Early last month I wrote about the advertisements placed on behalf of the Reserve Bank Board, presumably with the acquiescence of the Minister of Finance, looking for people interested in becoming external (part-time) members of the new Monetary Policy Committee, to be established once the amending legislation – currently before a select committee – is passed. Recall that under this legislation the Minister of Finance would be able to appoint only someone recommended by the Board. Applications closed on 7 September.
I was fairly sceptical as to who would be interested in these roles – which might seem attractive at first glance, but are much less so at second or subsequent glance.
It will be interesting to see what sort of people the Board and the Minister come up with, assuming that Parliament eventually passes legislation along the lines of the current bill (and bear in mind that we have a minority government again). It is hard to see why the roles – probably little more than silent adjuncts to the Governor – would be attractive to really good people, or who will really be free to take them up (even an academic – apparently not wanted by the Governor – might struggle to commit 50 days a years, spread over the year, not just in the long summer vacation).
And so it will be interesting to see what people they finally manage to attract, both in the first round, and a few years later when the novelty has worn off. A smart (but deferential) semi-retired person would probably fit the bill quite well, but since the government and the Bank have been clear they don’t want people who might rock the boat, and they apparently aren’t keen on economists, and since even the externals together will be a perpetual minority, you wonder why someone good would be interested. Pocket money probably shouldn’t be the motivation, at least if the government were serious about putting in place a strong, well-functioning, MPC. Of course, as it is, there is no evidence of such intent.
A few days ago I was having a conversation with someone about these roles, which prompted me to wonder about progress, about what sort of applicants they had attracted, and so on. Given that applications closed on 7 September, you’d have assumed that by now they would be well through the process of getting towards a list of names the Board could recommend to the Minister of Finance.
But apparently not.
On Tuesday I lodged an OIA request with the Board, asking for
- total number of applications received,
- the proportion of total applications received from women (as best the Board or its agents could tell),
- the proportion of total applications received from people currently resident in New Zealand, and
- the proportion of total applications received from people currently employed at a university.
and for the same information for the applications taken further (ie not immediately dismissed as unsuitable by the Board or its recruitment firm).
On Wednesday, I had a impressively quick response to the second half of the request. I was told
No applicants have been selected yet for further consideration.
It must, in that case, be one of the slowest recruitment processes ever.
As it happens, I still had the information pack provided to anyone expressing interest in the positions (which I had requested purely for research purposes), and on flicking through that I found an approximate timeline, which indicated that the original plan was for a shortlist to be presented to the Board at its meeting last week. The Board only meets once a month, and Board papers usually go out a week prior to the meeting. As applications had only closed on Friday 7 September, this seemed like a normal and expected timeframe – the first Board meeting after applications closed at which names could (reasonably) be considered. The implication of the timeline was that last week’s Board meeting would approve a shortlist, because it goes on to indicate that interviews would be occurring in late October/early November.
It isn’t clear quite what is going on. But one hypothesis is that the pool of applicants was sufficiently small and mediocre that the Board (and perhaps the Minister) has been left in a bit of a quandary. If there were even three or four able and impressive people applying there should have been no difficulty in drawing up a shortlist (the Minister plans to make three appointments) and sending a “thanks, but no thanks” response to the others. Instead, they probably have a very small pool of applicants, a few of whom might at a (considerable) pinch fit the bill, but none of whom would add lustre or credibility to the government’s claims about the fresh perspectives outsiders would add to the new MPC.
As I suggested the other day, one problem with this (highly unusual) appointment process, in which the Minister cannot simply appoint people in whom he (in this case) has trust, is that if the Minister wants to inject names to the process he has to do so behind the scenes (a word in the ear of the Board chair), in a non-transparent (and thus not very accountable) way. Suggest a fairly borderline political crony and so long as he can persuade the Board to recommend that person – and the Board has ongoing battles to fight, including around its own role after the rest of the RB Act review – the Minister is substantially immunised against Opposition attacks (“but I only acted on the recommendation of the Board”) in a way he wouldn’t be if he were directly responsible for all appointments.
Who knows quite what is going on at present. Perhaps the Board chair has just had a prolonged illness and been unable to deal with the matter (in which case he has my sympathy). More probably, they (Board and Minister) have found it a lot harder to interest good and credible people in the role – the more so after the Governor was openly expressing his distaste for economists in the role – and are now casting around trying to work out what to do next, whose arm to twist (to try to interest). If so, it isn’t too late for them – Board, minister, Treasury – to think again and propose amendments to the legislative model (and to official statements as to how it will work), in ways that might attract really able people, and make this reform the landmark step forward it could have been (but at present is unlikely to be).