Shedding light on consultancy firms

Consultants’ work is often opaque, and feeds into broader processes (Mance, 2023).

The last four to five decades can almost universally be characterized as an age of privatization, an intended retreat of the state, and an increased emphasis on governance instead of government. Much attention has been paid to the ways in which the private sector can provide services, deliver infrastructure, and thus help implement policy, but these roles are often seen as enacted in the shadow of the state, which still sets goals and makes decisions on policy design (see Green, 2014). However, private actors are important in this realm too. One hitherto little discussed type of private actor that has entered the area of policy design is the consultancy firm. Borrowing from Alvesson’s (2004) definition, we refer to consultancy firms as private sector companies comprised of professionals or experts who advise public and private clients on the identification of problems and solutions on a fee-for-service basis. They offer services that can be considered knowledge intensive (Hojem, 2012) and thus require certain levels of expertise and credibility.

The increasing “infiltration” of private consultancy firms in the public sector around the world since the early 1980’s, has instigated concerns about “the replacement or undermining of democratic mechanisms of governance through outsourcing public policy advising to private market-driven actors and the displacement of non-commercial sources of expertise through the hiring of outsourced private expertise”, as explained in the works of Ylönen and Kuusela (2019) and Stone et al. (2021). In fact, scholars such as Saint-Martin (1998) and Ylönen and Kuusela (2019) use the critical perspective “consultocracy” to describe this shift from public to private policy making as these private firms, non-elected actors, increasingly enter democratic government spaces. In other words, there is a “shift from appointed and salaried, to contracted and ‘billable’ knowledge actors” (Gunter et al., 2015, p. 518). Despite these normative concerns, empirical insight about the roles and impacts of consultants is still sparse, and much remains to be known about these firms’ presence and role, the dilemmas that they handle, and their impacts on public policy (see Howlett & Migone, 2013; Hurl & Vogelpohl, 2021; Saint-Martin, 2004; Stone et al., 2021).

The scant literature on this topic suggests that consultancy firms’ roles in policy development might not relate to policy innovation in the sense of the invention of new policy concepts and approaches, but rather to the elaboration, certification, and spreading of such concepts to jurisdictions that previously did not use such designs (see Jordan & Huitema, 2014). This means that consultancy firms are an actor in policy diffusion, a role that has so far not received sustained and systematic attention, although it has been observed by some authors (see De Oliveira & Pal, 2018). Hence, in this study, we ask: What roles do consultancy firms play in the diffusion of public policies, and what is known about how these roles play out in practice and the resulting dilemmas within governance processes? To answer this question, we situate our work in the policy diffusion literature and, first, distil the potential roles that consultancy firms might play and the associated tensions (in theory). This body of literature speaks of diffusion but also related terms such as transfer, translation, and circulation. Second, we perform a systematic literature review (SLR) to amass the current empirical evidence on this topic. Third, we establish the research gaps that exist in this domain, and thus the research agenda that could be pursued.

Given the pressing nature of global environmental challenges such as climate change, involving inter alia floods, and droughts, we choose to focus on consultancy firms’ roles and tensions in environmental governance, with a specific focus on water. The water sector is an integral and essential component of our global system (see Biswas & Tortajada, 2018). The increasing pressure of climate change affects our global water systems making their management critical. It is a sector that is traditionally seen as technically and engineering oriented, turning it to a relevant sector to study policy paradigms (see Hogan & Howlett, 2015). It is a highly multidisciplinary field that involves the governance of water resources and represents a sector that is highly interdependent with other key sectors such as energy, agriculture and the economy. Governing water resources is a pressing global policy concern and the year 2023 was key marking the first major conference of the United Nations (UN) dedicated to water since 1977. This is but one of many instances portraying how water governance is an international domain where policy ideas travel and compete around the world (see Meijerink & Huitema, 2010; Mukhtarov, 2014; Mukhtarov et al., 2022). Furthermore, there are indications that it is an important area of activity for the private sector, for instance for international consultancy firms that specialize in the water sector (e.g., Beveridge, 2012). Finally, it is a sector that has received increasing attention from policy and governance scientists (see Özerol et al., 2018) and previous experiences show that it is a fertile ground for theory building (e.g., Sabatier & Brasher, 1993), theory testing (e.g., Meijerink & Huitema, 2010) and for empirical observations on consultancy activities (see ENR 2023 Top 200 Environmental Firms Engineering News-Record, n.d.). We can therefore draw a clear and emblematic picture of consultancy firms’ roles in policy diffusion from the water sector potentially also providing insights for other sectors.

As stated, the objectives of this paper are conceptual, empirical, and agenda-setting. At the conceptual level, we offer a theoretically grounded account of consultancy firms’ roles and tensions as viewed through established lenses related to policy diffusion. Empirically, our paper offers fresh insights and a new angle on a compilation of the latest research derived from an SLR on consultancy firms in environmental governance with a focus on water governance. This allows us to take stock and connect currently scant and fragmented observations through the related lenses of policy diffusion. Finally, our paper proposes a research agenda that could further elucidate how consultancy firms are involved in policymaking.

The conceptual puzzle: how do consultancy firms fit in the diffusion picture?

Private consultancy firms and policy diffusion

To explore what is known about consultancy firms’ roles and tensions in the diffusion of public policies, we focus on the main concepts that address how policy ideas travel around the world, while highlighting different aspects. We have so far referred to diffusion as the encompassing, and most widely used, term referring to the travel of policy ideas (Graham et al., 2013). The policy diffusion literature is extensive, starting from the idea of how states emulate one another’s ideas: the classical diffusion concept. Other concepts that have increasingly received attention are policy transfer and mobilities, as well as translation and circulation (see Porto de Oliveira, 2021).

These concepts for studying diffusion co-exist, overlap to some extent, but highlight different aspects of the diffusion of policy ideas. In Table 1, we briefly summarize the concepts of classical diffusion, transfer/mobilities, circulation, and translation, and consultancies’ roles and tensions that we derived from these.

Table 1 Analysis framework for researching consultancy firms based on concepts of policy diffusion, transfer/mobilities, circulation, and translation
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In line with the logic of the diffusion concepts, we frame how consultancy firms could fit into the conceptual puzzle, and consequently the correct denominator for their roles in diffusion and the tensions that may emerge. We explain and further elaborate on each of the derived roles and tensions in the following subsections, focusing on classical diffusion, transfer/mobilities, circulation, and translation, respectively. This tailored rendering on consultancy firms’ roles and tensions in the diffusion of policy ideas is then used for the empirical investigation of this study in the third and the fourth section.

The classical diffusion concept: the role of consultancy firms as state contractors

According to Graham et al.’s (2013, p. 675) consolidated definition, policy diffusion means “when one government’s decision about whether to adopt a policy innovation is influenced by the choices made by other governments” (also see Berry & Berry, 2007; Rogers, 2003).

In other words, policy diffusion is the movement of policy ideas that become a trend of successive unaltered adoptions of a practice, a policy, or a programme. Diffusion scholars are interested in identifying the patterns according to which policies spread across jurisdictions (Stone, 2003); frequently mentioned mechanisms (see Porto de Oliveira, 2021, p. 9) include coercion (when a policy is imposed externally), social construction (related to the socialization and legitimization of a policy), learning (when governments draw lessons from others), and competition (where governments adopt policies to position themselves better than rivals) (see also for instance Dobbin et al., 2007; Graham et al., 2013).

The diffusion concept is a useful lens for understanding how policy ideas spread and are adopted. Nevertheless, the classical literature on diffusion focuses almost exclusively on the relations between state actors and how different governments influence one another. In fact, this literature takes little account of agency. Meaning that the role of actors, i.e. individuals and organizations, in diffusion processes is often overshadowed by a state-centric view (see Biedenkopf, 2021, p. 193). The literature offers ideas on the mechanisms at play between governments, but one must take for granted that these mechanisms are driven by actors within governments (politicians, bureaucrats, advisors) who interact with one another. As this perspective is dominated by a strong state-centric view of government policymaking, the potential roles of organizations, such as consultancy firms, are generally hardly considered (see Graham et al., 2013; Stone, 2004).

Within this conceptual frame, we derive that consultancy firms often act as advisors or go-between non-state actors. In this scenario, we derive that consultancy firms operate as state contractors, i.e., hired hands to support governments with the identification, analysis, and adoption of new policy concepts previously applied in other jurisdictions that appear attractive to state policymakers. State actors remain in control, but consultancy firms play a role in their coercive, competitive, socializing, or learning interactions. This also brings us to derive consultancy firms’ potential biases towards who contracts them, i.e., in this case the state, when they are advising on policies.

Transfer and mobilities: the role of consultancy firms as messengers of ideas

Scholars such as Rose (1991) and Dolowitz and Marsh (1996, 2000) critiqued classical diffusion models for their lack of attention on the object being diffused and on the actors that have a role in driving diffusion. Policies travel for reasons beyond emulation between states. There exists a more explicit agency asserted by state and non-state actors in moving and manipulating objects such as policy ideas. In turn, they suggested a policy transfer approach, which focuses on the object of transfer and agency. The proposed definition of policy transfer that we espouse is that it is “the displacement of information, knowledge, ideas, paradigms, and so on, about policies, administrative arrangements, institutions and ideas in one political system (past or present) for the development of policies, administrative arrangements, institutions and ideas in another political system” (Stone et al., 2020, p. 1).

One variant of policy transfer is policy mobilities. This variant offers a lens on how ideas are displaced between varying geographies (see McCann, 2011; McCann & Ward, 2011; Peck & Theodore, 2015). It focuses on the geographical motion of policies; its instantaneity and connectivity differing from transfer literature (see McCann, 2011). We find this pertinent, as consultancy firms are actors working within and between different spatial geographies.

For our research, policy transfer and mobilities offer a fruitful perspective that brings attention to the object and actors that drive unchanged policy ideas from one context to another. Dolowitz and Marsh (2000, p. 9), for instance, presented an extensive list of actors involved in transfer, including consultants but without making their potential roles concrete.

We therefore offer a re-interpretation of the transfer and mobilities approaches to derive consultancy firms’ potential roles in moving unchanged ideas, or in other words, best practices, from one context to another. From this conceptual perspective, we see this role going beyond what state contracting authorities, i.e., clients, contract, and request to be diffused. From this angle, these lenses reveal an emerging role for consultancy firms as messengers in delivering unchanged ideas or what they consider as best practices from one context to another, and whether this action is executed coercively or voluntarily. These practices may create tensions around how consultancy firms perpetuate hegemonic and globalization practices. For instance, due to their role as messengers of unchanged or same ideas between varying contexts around the world.

Circulation: consultancy firms’ role as promoters of ideas

The less linear and more actor-centred notion of circulation is used as an alternative to policy transfer and diffusion (Hassenteufel et al., 2017, p. 79). In this perspective, the emphasis is on how ideas travel within a transnational complex system through connections between organizations and actors in all directions and at all levels (see Dezalay et al., 2002; Saunier, 2008). Policy circulation is as likely to be achieved by mechanisms embedded in economic markets and networks as by state hierarchies. Analytical scrutiny of markets and networks as a locus of policy circulation reveals the quite varied roles of non-state actors (private corporations and NGOs) (Stone et al., 2021, p. 174).

For our research, we find it useful to re-interpret the concept of circulation to frame how consultancy firms can play a proactive role in promoting ideas from and to all directions as they travel and connect different contexts and actors. The concept educes a vision where ideas travel from the Global North to the Global South, but can also travel from south to north, south to south, and so on (see Ardila, 2020; De Oliveira & Pal, 2018). Through this lens we suggest the role of consultancy firms as proactive promoters of ideas via global networks and economic markets. Furthermore, we can explicitly put into focus the interests behind the promotion of ideas, such as whether consultancy firms play a role in promoting ideas in order to develop networks and markets that favour their specific businesses, given their profit-driven characteristics. What we mean by markets is the buying and selling of knowledge or expertise in exchange for money and in competition. We use the term markets to emphasize that consultancy firms are economic actors and driven by profit. This in turn reveals tensions around perpetuating marketization and self-interest. By marketization, we mean the exposure of consultancy firms to market forces, i.e. the economic factors that affect the price of, demand for and supply of their services.

Translation: consultancy firms’ role as re-interpreters of ideas

The insights offered so far do not focus on what happens when policies arrive to or are adapted into new contexts (see Hassenteufel, 2005). That is where the concept of translation has added value. By this we mean a “process of reformulation of policy problems, orientations and proposals in a different language and context” (Hassenteufel et al., 2017, p. 81).

The translation lens sheds light on how ideas are reformulated and recontextualized depending on where and how actors intend to download ideas in different contexts. Through this lens, we see consultancy firms’ role in translation as their re-interpretation of policy ideas in new contexts. For instance, foreign consultancy firms re-interpret global policy ideas in local contexts under the influences of the local stakeholders with whom they cooperate. In this vein, private consultancy firms are akin to re-interpreters of ideas. They are not merely messengers moving unchanged ideas between contexts. Nevertheless, these consultancy activities can involve a range of tensions where their re-interpretations might not be fit for new contexts and certain local actors might resist adopting these new ideas. The way in which private consultancies re-interpret new ideas is influenced by their epistemic backgrounds and interests. Meaning, that their overall knowledge background such as their education influences how they re-interpret new ideas. As well as their interests, such as economic or client satisfaction interests. As for the contextualization of ideas, this depends on how consultancy firms engage or not with stakeholders in a new context, as well as how stakeholders resist or collaborate. We therefore derive the tensions related to interest-driven contextualization when consultancy firms take-on roles as re-interpreters in varying contexts.

Methods and data

Systematic literature review

In the previous section, we delved into diffusion-related concepts and derived a set of potential roles that consultancy firms can play in the diffusion of policy ideas, and the tensions that may arise. To observe how these roles are interpreted and realized, we performed an SLR for the environmental and water governance field. In this section, we first introduce how we implemented the SLR and analysed our empirical findings. We then present the results of the SLR on what we know so far about consultancy firms through an environmental governance lens with a specific case on the water sector. Subsequently, we provide our analysis of what we have uncovered through the SLR by using diffusion-related concepts to make sense of empirical evidence on the capabilities, objects, spaces, and dilemmas to which consultancy firms relate in the diffusion of policies.

We carried out the SLR following the Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA) protocol (see Moher et al., 2009). We performed a search on 5 August 2022 on the search engine Web of Science. We operationalized our research question using the following keywords: Consultants, governance, or policy, and water-related terms. We chose to search for peer-reviewed papers where the keywords appeared in the title, abstract, author keywords, and Keywords Plus of the papers using the search command Topic Searches (TS).

The final search string was: TS = ((“consultant*” OR “consulting” OR “consultanc*”) AND (“govern*” OR “poli*”) AND (“water” OR “wastewater” OR “groundwater” OR “aquifer” OR “wetlands” OR “adaptation” OR “resilience” OR “SDG*” OR “environment*” OR “sustain*” OR “climate” OR “sanitation”)).

Paper selection, screening, and coding

This search string resulted in 1,936 hits. We manually added nine papers that were either cited in the search results or suggested by ourselves or other scholars during review processes. We added these papers as they were not captured by the search but were indeed presenting perspectives related to consultancy firms and environmental governance. We then screened the 1,945 papers based on titles, abstracts, and full texts using a set of eligibility criteria. Figure 1 presents the steps taken to identify, screen, select, and include a final set of articles to review. Our final set included 95 articles reviewed for this paper.

Fig. 1
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PRISMA flow diagram (adapted from Moher et al., 2009)

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Data management and analysis

Using Microsoft Excel spreadsheets, we listed the 95 papers and classified them by year of publication, journal, regions studied, as explicit or implicit studies on environmental consultants, and as empirical or conceptual studies. This allowed us to obtain an overview of the literature referring to consultants navigating environmental governance and more specifically the water sector.

We then coded the 95 papers deductively and inductively based on qualitative data analysis methods proposed by Glaser (1978) and Miles and Huberman (1994). We deductively coded papers using the roles derived from policy diffusion concepts. In other words, we developed conceptually driven codes based on our analysis framework (second section). For instance, where we could observe papers presenting evidence of consultants playing a role as a state contractor derived from the classical diffusion concept, we coded the paper as ‘Classical diffusion: State contractors’. Moreover, we coded for what was being diffused and what we refer to as objects, meaning any ideas, tools, and solutions that consultancy firms engage with and diffuse. We also coded for dilemmas, meaning any tensions or trade-offs, handled by consultancy firms in the diffusion of objects. In addition, we inductively coded for themes that recurrently emerged during the analysis. In other words, we developed data-driven codes for recurring themes. These themes elicited distinct types of capabilities of consultancy firms, which refer to their power, skills, ability or quality to accomplish certain tasks. Finally, we coded for the spaces navigated by consultancy firms, which encompass jurisdictional, institutional, sectorial, societal and geographical dimensions. For the detailed codes, descriptions and examples, see the codebook in Online Appendix A.1. The codebook was iteratively pretested between co-authors until sufficient intersubjective understanding was reached. The coding was implemented fully by the first author.

After coding the papers, we looked for patterns in the studied literature and grouped the co-occurrence of the meanings connected to the codes in the papers in question and analysed these. For the complete summary of our coded dataset, please refer to Online Appendix A.2.

Results: from the diffusion of objects to consultancy dilemmas

Descriptive overview

It is important to note that very few papers related to consultancy firms specifically engaged with the water sector (16 papers on water, sanitation, coastal and delta management). Only half of the papers shortlisted in the SLR regarding the wider environmental sector explicitly presented research findings with the research goal of exploring consultancy firms’ roles. Other papers had a different research focus but included implicit perspectives on consultancy firms among other types of actors or other concepts in environmental governance. We therefore included those papers but acknowledge that little has been published so far with an explicit focus on researching consultancy firms (only 38 of the 95 papers see Fig. 2I). What we mean here is that we included papers which presented roles of consultants which resulted in the total of 95 papers. However, only 38 of those papers were studies that had a clear focus on consultants. The other papers had other research aims, but we could find parts of the study that revealed consultancy roles, hence included these. Finally, most papers were empirical studies (92%) versus conceptual studies (8%).

Fig. 2
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Number of papers: (I) with explicit or implicit focus on consultancies; (II) studying cases on specific continents; and (III) temporally distributed

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The set of 95 papers was found in 78 different journals. As we were searching for what had been published at any period, we found that the oldest paper was published in 1993 with an increasing trend of an emerging literature referring to consultancy firms up until the year of our search. The temporal distribution is shown in Fig. 2III. Additionally, we looked at the geographical location of consultancies’ activities in the studies. Most papers covered Asian cases (25%), followed by European cases (22%) and international or global perspective papers (21%). Only three papers covered South American cases: in Ecuador (see Taber, 2020), Guatemala (see Dougherty, 2019), and Colombia (Howland & Francois Le Coq, 2022). The most covered countries were United States (8), Sweden (6), and Australia (5). However, the regions covered were also quite scattered (see Fig. 2II).

After classifying the 95 shortlisted papers, we coded them to highlight patterns in the observed objects diffused by consultancy firms, spaces they navigated, types of capabilities, and their dilemmas in environmental governance. Table 2 summarizes evidence discerned in the SLR papers regarding the roles and dilemmas derived from the four diffusion-related policy concepts. We also included the number of papers that touched upon these issues, as papers can and do address multiple issues. All the columns contain findings derived from papers framed with a specific conceptual focus (e.g., diffusion, or circulation); however, these separations can also be contested, as we later describe cross-cutting observations.

Table 2 Summary of evidence: objects, spaces, capabilities, and dilemmas of consultancy firms distilled from the SLR based on the policy diffusion lenses
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The following sections further unpack the initially distilled evidence interpreted from the SLR relating to objects, spaces, capabilities, and dilemmas of consultancy firms in the diffusion of policy ideas.

Objects

Most papers in our sample provide insights into the objects diffused (n = 91). Figure 3 presents the diverse range of objects such as ideas, tools, and technologies that consultancy firms explicitly or implicitly diffused and manoeuvred within environmental governance systems.

Fig. 3
figure 3

Number of papers on the diffusion of objects by consultancy firms. Note: SDGs = Sustainable Development Goals; CSR = Corporate Social Responsibility

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In the water sector, the main objects diffused (based on 16 papers) related to consultancy firms involved in diffusing water and sanitation management approaches (n = 11) (e.g., Armstrong & Jackson-Smith, 2019; Sanchez, 2019) and coastal and delta planning (n = 5) (e.g., Colven, 2020; Ultee et al., 2018).

We further uncovered indications on a wide range of buzzwords and trending environmental governance concepts that consultancy firms were involved in diffusing. For instance, we found several papers on diffusing broad influential global concepts such as Sustainability and the Sustainable Development Goals (SDGs) (e.g., Brès & Gond, 2014; van den Broek & Klingler‐Vidra, 2022), Resilience (e.g., Laeni et al., 2019; Leitner et al., 2018; Torabi et al., 2018; Weinstein et al., 2019), and Smart Cities (e.g., Kubina et al., 2021).

Employing our previously identified roles, we could further distil more detailed evidence regarding how objects are diffused by consultancy firms. For example, papers with a classical diffusion perspective gave evidence on objects originally imposed or influenced by the client. For instance, Scott and Carter (2019) presented a case where consultancy firms in the United States were hired by the state environmental agency to implement a water governance approach based on Integrated Water Resources Management (IWRM). Private consultants brought in a prefabricated object, the IWRM plans, as contracted by their client. The goal of the project was to design the IWRM plans in participative stakeholder workshops. Nevertheless, the final IWRM plans were less influenced by the inputs of the participating stakeholders during the workshops facilitated by consultants. Instead, the course of the IWRM plans was influenced mostly by the clients’ and consultants’ visions (for the case of water privatization in Berlin, see Beveridge, 2012).

On the other hand, papers with transfer perspectives rather reported on consultancy firms moving unchanged objects from one context to another, e.g., in the context of international cooperation. For instance, when private consultants from the Global North were hired to advise on sanitation solutions for the Global South, the consultants transferred centralized sanitation solutions in a context where these were considered inappropriate (see Gambrill et al., 2020; Gondhalekar & Drewes, 2021; Sanchez, 2019).

When we examined papers with circulation perspectives, we observed how consultancy firms promoted objects actively through networks and markets. For instance, van den Broek and Klingler‐Vidra (2022) showed how consultancy firms are part of an intrinsic boundary network, beyond states, involved in fabricating, influencing, and benefiting from the diffusion of objects such as SDGs concepts. In this sense, objects are promoted, manipulated, and even imposed by consultancy firms in different spaces influencing governance trends and their markets (see also Laeni et al., 2019; Leitner et al., 2018; Torabi et al., 2018; Weinstein et al., 2019). For instance, firms such as ARUP and AECOM play a strong role in spreading the idea of resilience. Leitner et al. (2018), present how we can view these firms as preachers imposing the “resilience gospel”.

Finally, for papers with translation perspectives, we observed how consultancy firms change, contextualize, and manipulate the objects as they bring them to a new context. For instance, Dutch consultancy firms have been involved in implementing collaborative scenario planning workshops to shape and adjust the Dutch Delta approach, the object, to the Mekong Delta context (see Hasan et al., 2019).

Spaces

The papers highlighted a wide range of spaces that consultancy firms navigate, hold, and connect while diffusing objects. We observed that consultancy firms are everywhere and particularly in the subtle in-between spaces. They are actors moving, together with objects they diffuse, within single jurisdictional or geographical scales as well as between or across these scales—for instance, between global, regional and local scales (see Fig. 4I, II, and III). Beyond their movement within and between these spatial spaces, consultancy firms navigate within and across a wide range of societal spaces—for instance, between public and private actors, civil society, funding agencies, and scientific community spaces (see Fig. 4IV). These firms seem to be everywhere in terms of geographies and actor networks. Yet, their prominent presence in these important spatial and societal spaces, i.e., environmental policymaking and governance spaces, raises the question of why there are relatively few explicit references and scientific studies (38 out of 95 papers) mentioning the roles of consultancy firms.

Fig. 4
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Number of papers including the spaces navigated by consultancy firms: (I) Single-scale vs. cross-scale perspective per paper; (II) Single scale: distribution of focus levels; (III) Cross-scale: Focal trajectories between scales; (IV) Societal spaces

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Figure 4 presents an overview of consultancy firms’ activity spaces derived from the papers in our sample. We emphasize the number of papers where consultancy firms navigate single and cross-scales (see Fig. 4I). We zoom into the papers where we observed specific single scales they navigate such as the National scale (see Fig. 4II) and cross-scales, for instance, Global-to-local (see Fig. 4II). On Fig. 4IV, we present the number of papers presenting societal spaces navigated by consultancy firms, such as public actors spaces.

The papers in our sample related to water governance issues mentioned mainly consultancy firms working at levels outside regular administrative and territorial scales, such as the public utilities level (e.g., Mugabi et al., 2007), between federal government and river basin levels (e.g., Moellenkamp et al., 2010), and at transboundary spaces (e.g., Lamb, 2014).

Drawing on the previously derived roles from the various conceptual diffusion lenses, we observed considerable overlap between spatial patterns. Nevertheless, distinct patterns did become apparent: in line with the assumptions that we made based on classical diffusion literature, several contributions in our sample, such as Elgin et al. (2012), focused strictly on levels of government. They highlighted the ways in which consultancies navigate within or between these and serve as a source of information for governmental actors.

Other studies went beyond these classical bureaucratic scales and spaces and instead focused on specific functional governance spaces and interlinkages between these. Papers following a transfer perspective, for instance, highlighted the engagement of consultancy firms active in advising at city scale based on their global best practices (e.g., Weinstein et al., 2019). Others, fuelled by ideas of circulation, departed even further from established policy scales and located consultancies in spaces such as global networks and markets. One example of such networks is the 100 Resilient Cities initiative (e.g., Leitner et al., 2018). Such networks serve as transcending spaces, through which consultancies may promote governance ideas between global and local levels and between diverse institutional public and private spaces. Finally, some contributors following a translation lens took a broader perspective and focused on spaces between civil society actors, government actors, and global scales, particularly in international cooperation settings. Consultancies in these spaces are usually hired by international development agencies and donors from the Global North to advise in Global South spaces between government levels and civil society (e.g., Koch, 2020). In these spaces, they move between various interests and stakeholders that lead them to manoeuvre ideas according to project objectives, stakeholders that they do or do not engage, and dominant interests.

Capabilities

The papers offer many empirical insights distinguishing six types of capabilities of consultancy firms that give empirical meaning to the roles derived through our four diffusion-related concepts. These are: trusted facilitators; reactors to environmental policies; shapers of environmental policies; market drivers; public participation managers; and interest navigators.

Papers categorized as presenting classical diffusion perspective revealed consultancy firms’ capability as trusted facilitators and reactors to environmental policies. These firms are hired by governments as trusted partners to implement environmental regulations (see Owen, 2021). Their role is seen primarily as implementing the needs stipulated by their contractors. For instance, Fisher (2008) and Owen (2021) described how consultants are hired to implement social environmental impact assessments with clients who have an interest in seeing that projects go through. This presents a more reactive, and at times biased, characteristic towards client demands and implementing client needs. As another example, Broström and McKelvey (2018, p. 189) found that consultants who are dependent on future contracts with government agencies may face informal control, leading to dependencies and internalizing policymakers’ interests, even without direct control, thereby leading to low expert autonomy.

On the other hand, papers categorized with a transfer or circulation perspective highlighted consultancy firms as proactive shapers of environmental policies. Consultancy firms do not merely react to policies or their contractual mandates with their clients, but assert levels of agency around the flow of environmental information and innovations (e.g., Dearing et al., 1994). Those contributions viewed consultancies as asserting a level of agency in delivering objects that go beyond their client mandates for various reasons (e.g., Bouteligier, 2011; Feser & Runst, 2016; Thoradeniya et al., 2020), thereby influencing and shaping environmental policy processes globally (see Stone et al., 2020) and locally (see Dearing et al., 1994) through delivering borrowed innovations or global best practices to new contexts (e.g., Gambrill et al., 2020; Khirfan et al., 2013; Taber, 2020). For example, Khirfan et al. (2013) described Canadian consultants’ role in exporting Canadian urban planning approaches to the Middle East.

Studies categorized with a circulation perspective often went one step further and characterized consultancy firms as market drivers. They are presented as proactive trendsetters that can in turn benefit their own consultancy markets (see Leitner et al., 2018; Thoradeniya et al., 2020). For example, Carballo-Penela and Castromán-Diz (2015) referred to the proactiveness of Spanish environmental consultancy firms in promoting the sustainable development concept. Consultancy firms develop tools and their markets, i.e., a demand for their tools, through their strategic involvement in networks. Aronczyk and Espinoza (2019) referred to consultancy firms as an epistemic community capitalizing on selling knowledge, acting through their networks, and using their public relation strategies to set environmental trends.

Papers categorized with a translation perspective highlighted two different types of capabilities of consultancy firms in diffusion processes, one considering—as participation managers –more the policy process itself, and the other—interest navigators—emphasizing rather the policy content. As project implementers, several contributions shed light on how consultancy firms have leverage in managing who does and does not participate, ultimately impacting the kind of knowledge included in, or excluded from, projects (e.g., Khirfan et al., 2013). We found examples of consultancy firms manipulating stakeholder participation processes, which can be socially inclusive or exclusive, leading to exclusion and marginalization of specific ways of knowing (e.g., Lamb, 2014; Moellenkamp et al., 2010; Scott & Carter, 2019; Weitkamp & Longhurst, 2012).

Apart from this gatekeeping function for process participants, consultancies may play important roles as interest navigators and participants in policy processes themselves, as various papers highlighted. Consultancy projects may involve engaging with many different stakeholders and their respective interests. This also means taking a role in adjusting project ideas or giving advice based on the interests expressed and dominated by different stakeholders. Consultants may take on an implicit role in contextualizing and legitimizing results to meet the needs and interests of certain groups (e.g., clients) (see Lidskog & Löfmarck, 2016). Studies have presented cases where the work of environmental consultants consists in packaging and presenting information in a way that is most useful and favourable for their clients (Taber, 2020; Weitkamp & Longhurst, 2012). This may be influenced by interests around project approvals, securing future projects, and compliance with regulations (e.g., Lamb, 2014).

Dilemmas

Through our analysis of consultancy firms’ different roles and capabilities in the diffusion of policy ideas, we also uncovered a number of tensions and goal conflicts—i.e., dilemmas—that those actors have to handle. The papers presented evidence suggesting four types of dilemmas around: biases; decontextualized global practices; market interests; and manipulative practices.

Considering their role as state contractors which we derived from the classical diffusion literature, we indeed found that consultancy firms are seen as neutral actors and trusted facilitators (see Capabilities) in the policy advising space. Yet, at the same time, our analysis shows them acting in a biased manner in relation to clients or other stakeholders such as the regulating entity, the regulated entity, or somewhere in between these two (e.g., Beveridge, 2012; Chanthy & Grünbühel, 2015; Owen, 2021; Scott & Carter, 2019; Spiegel, 2017; Taber, 2020). Some cases presented evidence on how consultancy firms are restricted to implementing projects pre-orchestrated by their clients (see Beveridge, 2012; Bouteligier, 2011; Owen, 2021; Scott & Carter, 2019). Or in other words, as Dewan’s (2020) study contended, they are requested to work in a way that reproduces scripts and agendas from clients such as donors. Consequently, as Weitkamp and Longhurst (2012, p. 113) found: “Consultants are conservative in their choice of consultation methods, choosing approaches that minimize the risk to clients’ desired outcomes.”

On the other hand, taking a policy transfer or mobilities perspective and viewing consultancy firms’ role as messengers, studies reported how consultancy firms are sought out for their global expertise but may impose their expertise without contextualizing their advice (e.g., Gondhalekar & Drewes, 2021; Larner & Laurie, 2010; Rapoport & Hult, 2017). Clients are interested in the best practices that they can deliver to specific contexts (e.g., Kubina et al., 2021). However, consultancies may tend to promote solutions based on their international experiences, perpetuating one-size-fits-all solutions that do not cater, and are not tailored, to specific contexts (see Stone et al., 2021). In the Gambrill et al. (2020) study, consultants tended to endorse centralized sanitation infrastructure solutions established in the Global North, but that were not ideal for many of the contexts in which they were supposed to be implemented in the Global South. Consultancy firms might end up asserting epistemic authority where their advising has more legitimacy and credibility than local knowledge (e.g., Lidskog & Löfmarck, 2016). These are examples of consultancy firms delivering solutions as one-way transactions that overpower or dismiss local contexts and local expertise. This may lead to a lack of project implementation and tensions with project stakeholders.

In line with the perspective of consultants as promoters or market drivers of policy ideas derived from policy circulation, we could highlight dilemmas around market interests from our sample. Several authors emphasized the tension in consultants’ work between promoting beneficial socioenvironmental policies for society and catering to their own profit-driven motivations as participants in an economic global market system (e.g., Taber, 2020; Thoradeniya et al., 2020). For instance, Bouteligier (2011) showcased how consultancy firms may not only push concepts considered beneficial for sustainable development, but rather also enforce discourses that benefit the growth of their own markets. Another way in which evidence around this dilemma was presented was around how consultancies may engage in different forms of lobbying (e.g., Clapp, 2005; Opoku et al., 2015) or agenda-setting (e.g., Dewan, 2020; Webber et al., 2020) that may enhance their market competitiveness.

Finally, some of the publications we retrieved contained evidence on the manipulative practices of consultancy firms. We collected this evidence based on the translation perspective and the role we derived as re-interpreters. Consultancy firms are hired for their skills in tailoring ideas, technologies, and solutions to specific contexts and needs. However, they might also consciously or unconsciously manipulate project directions, as well as include or exclude stakeholders in their advising processes (e.g., Lamb, 2014; Moellenkamp et al., 2010; Scott & Carter, 2019; Weitkamp & Longhurst, 2012). Dougherty (2019) referred to consultancy firms as double agents that might steer a project based on the interests of their client, other stakeholders, or their own. Papers further highlighted how consultancy firms might not be entirely familiar with the contexts in which they are working and might intentionally or unintentionally exclude certain actors or types of knowledge during the process of a project (e.g., Khan et al., 2018). However, Sardo and Weitkamp’s (2017) study showed how consultants face challenges of limited resources and time constraints that can restrict the scope of many consultations. Properly involving project stakeholders, navigating and mediating differing interests, and arriving at an agreed contextualized project direction requires sufficient time and resources. This limiting factor is shown to be a dilemma faced by consultancy firms when contracted to implement projects with large scopes but limited resources (also see Lidskog & Löfmarck, 2015, 2016).

Discussion

What have we learned?

Our SLR of 95 individual papers has highlighted the objects, spaces, capabilities, and dilemmas of consultancy firms in the policy process, examined through the conceptual lenses of policy diffusion, transfer/mobilities, circulation, and translation. We have found indications of governance ideas, i.e., objects diffused by consultancy firms relating to environmental and water governance ideas, tools, and technologies. These objects are diffused, but we could also highlight how consultancies interact with and manoeuvre these.

Consultancy firms operate and thrive in the in-between spaces, especially transcending established political-administrative scales, with agency in diffusing objects through these thresholds and connecting spaces and stakeholders. We could observe all the conceptually derived roles. Our SLR, however, also highlighted consultancies’ great leverage and capability in interpreting these roles, making them active participants in policy processes. Even considering the most basic role ascribed to them, as government contractors, from a classical policy diffusion perspective, consultancies execute great agency, serving not only as reactors to clients’ demands, but also as active trusted facilitators. This proactive potential of consultancy firms became even more apparent when examined through a translation or circulation lens. These perspectives better portray what might be happening when consultancy firms are contracted to adjust and manipulate policy ideas to arrive at the implementation of policies in specific contexts. Hence, these perspectives are open to the insertion of further pieces in the conceptual puzzle, including the substance of the diffusion object itself, various intersecting spaces, and consultancies’ active self-interest and pro-activeness in a networked governance system.

Additionally, we have highlighted how the different roles and capabilities are subject to different trade-offs and tensions, i.e., dilemmas. These offer important insights into the potentials and constraints of this actor within the policy process and, hence, offer practical insights into the potentials and pitfalls related to this. Many of these arise from consultants’ overlapping and/or conflicting loyalties with their clients, policy addressees, and the public, or their own self-interest. These become especially apparent through the circulation and translation lenses.

Overall, we have observed that consultancy firms are an overlooked, but important, actor in the policy process. They slip into the cracks of the policy-diffusion-related perspectives at times. We consider that this is because consultancy firms work in the in-between spaces. They are everywhere and in-between, but extremely opaque in environmental governance research. Additionally, they have an incentive structure, for instance profit-driven motivations, that does not fit the usually considered governance actors, such as governments or non-governmental or civic actors, i.e., they are not stakeholders in the classical sense. Their stake is less derived from the policy idea itself, and more policy process related, such as policy implementation.

To fully understand the impact of these differences, our study has offered some insights that might be useful for the different lenses. For the classical diffusion lens, our study contributes a new perspective by incorporating consultancy firms’ roles and dilemmas. Policy diffusion is not only when ideas are emulated between states, but also when actors, such as consultancy firms, have a proactive role towards the state as partners in the diffusion of ideas. However, states contracting consultancy firms as their partners are shown to be perpetuating biases through contracting the implementation of pre-orchestrated policy agendas. On the other hand, we offer insights for the transfer and circulation lenses where consultancy firms are proactive actors shaping the movement of policies between contexts, and this can perpetuate policy globalization and hegemony—for instance, in the act of promoting the same best practices around the globe, even more so based on market interest motivations. Nevertheless, our study provides the insight for the translation lens that consultancy firms are in fact key hidden in-between actors that play a significant role in contextualizing and applying policy ideas, versus simply transferring unchanged policy ideas. We provide insights for the policy translation lens around consultancy firms’ significant roles, along with the dilemmas related to the private sector being involved in manipulating policy ideas and participation.

Of note are the capabilities and dilemmas relevant to the translation and circulation concepts. The SLR helped us demonstrate consultancy firms’ capability in diffusing global expertise to specific local contexts revealed by the transfer concept. However, the transfer concept does not predict what the translation concept does, that is, what happens to new policy ideas when consultancy firms bring them to new contexts. How do private consultants re-interpret global expertise, manage public participation, and navigate interests to download policy ideas? The translation lens seems to better portray what might be happening when consultancy firms are contracted to adjust and manipulate policy ideas to arrive at the implementation of policies in specific contexts. This, of course, comes with biases influenced by interests: How do consultancy firms re-interpret policy ideas and how is this influenced by biases and interests? How evident are market interests in influencing how private consultancies advise on policy ideas? The circulation lens also sheds light on the proactive market interests that exist in the consultancy spaces and how neoliberal interests influence their activities.

We recognize that these are very initial hints observed in the SLR through diffusion lenses. In fact, there is a large gap in the literature and therefore potential to explore these capabilities and related dilemmas, particularly for the water governance field. This would allow us to enhance our reflexivity on modern consultancy practices and offer practitioners policy advice on their practices, whether for the contracting entity or the consultancy industry itself, and for the water sector and beyond.

Limitations

We acknowledge limitations in this review paper. First, thematically, we narrowed our focus to those studies focusing on or mentioning consultancy firms in environmental and more specifically water governance. By doing this, we discovered a large gap in the literature focusing on such firms’ roles, particularly in water-related governance. This, of course, omits a wider literature on the role of consultants, such as management consultants, in governance systems in general (see Howlett & Migone, 2013; Hurl & Vogelpohl, 2021; Saint-Martin, 2004). Nonetheless, given its often technical nature and the large involvement of consultancies in various policy activities, we believe that our study focusing on environmental governance can also inform broader perspectives on private consultants’ roles in governance and public policy spheres. Recognizing this limitation, we stress, however, that the objective of this study was to uncover past research related to private consultants in the fields of environmental and water-related governance specifically.

Second, as Mallett et al. (2012) pointed out in their paper on the benefits and challenges of using systematic reviews, we also acknowledge methodological limitations related to data availability, data exclusion, and subjectivity. We included only academic journal articles listed in the Web of Science database, omitting grey literature and possibly other publications from other databases. Although this might entail some issues of data availability and exclusion, this approach is justified for two main reasons (see methods section in Derwort et al., 2019). Firstly, as we aimed for the consolidation of the present academic body of research, we targeted peer-reviewed publications. Second, this strict approach strengthens the transparency and replicability of our review.

Third, we explicitly chose to focus on research published in the English language and, therefore, used a search string in English, as well as in our inclusion and exclusion criteria. This poses a limitation which excludes potentially relevant papers in other languages, particularly research from the Global South.

Fourth, the first three authors rigorously discussed and reviewed the overall search strategy, string and codebook. Nevertheless, most of the review was implemented and interpreted by the first author. Ultimately, the decisions to include and exclude papers were subject to the first author’s interpretation of the criteria. Similarly, the first author was the main coder and interpreter in the analysis of the shortlisted papers. We therefore acknowledge these limitations around subjectivity.

Conclusion and future research agenda

The recent academic debate has recognized the prominent role of the private sector in government affairs. In fact, consultancy firms have exponentially been sought out by governments, ever since we entered the New Public Management era. Nevertheless, only a few exceptional studies, mostly on management consultants, have fully explored this actor’s roles in influencing governance and policymaking processes. To deepen our understanding of consultancy firms’ roles, and to begin to remedy this blind spot in the literature, we conceptually explored their roles in the diffusion of policy ideas, particularly for the environmental and water sector. We engaged with and re-interpreted the concepts of policy diffusion, transfer/mobilities, circulation, and translation and applied these to 95 papers shortlisted from an SLR.

Through our SLR, we found that the volume of research on consultancy firms is scarce and scattered, as most papers (57 out of 95) remained implicit about the roles played by consultancy firms. Moreover, we see a large gap in researching consultancy firms’ roles in environmental and especially water governance (16 out of 95).

Nevertheless, when engaging with the four policy-diffusion-related concepts in our SLR, we made sense of objects that consultancy firms move and manoeuvre, and the wide range of jurisdictional and societal spaces that they navigate and connect. We identified six initial types of capabilities of private consultancy firms: (i) trusted facilitators; (ii) reactors to environmental policies; (iii) shapers of environmental policies; (iv) market drivers; (v) interest navigators; and (vi) participation managers. In relation to those, we further observed four types of dilemmas around: (i) biases; (ii) decontextualized global practices; (iii) market interests; (iv) manipulative practices.

Future research may empirically explore, substantiate, and refine the types of capabilities initially uncovered and further highlight how these impact the implementation of policy ideas and their markets, within and beyond the water and environment sectors. Given these empirical findings, there is potential to conceptualize dilemmas around consultancy practices at local, global, and international cooperation level. Such a conceptual contribution would provide valuable reflexivity and points of attention for the consultancy industry and the governance system of which they are part. Another avenue of research might look into the conditions under which these dilemmas play out in different ways and identify settings in order to mitigate risks and tensions that may rise from engaging consultancies in a policy process.

We would also like to point to a need for more Global South perspectives in researching the roles of private consultancy firms, particularly for empirical cases in the Global North–Global South context. Although many client–consultancy relationships are found in the realm of international cooperation, the literature identified here was rather sparse and mainly of Northern origin. However, more equitable research and ultimately governance practice will need more diverse perspectives on this topic, including more researchers, case studies, and theoretical concepts from the Global South. In addition, there is a need to explore the potentially strong levels of agencies that consultancy firms seem to assert in shaping and re-interpreting policies, as well as how networks, markets, and other stakeholder interests can influence biases in the activities of consultancies and vice versa. Overall, there is a need to shed more light on these implicit asymmetries in incentive structures and relations between consultancy firms, their clients, and the communities in which they work.

Other potential avenues for further research are to look into the types of consultancy firms according to size and to whether they are transnational, national or local, for instance. There would be value in exploring whether different types of consultancies and specific roles have dominated and grown since the 1990s. Going even further on who consultancies are, there is much potential in looking into who the main senior consultants from different firms are based on their previous work experience in the public and private sectors, level of internationalization of their careers, whether they are specialized versus generalists, etc. This could also be a relevant variable in studying how consultancy firms diffuse policy ideas.

Suggested future research questions could include: Do specific types of consultancy firms tend to make policy ideas travel in specific ways? To what extent and why do consultancy firms adopt and transnationally circulate modern paradigms? How do consultancy firms apply certain paradigms in their advice-giving operations and to what extent do they adapt such applications to local contextual circumstances? What are the different kinds of dilemmas that consultancy firms face in their practice, how do they recognize these, and how can they handle them?