Consultancy firms’ roles in policy diffusion: a systematic review from the environmental governance field

Since the 1980’s, the growing involvement of private consultancy firms in the public sector worldwide has instigated concerns about the outsourcing of public policy advising to market-driven actors. Although these firms participate in spreading policy ideas, their roles have not received sustained attention, despite being observed by a few scholars. Against this background, the aim of this paper is threefold. First, from established policy concepts relating to policy diffusion, we identify the potential roles that consultancy firms may take on in spreading policy ideas. Second, we use a systematic literature review to collect and distil what is currently known about what different roles consultancy firms fulfil, and what kinds of tensions arise in their interactions with both clients and other actors. Third, we draft an agenda for future research on consultancy firms’ impact in governance processes. To focus our study, our review hones in on environmental governance, more specifically water governance, a significant area of activity for such firms where they play an important in-between role in providing policy ideas. We found indications that consultancy firms possess six types of capabilities (trusted facilitators, reactors to environmental policies, shapers of environmental policies, market drivers, interest navigators, and managers of public participation), and face various dilemmas around biases, decontextualized global practices, market interests, and manipulative practices. We conclude that more attention should be given to empirically refining capabilities involved in shaping policies and markets and to further highlighting how consultancy firms impact the diffusion of governance ideas in and beyond the water and environmental sectors.