You might get the impression that I can be rather critical. No doubt I can. But one the thing the last couple of years has confirmed to me is that there is a still a sunny upbeat, naively optimistic, streak lurking within. In particular, I keep being surprised by just how bad things really are at the Reserve Bank, and that despite having spent 32 (mostly quite enjoyable) years on the payroll.
A few weeks ago I wrote about the Reserve Bank’s (statutorily obligatory, but largely pointless – given that the Governor is just about to leave, and the Governor makes all the decisions) Statement of Intent for the next three years.
Quite early in the document, in a section headed “Strategic direction”, I had come across this
The Reserve Bank’s purpose is to promote a sound and dynamic monetary and financial system. It seeks to achieve its vision – of being the best small central bank
As I noted then
It was a line one used to hear from the Governor from time to time when I worked at the Bank (somewhere I think I still have a copy of a paper that attempted to elaborate the vision), but it hasn’t been seen much outside the Bank, and if I’d given the matter any thought at all I guess I’d have assumed the goal had been quietly dropped. Apparently not.
As an aspiration, it is one that has always puzzled me.
It is good to aim high I suppose, but isn’t it really for the owners to decide how high they want the Reserve Bank to aim? Then it is the manager’s responsibility to deliver. I’ve not seen the Minister ask the Reserve Bank to be the “best small central bank”. That isn’t just an idle point, because the ability to be the best will depend, at least in part, on the resources society chooses to make available to the Reserve Bank. There are some gold-plated, extremely well-resourced, central banks around, particularly in countries that are richer than New Zealand. I suspect New Zealand probably skimps a little on spending on quite a few core government functions including the Reserve Bank (but I’m probably somewhat biased, having spent my life as a bureaucrat), but that is a choice. If we asked of the Reserve Bank what we ask of it now, but made available twice as many resources, we should expect better results. As it is, there are limitations to what we should expect from 240 FTEs, covering a really wide range of responsibilities (the Swedish central bank, for example, appears to have about 40 per cent more staff, for a materially narrower range of responsibilities).
Given that the Governor has now restated the vision of having the Reserve Bank as the best small central bank, I assume he must have some benchmark comparators in mind, and assume they must have done some work to assess how they compare. Since I assume any such documents would be readily to hand, I’ve lodged a request for them.
Specifically I asked as follows
I refer to the observation on p10 of the Bank’s new Statement of Intent, in which it is stated that the Bank’s vision is to be “the best small central bank”. I would be grateful if you could provide me with copies of any and all benchmarking exercises conducted since the vision was adopted (the start of the current Governor’s term?) indicating how the Reserve Bank is doing relative to other small central banks.
I’m not quite sure what I expected, but it wasn’t what I finally received this morning.
The Reserve Bank is declining your request under section 18(e) of the Official Information Act, because the document alleged to contain the information does not exist or cannot be found. Specifically to this ground, the Bank is declining your request as it has not conducted any benchmarking exercises since the vision was adopted indicating how the Bank is doing relative to other small central banks.
Not a thing. No comparative tables. Not a single paper for the Senior Management Committee or the Governing Committee. Not a single paper for the Board, the body paid to hold the Governor to account, and to scrutinise and report on the Bank’s performance.
I’m still flabbergasted. This is, so staff and the now the public are told, the Bank’s “vision”. It was a distinctive emphasis introduced by the current Governor shortly after he took office, still being repeated front and centre in a key accountability document as the Governor gets ready to leave office. And yet, he and they have apparently done nothing at all to assess where they stood at the start, and what if any progress they might have made since. I’m sure that any junior manager at the Reserve Bank who articulated an ambitious vision for his or her own team would rightly have got pushback along the lines of “how will know you’ve achieved it?” and “who are you benchmarking yourself against”, or “what data collections processes will you put in place to enable us to assess whether you are making progress”.
Ambition is good. Vision is good – “where there is no vision, the people perish”. But hand-wavy “visions” with little or nothing behind them, that apparently drive no decisions, and where there are no benchmarks, and no way of assessing progress, are worth almost nothing at all. Within an agency, they just fuel staff cynicism. Beyond the four walls of the institution concerned, they border on the deliberately dishonest – the sort of cheap and empty rhetoric (small beer in this case) that is corroding confidence is institutions and leaders across the Western world. The pervasiveness of this sort of cheap rhetoric is presumably reflected in the fact that both the Minister of Finance and the Reserve Bank’s Board reviewed drafts of the Statement of Intent. Did none of them ask: “Governor, this vision of being the ‘best small central bank’, where do you stand now, what progress have you been making, and how will we – those charged with holding you to account – know?”?
Visions have their place. But from independent government bureaucracies, I’d settle for consistently excellent delivery on the tasks Parliament has given them. For too long now, we’ve not had that from the Reserve Bank, or from those charged with holding them to account on our behalf. But when they met last week, applications for Governor’s job having closed, was the Reserve Bank Board even aware of the deficiencies? And, even if so, did they care?