Week in Review

Playing radio chicken

Some old tricks have an awful lot of staying power. They just keep working. Radio New Zealand’s use of one to add a youth station to its portfolio without cutting Concert FM was brazen, but it was rewarded for it, writes Eric Crampton.

In a prior academic life, I taught public choice – the economic analysis of political decision-making. During the week of lessons on the economics of bureaucracy, the students went through the consequences of the bureaus holding an information advantage over their ministerial masters.

Ministers come and go, but a bureau can be around for a very long time.

Bureaus develop a lot of expertise – they know their brief and their budget better than any minister ever could. Ministers’ attention can be fleeting, spread across multiple portfolios and always with an eye to potential Cabinet shuffles. Bureaus can have expertise that accumulates over decades.

A ministry’s accumulated store of wisdom can be a strong advantage. When a minister has an absolutely daft idea, the ministry can find ways either of explaining the problem to the minister, or of sidelining the bad project until ministerial attention turns to other matters.

But the ministry’s informational advantage is not always to the public’s benefit. It can be used in, well, game-playing.

The classic Niskanen model of bureaucracy, developed over fifty years ago, showed that the ministries’ information advantage over ministers can allow them to extract a larger budget than the government might strictly prefer. For example, if one of the ministry’s projects is particularly valuable to the government while others are more valuable to the ministry itself, misrepresenting where true costs really fall can help ensure both are funded.

And, in the case of budget cuts, the ministry’s best response is often to threaten a particularly cherished programme. It is the kind of thing that could easily have made a plotline in the excellent 1980s BBC series, Yes Minister. It is not hard to imagine Sir Humphrey Appleby, the Permanent Secretary in the fictional Department of Administrative Affairs, warning Minister Hacker that the only way of achieving demanded budget cuts would be by sacrificing a programme beloved by the Prime Minister.

It’s a somewhat risky play, but it can work.

RNZ seems to have made an even better play. By threatening to cut Concert FM to start a new youth-oriented station, RNZ seems to have achieved something it never could have achieved during any ordinary budget round: receive funding for both.

Imagine if RNZ had tried convincing the Government to fund a new youth service through normal budgetary processes. Cabinet might have worried about far more pressing financial needs. Commercial radio already seems to do a rather decent job of catering to the youth market.

The case for a new youth-focused public radio station looked weak at best. Worse, even if there were a case for such a station, can a public broadcaster really ever fill that niche? RNZ’s previous foray into youth programming at The Wireless failed. The culture required of an excellent news-focused public broadcaster may not be the culture needed to produce excellent youth broadcasting. It is hard to avoid cringing when imagining just what rough beast might slouch its way from RNZ Central on The Terrace into the crowded youth radio market.

RNZ seems to have recognised that it really did not have to convince anyone in Government of the need for a new youth radio station.

It could instead use its operational independence to paint the Government into a very difficult corner.

In the classic game of chicken, two cars speed toward each other, with the first one to veer off deemed the loser. It is a very silly game to play, unless the prize for winning is substantial and the opponent sure to veer. Strapping your opponent’s grandmother to the front bumper just before the game begins would make it difficult to lose.

RNZ threatened to flip Concert FM to an AM frequency and to replace its musical curators with an electronic jukebox, in order to free up the frequencies and funding needed to run a youth station. It was the equivalent of strapping Concert FM to the car’s front bumper and gunning the engine.

For the strategy to work, Concert FM staff had to be convinced RNZ would actually follow through with it. They, and their supporters, needed to worry that RNZ really would not veer.

It succeeded. Concert FM’s audience may be relatively small in number, but they are the cultural elite that governments find difficult to ignore. They mobilised. Once former Prime Minister Helen Clark weighed in, the government was almost guaranteed to veer.

RNZ now plans, according to reporting at The Spinoff, to deliver both – though that will require new funding. Everyone now seems to expect that funding to be forthcoming.

The Government may now have a bit of a problem if other Crown agencies take the appropriate lesson from this little episode. Successful entrepreneurs often attract imitators.

As Newsroom reported last week, RNZ’s chief executive Paul Thompson worried that going down normal channels to secure the use of the 102 FM band would “bog down our plans for five years and nothing would happen.” A game of chicken in an election year would be much quicker.

It has been a bit strange to see this episode reported as a “debacle” on RNZ’s part, and the reversal of the planned cuts at Concert FM as “embarrassing.” It would have been daft to vandalise Concert FM in favour of a new youth service. That now looks unlikely. But was it ever really the intended outcome?

Rochester University political scientist William Riker studied what he called ‘heresthetics’ – the manipulation of the context or structure of a political decision-making process to get the outcome one wants. Political entrepreneurs are attuned to seeing heresthetical moves, reshaping the political environment to make possible that which was previously impossible.

Rather than castigate RNZ’s boss for the “debacle,” we might instead recognise and even, perhaps, applaud his spectacular feat of political entrepreneurship. If getting everything one wants is a debacle, we might ponder just how wonderful a catastrophe might have been. Sir Humphrey would be proud.

The Government may now have a bit of a problem if other Crown agencies take the appropriate lesson from this little episode. Successful entrepreneurs often attract imitators.

Should the Government not wish this play to be repeated, it might need to find ways of demonstrating these kinds of moves do not pay off for those who choose to play them.

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