The Politics of Public Money: Spenders, Guardians, Priority Setters and Financial Watchdogs Inside the Government of Canada (review)

The budget lies at the heart of government and politics. It is the principal vehicle for achieving a wide range of public policy goals—economic, social, and environmental. It provides an ideological signature of the party in power. And it speaks clearly about the competency of the government of the day. Yet understanding the technical complexity and often Byzantine nature of budgetary politics and related aspects of the management of public money is a formidable challenge for those outside (and many inside) government.

David Good provides a satisfying and illuminating (but not overly simple) guide to contemporary budgetary politics and process in the Government of Canada. He has a perspective as both an accomplished scholar of public policy (currently on the faculty at the School of Public Administration at the University of Victoria) and a seasoned practitioner, having spent 30 years in Ottawa in some very senior posts in both central agencies and line departments. This is not an insider’s account as such, but it does provide an insider’s perspective and reflects Good’s privileged access to key players. Interviews with 55 current and retired insiders form the main empirical basis for the study, along with a masterful grasp of the paper trail—budget papers, estimates, legislation, audits, other reports, and academic analysis.

Good’s main theoretical goal is to update Aron Wildavsky’s classic 1964 formulation of budgetary politics as a continuing struggle between Spenders (line departments with spending responsibilities) and Guardians (central agencies allocating funds and overseeing expenditure control). Two other sets of players are now as influential, if not more so, in Good’s analysis: what he calls the Priority Setters, who are mainly found in the Prime Minister’s Office and the Privy Council Office; and the Financial Watchdogs, some of long establishment but who now possess greater power and credibility such as the Office of the Auditor-General, and some relative newcomers such as the Comptroller-General and the Parliamentary Budget Officer. These four sets of actors jockey for position through three key sets of decisions: determining the fiscal aggregate (how much money and whether in surplus or deficit); allocating budgets among programs and departments; and implementing programs (expenditure management). The ascendant role of the Priority Setters in particular has been evident since Paul Martin’s 1995 budget. Now budgets are driven by a top-down, macro process, rather than by the bottom-up, micro process that Wildavsky described in the United States (and that for some time reflected Canadian reality as well).

The book lays out the intellectual and institutional basis for this changing environment up to and including the first two years in the Harper era. Its great strength is the author’s command of and insight into the nexus of the senior public service and the ministry. His findings reinforce those of Donald Savoie and others about the continuing concentration of politics at the centre and the increasing dominance of ever-changing political considerations. Control has been long since wrestled from departmental bureaucrats. Now the independent players (and power centres in their own right), such as the Auditor-General, have major influence. Moreover, the hugely political emphasis on the “fiscal aggregate” issues, and on making room for radically shifting program priorities (cf. Martin and Harper), leaves less oxygen in the system for dealing with program performance, in particular efficiency.

While this book was published before the financial and political crisis of late 2008, one can see Good’s central point in the rush to stimulate the economy and bail-out failing industrial sectors — crucial to macro success, but likely to be riddled with many micro failures. The senior bureaucrats will be left to deal with the latter largely on their own, yet the political class continues to layer on new rules and controls in reaction to real or perceived scandals. Good dealt with some of these issues more fully...