Bigger is not always better

I am big fan of Marianna Mazzacuto’s work on public innovation and state capability. A recent paper published by her and Rainer Kattel made a very interesting read and also offered a lens to analyse Malta’s public sector especially in light of Vision 2050 and other strategies and regeneration plans that were recently launched.  

Malta’s public sector has grown. Employment has expanded. Spending has increased. Government today plays a larger role in the economy than it did a decade ago. Yet public frustration persists. 

This is the uncomfortable truth we must confront: Malta has built an expansive state, but not necessarily an effective one. The challenge is not size. It is capability. 

Vision 2050 outlines bold ambitions for the country. It speaks of sustainability, wellbeing, competitiveness and resilience. But visions do not deliver themselves. The central constraint to achieving long-term transformation is whether the public sector possesses the capabilities required to steer complex change. 

International research helps illuminate this gap. Mariana Mazzucato and Rainer Kattel argue that modern states must move beyond the narrow logic of correcting market failures. Governments today are called to shape markets, guide innovation, and steer socio-technical transitions. Doing so requires more than budgets and headcount. It requires what they describe as structural capacities, organisational routines, and dynamic capabilities that allow governments to experiment, learn and adapt under uncertainty. 

The distinction between capacity and capability is crucial. Capacity refers to scale—how many people, how much funding, how many programmes. Capability refers to what those resources can actually accomplish together. 

Many governments increase capacity without upgrading capability. The result is expansion without effectiveness. 

Malta’s experience reflects this tension. Regeneration efforts in Marsa, repeated over successive administrations, illustrate a state that can design plans but struggles to sustain coordinated, cross-sector delivery over time. Similarly, proposals such as cultural leave reveal how policy conceived within one domain can generate unintended consequences in another when systemic effects are insufficiently understood. 

Research on public sector reform shows that traditional programme management assumes predictability. It places large bets upfront, designs detailed plans, and measures success through outputs and compliance. In complex environments, this approach often fails. Assumptions go untested until late. Feedback loops are weak. Learning is slow. Risk accumulates quietly until it becomes politically and financially expensive. 

The alternative is mission orientation. 

A mission is a clearly defined societal outcome that cuts across silos and aligns policy, funding, regulation and delivery around a shared objective. It forces clarity. It exposes trade-offs. It demands coordination. Most importantly, it reshapes how government organises itself. 

Instead of fragmented departments guarding mandates, missions require cross-ministerial coalitions for change. 

Coalitions for change are not committees. They are empowered, multidisciplinary teams drawn from across government, working alongside private actors, academia and civil society to solve defined problems. They combine policy design, operational knowledge, data expertise, procurement skills and financial oversight within a single delivery architecture. 

Such coalitions enable governments to move from writing strategies to solving systems. 

Singapore offers a relevant lesson. Its state is not simply large. It is strategically capable. It works through cross-agency teams and long-term missions that align public investment with private sector capability. The government acts as funder, coordinator and strategic partner, crowding in private innovation rather than crowding it out. Industrial transformation was not left to markets alone. Nor was it delivered through bureaucratic fragmentation. It was steered through deliberate coalitions that integrated finance, regulation, infrastructure and enterprise development. The result is not perfection. It is coherence. 

Malta, by contrast, often relies on vertical accountability structures and inter-ministerial consultation processes that slow decision-making and dilute ownership. Complex issues such as housing affordability, climate resilience or labour market reform are treated as sectoral policies rather than systemic missions. This model struggles in a world defined by interconnected risks. 

Consider climate resilience. Research on systemic climate stress shows that risk today is compounding and cascading across supply chains and sectors. Insurance mechanisms alone cannot absorb these shocks. Effective adaptation requires coordinated public planning, credible data integration, and long-term investment signals. A fragmented state cannot manage systemic risk. A mission-oriented state can. 

The deeper problem is cultural. Over decades, public administration has been shaped by a focus on static efficiency—minimising costs, meeting short-term targets, outsourcing complexity. Yet the challenges Malta faces demand dynamic efficiency, or rather, the ability to reconfigure institutions, learn continuously, and steer structural transformation over time. 

Static efficiency shrinks the state. Dynamic efficiency strengthens it. 

An expansive but low-capability state risks becoming distortionary. It may dominate employment and spending, yet fail to catalyse innovation or resilience. It may crowd out private initiative without providing strategic direction. It may generate compliance but not outcomes. 

Capability-building must therefore become a national priority. 

First, missions must be clearly defined. Not generic ambitions, but measurable, time-bound societal objectives that cut across ministries. Regenerating a specific urban region, decarbonising a defined sector, or increasing workforce productivity within a decade. Missions clarify direction and align resources. 

Second, cross-ministerial coalitions must be institutionalised. These teams should hold joint accountability for outcomes, with authority to align budgets and procurement around mission goals. 

Third, the public sector must strengthen its internal skills. Over-reliance on consultants weakens institutional memory. Capability in data, systems thinking, contract management and delivery design must be embedded within government. 

Fourth, government should embrace its role as strategic funder and market shaper. Public finance should crowd in private capability. Partnerships should be structured around shared missions, not transactional outsourcing. 

Vision 2050 can succeed, but only if it is underpinned by a transformation in how the state works. 

Malta does not need a smaller state. Nor does it simply need a larger one. It needs a state that learns, adapts and sustains direction beyond electoral cycles.