The Knowledge Problem at the Heart of Government

In modern government, ministers rarely carry a single, clear responsibility. Instead, they juggle several portfolios at once — agriculture and regional development, energy and climate, fisheries and forestry, health and aged care. This spread of duties makes them generalists in a world that demands specialists. The sheer diversity of sectors they oversee means their attention is stretched thin, and their grasp of detail is often only skin-deep.

This challenge echoes what economist Friedrich Hayek called the knowledge problem. No single person can ever hold the dispersed, local, and constantly changing information needed to make truly informed decisions across society. In Hayek’s view, centralised decision-making inevitably falters because it relies on limited knowledge filtered through a few hands rather than the lived expertise of those on the ground.

In practice, ministers rely heavily on the bureaucracy to fill this gap. Senior public servants brief them, prepare the talking points, and provide the technical advice that shapes legislation and regulation. While this seems efficient, it creates a structural tension. The public casts its vote for elected representatives, believing they hold the power to steer policy. But in reality, those representatives are often dependent on the interpretations, biases, and priorities of unelected bureaucrats who supply the knowledge that underpins every ministerial decision.

The result is a subtle shift in accountability. Voters think they are holding their elected officials to account at the ballot box, but the real drivers of policy — the advice, the risk assessments, the costings — originate deep in the bureaucracy. When ministers are spread thin across multiple portfolios, this reliance only deepens.

The challenge for democracy is clear: how can the will of the people be faithfully represented when the knowledge problem means decision-makers must rely on bureaucrats who are not directly accountable to the public? This is not an argument against expertise, but a reminder that expertise filtered through bureaucracy does not always align with the communities most affected by policy.

Until we acknowledge this gap, ministers will remain stretched, voters will remain frustrated, and bureaucrats will continue to wield quiet power from behind the curtain.