The Consultant Class Has Its Own Foreign Policy

A significant amount of what looks like national policy is produced by firms that are not accountable to any nation. Strategy consultancies, sovereign advisory practices, law firms with government affairs arms, and reputation managers who work for whoever retains them.

This is not new. Governments have always hired outside expertise. What has changed is scale and scope. Advisory firms now sit at the center of transactions where they are simultaneously advising the state, the counterparty, and the investors, sometimes through structures designed to make the overlap invisible.

The structural conflict

The conflict is not usually a hidden payment. It is a business model. A firm that advises a government on privatizing an asset has clients who want to buy that asset, and it will have more of them next year.

Chinese walls are the standard answer and they are real, in the sense that people do observe them. They are also thin. Firms have a house view that travels through hiring, training, and the internal pressure to be consistent across engagements. A shop that recommended a structure in one country will recommend it in the next, because that is what its people know how to build.

The advice is not corrupt. It is just narrow in a way that reliably favors the kinds of transactions the adviser knows how to execute.

Why governments keep buying

The demand is real and understandable. Capacity inside government has been hollowed out over decades of headcount restraint, and the specific expertise required for a complex transaction genuinely does not exist in most ministries.

There is also a political function that nobody puts in the contract. An outside report provides cover. A minister who wants an unpopular decision can commission an assessment that recommends it, then present the recommendation as an external finding. This is a service, and it is priced accordingly.

The knowledge does not stay

The most durable cost is what the arrangement does to state capacity. Every engagement that could have built internal expertise instead builds it at the firm, which then sells it back at a premium, and hires the officials who supervised the work.

Over enough cycles, a ministry loses the ability to evaluate the advice it is buying. It cannot tell a good recommendation from a bad one, which makes it more dependent, which makes the next engagement larger. Several governments are visibly at this stage and have no plan for exiting it.

What could change

The changes that would matter are procedural and dull. Publish the engagements, including scope and fee. Require disclosure of the adviser's other clients with an interest in the transaction. Impose real cooling off periods on movement between the firm and the ministry it advises.

None of that ends the practice, and none of it should. Outside advice has genuine value. What it would do is make the dependency visible, which is the precondition for anyone deciding whether the price is worth paying.