Think locally to tackle national challenges

Dr Michael Johnston
Insights Newsletter
25 August, 2023

One of the key themes that echoes through the 21 areas of public policy we cover in Prescription for Prosperity, is localism.

We need to get central bureaucracy out of the way, so that local innovation can thrive. We recommend measures to make the public service more focussed on its core business and more accountable to Ministers and the public.

In education, we would like to see capable principals and expert teachers lead the way in curriculum and teacher education reform. This will not be a quick fix but, if we enable experimentation, measure the results, and replicate success, we will get much more durable reform in the medium term.

In health, we favour local solutions to local needs, with funding for primary and community care. Central agencies should support community-embedded medical programmes rather than trying to run everything from the centre.

In housing, we should abolish much of the current regulation. The Resource Management Act should presume a freedom to build, rather than bogging down urgently needed development. New fiscal tools should be provided to local governments, giving them incentives to build infrastructure.

We should enable employers to grow their businesses by making it easier for them to recruit the best people internationally. That means transforming Immigration New Zealand into a customer-focussed agency, rather than erecting a great wall of red tape that seems designed to keep prospective immigrants out.

Localism, in one form or another, underpins just about all successful innovation. When it comes to solving difficult social, economic and technological problems, central control simply doesn’t work very well. Even when it does, it’s very expensive.

Centrally planned solutions suffer from two related problems.

One is insufficient information. Central planners can’t possibly know enough to design solutions that work in complex and dynamic environments. Local solutions can be much more agile and adaptive.

The other is that, almost by definition, a centrally planned solution assumes that one size fits all. But what works in one place is not necessarily what will work in another.

Localism doesn’t get it right every time – far from it. Any truly innovative process entails trial and error – with plenty of the latter. But, over time, locally developed solutions are more robust.

That is why a big dose of localism is such an important ingredient in our Prescription for Prosperity.


Stay in the loop: Subscribe to updates