This article first appeared in the February 2021 issue
of Governance Directions,
the official journal of Governance Institute of Australia
Interview — Ngaire Woods CBE
by ANJI KURIAN Governance Institute of Australia
Ngaire Woods came to Oxford University’s Balliol College in the 1980s from her hometown in Auckland, New Zealand on a Rhodes Scholarship. She fully intended to return home to New Zealand. But the extraordinary world of ideas and the international crossroads of thought leadership that she found there persuaded her to stay. A doctorate and a junior research fellowship followed; then a brief stint working at Harvard. But Ngaire returned to England soon, for what was the beginning of a compelling Oxford story for this internationally renowned public policy guru, the Founding Dean of the Blavatnik School of Government.
‘Some people say Oxford is extraordinarily complicated. But it is a wonderful place to innovate because there are so many different centres of power. There are a lot of different interstices that you can build in. That is what brought me back to Oxford to craft what I wanted to build.’
Ngaire spent her first decade as an academic but simultaneously she began broadcasting radio documentaries on BBC on public policy issues. ‘I loved it because it gave me oxygen outside of Oxford. All the programs I did were on international policy. So, this meant I could fly off to Moscow and look at Russia’s economic reforms, or New Zealand to look at their policy reform or take on big issues like whether Britain should adopt the euro. I also got a chance to speak with the interlocutors and think about what they are saying.’ She also started working with emerging economies and developing countries who were trying to reform the IMF and World Bank and G24.
‘That work really impacted me because it helped me to see where academics could really have a practical role. How we could bring academic research to help countries do better. And so, I built this Global Economic Governance Program with the idea that we could bring groups of emerging-economy officials, whether they were from China, Indonesia, Brazil, Mexico, South Africa or India, to have them really think about what their agenda needed to be regarding international institutions. At this time, these countries were each being hit with financial crises and were relying on both the IMF and the World Bank and the G8 and what would become the G20.’
Ngaire went on to build further programs including the Global Leaders Fellowship Program which brought exceptional doctoral students from emerging and developing countries to Oxford for a year and then to Princeton for a year, so that they could network with the people who had the resources, experience, and influence to think about these global public policy issues. It was this work that led to Sir John Hood KNZM, then Vice Chancellor of Oxford asking Ngaire in 2006 if she would like to build a public policy school for Oxford. ‘That set me on a course to think about what it was that professional schools do. What is it that governments need us to do? How could I sew together this network of governments and private sector leaders that I had been building over the last decade.’ In 2010 Ngaire Woods founded and became the Founding Dean of the Blavatnik School of Government.
CONTINUOUS SHIFT IN GLOBAL POWER AND GLOBAL POLITICS
Never has the role of governments and the focus on public policy been sharper than it has been in the past year. It will only grow sharper in the years to come. There will be things that remain the same as before the pandemic and a lot that will be different. The thing that will remain same, Ngaire says, is the continuous shift in global power and global politics. ‘Angela Merkel describes it as a strategic rivalry between the status quo powers — the countries that see themselves as having already been at the top and benefitting from that position — US and Europe first among them and the rising powers, in particular China. Through the centuries we see this play out over and over again as countries shift in power.’ However, China has been a world power and one of the largest economies through most of the last ten centuries at least. And so, for those who take the long perspective it is China resuming its place. But, Ngaire says, US policymakers see this as a sudden challenge from upstart China, which for whatever reason they weren’t expecting.
‘That’s been a sort of process for the last two decades — this China Rising process. And that strategic rivalry is important because both the United States and the European Union, need to think strategically. Their challenge is that as democracies they have a built-in risk of short-termism. And it is only a risk. It is not true to say that all democracies are consigned to rampant short-termism. Some democracies manage that very well. Look at the Scandinavian countries.’
‘But we’ve seen in the US and UK, the risks of short-termism where you lunge from one elected government to the next, and you don’t use the apparatus of your permanent civil service and court structure and academic institutions to create a long-term strategy.’ China, Ngaire points out, is good at long-term strategy. They do much better than other countries in looking at their ten-year interests, and their twenty-year interests. ‘We’ve seen that on climate change where they’ve been able to craft and deliver on commitments. And on that we need to learn from them, from their approach to climate, about why and how we need to set long-term goals and really use the apparatus of the state and the government to achieve those.’
So, for the US and the EU there has been catching-up to do Ngaire says, because in the last 30 years their governments stepped back. ‘If you look back in the 50s and 60s governments had strategies, they had planning councils, they had development banks. Governments saw themselves as needing to set strategic directions and compensate for market failures through investments and policies.’ The wheels came off that in the 70s for all kinds of reasons says Ngaire. Credit was too cheap because inflation was high, poor investments were made. Lots of governments had large infrastructure projects that became white elephants. There was plenty of corruption and far too much easy money.
GOVERNMENT MUST WORK WITH BUSINESS AND CIVIL SOCIETY
‘But now we are going to have to reset. To recapture some of the ways in which government works with business and civil society, to develop a long-term strategy. That is one of the things I very much hope will be learnt. The new challenge that could help us get there is both managing COVID and then rebuilding after it. It is not that managing COVID and rebuilding after it is going to magically provide us with everything we need. And we’ve already seen that. In the very first phase of COVID people said “Oh, this is going to help us resolve inequality problems because everybody is pulling together.” Actually, in most countries COVID has thrown an extraordinarily harsh spotlight on inequality. The people who are most affected in Britain for instance are the very poorest. They are many times more likely to be infected, many times less likely to get tested. They can’t afford to be tested because they’ll then be fined for going to work, but they can’t afford not to go to work. So, COVID has exposed the harsh conditions and inequalities.’
Building back is now a huge task, Ngaire points out. Many businesses around the world are closing down. Children are missing out on schooling, in addition to those who were already not attending school. There is a generation of trained, post-school workforce who are unemployed and giving up hope. And the GFC has shown that if you are unemployed between the age of 18 and 25, you are likely to stay that way. ‘So, we’ve got some really urgent problems to tackle. And the status quo of tackling them in democracies which are lurching from one electoral campaign to the next is going to be incredibly unsatisfactory. That is just going to increase the volatility of both the electoral system and the economy.’
To tackle these challenges, Ngaire calls for business to work with governments and not-for-profits. ‘There have been problems bubbling up in all sectors and people pushing for change over the last decade that were not being heard. But there is a momentum behind that now.’ Before COVID we had begun to see the shift in the private sector as they began thinking about what long-term capitalism means, what corporate purpose means, what stakeholder capitalism means. Ngaire reflects, ‘How do we need to be adapting so that we don’t face backlash from the very communities which are our customers, our workforce, our investors, our auditors, our insurers — whose pensions are sitting in the pension funds that fund us. Whose church commissioners are now acting like activist investors. And that nexus is a really important one for resetting business.’
SEIZING THE INVESTMENT PLAYBOOK
Ngaire believes that we are going to see one group of countries bouncing back better out of this crisis. They are going to be the governments that have the capacity to seize the investment playbook. And that capacity depends on three factors. Firstly, the resources which she says can be found globally if countries work together. So international cooperation will be vital. The countries that succeed will be the ones who seize on the fact that we are in a very low interest environment where governments can borrow, their businesses and sub-national units can also borrow. ‘But yes, they need financial resources. They need human resources, people who have the courage and openness to learn at speed. And they should be reaching out to the best private sector leaders to build capacity to do this.’
They will also need good, transparent relations with business. This cannot be governments thrashing around blindly looking for investment strategies Ngaire warns. ‘This has got to be done by governments signalling with great clarity and predictability and long-term security to business. This is where we are setting the bar. This is what we are pledging to you for the next decade. So, go invest. Invest in skills, train people, hire people, build.’
There will be governments that falter either because they do not have the access to resources, or they don’t have the courage to access resources. ‘So, they will default back to the austerity playbook. Because that is the only thing they know how to do, and it feels less risky to them. They will falter because they do not know how to reach out to business leaders, to forge a coalition, which isn’t just letting businesses be predatory with government resources. They will falter if they keep changing the rules. If they intervene too far and can’t create this predictable and transparent framework for business to invest.’
‘But for the governments that do it right, boy this will be an extraordinary period. Building back better can really happen.’
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