The Role of External Consultants in Public Administration: The Dynamics Between Internal Capacity in Public Administration and External Consultants

Abstract

This thesis investigates the conditions under which consultants become co-developers of policy with public administrations in Denmark and France. Through thematic analysis of semi-structured interviews with both private consultants working for public clients and public sector employees who interact with consultants, several key findings emerge. The study reveals that consultancies become co-developers of policy primarily when there is significant internal capacity loss within the public sector, driven by the outsourcing of state functions to external consultants. This trend is rooted in the adoption of New Public Management reforms, which have legitimized the role of private consultants by promoting efficiency and optimization strategies akin to private sector practices. Additionally, the research identifies organizational immaturity and high turnover as critical factors, leading to poor knowledge retention and weak institutional memory resulting in reliance on external consultants for several state functions. Finally, the thesis highlights that in- housing state competencies and early involvement on projects can mitigate the dependence on external consultants.