and richer tradition. They also happen to have a near monopoly when it comes to producing those who make post-secondary reform decisions, where it’s political staff, civil servants, or politicians themselves.

For these reasons and more, the most common post-secondary reform discussed centres around the first half of Davis’s comments, that it is not feasible for all high school graduates to go to university. Canada’s progressives have put forward significant cost reduction measures for students ranging from forgiving student loan debt to making tuition completely free. In some respects, significant tuition subsidies are the literal embodiment of Prime Minister Justin Trudeau’s oft uttered slogan to “help the middle class and those working hard to join it.”

Though there is a legitimate conversation to be had about equality of access, it is the later half of Davis’s statement that goes virtually undiscussed: that the population requires more than just the current university offering to succeed. If the COVID-19 pandemic is to truly impact the post-secondary sector, it would be best if it forced decision-makers in government, including those on the centre-right, and post-secondary institutions to come to this realization.

For too long, the centre-right has ceded the ground on post-secondary issues for political reasons. The logic, understandably, is that students do not vote Conservative — big C or small c — so why bother? The reality is the post-secondary system is the foundation that the economy is built on, and it is built using a lot of taxpayer dollars.

Post-secondary spending falls only behind health care, education, and social services spending in most provinces. When capital funding is included, that number grows even higher. Knowing that the pandemic will one day force provincial governments to seriously review their spending, and that health care and education are virtually untouchable in the eyes of provincial premiers of all partisan stripes, cost reduction measures will come to the post-secondary space soon.

If universities resist that change, they will fall victim to more arbitrary decisions aimed at saving dollars rather than improving outcomes. If they embrace this change, by working with today’s governments to solve tomorrow’s problems, they can produce better graduates and make more money.

On outcomes, students are already passing judgement on the value of post-secondary with their feet. A staggering 18 percent of enrolled Ontario college students already have a university degree. Every student that opts for more schooling instead of joining the labour force costs government more, reduces tax revenue, and increases the ever-growing skills gap. On average, a single year of education costs the government $36,500 per student in Alberta, $31,300 in British Columbia, $25,800 in Quebec, and $21,500 in Ontario.

Post-secondary institutions are plugging serious revenue shortfalls with substantial tuition payments from international students.

Of course, investing in education has a greater societal and economic return in the long run. The same can be said for investing in graduate-level education as well, but many of these graduate-level college students are not returning to school to ensure a better job, they are returning to school to find their first one.

On revenue, post-secondary institutions across the country are plugging serious revenue shortfalls with substantial tuition payments from international students. At Queen’s University, undergraduate international students pay tuition rates that are more than seven times higher than tuition rates for domestic students.

The pandemic has made the revenue gaps even worse. Many international students find themselves restricted from coming to Canada during the pandemic and ancillary revenues from student spending on everything from parking to food is non-existent. In Ontario, the provincial association representing universities pegged the total cost of COVID-19 expenses at a net $500 million this year alone.

The question becomes how best to evolve the post-secondary sector. Alberta is pushing ahead with performance-based funding that ties a post-secondary institutions’ operating grant to student graduation and employment rates. Ontario is creating the country’s first ever micro-credential strategy, including financial assistance, to create quicker, more accessible programs designed to help those negatively impacted by the pandemic re-train and get back into the labour force.

Both are important examples of what can be done in this space. That said, both institutions and governments can go further.

If the trend of online programming is going to continue to accelerate, it can at least allow for exciting partnerships with international institutions that are world leaders in different areas through ‘microcampus’ networks. Canadian institutions can establish truly universal partnerships for the first time, combining in-person instruction from their local practitioners with online programming from international schools, giving students a combined degree while maintaining local enrollment requirements. The inverse is also true, allowing Canadian institutions to increase revenue by creating online programming that schools in other countries can use.

If the trend of fewer tenure track spaces is going to continue to accelerate, universities and governments can have a real conversation about which schools should offer which basic programs. Does every single British Columbia university need to offer an English program? Likely not. Some form of realignment and consolidation are likely coming anyways, as evidenced by Laurentian University’s recent bankruptcy and corresponding removal of 69 courses. If it is going to happen, why not do it in a planned and logical manner instead of a haphazard one?

Canada’s post-secondary sector has so far managed a history of continued expansion, which is largely good news for Canada. However, that continued growth masked underlying issues with programming relevance and revenues. Given the post-secondary sector has been built with taxpayer dollars, these issues should concern partisans of all stripes.

Ultimately, if the COVID-19 pandemic does accelerate trends in post-secondary after all, that would be a positive development.