With decreasing expenditure and increasingly complex societal demands, Ministries of Foreign Affairs (MFAs) have a unique challenge in public administration cutback management. In an attempt to...Show moreWith decreasing expenditure and increasingly complex societal demands, Ministries of Foreign Affairs (MFAs) have a unique challenge in public administration cutback management. In an attempt to heed this challenge, MFAs can try to use the external shock of a budget cutback to foster innovation within the ministry, in an effort to increase productivity with less resources. This research takes a closer look at the Dutch Ministry of Foreign Affairs, in the period from 2010 to 2020, a full cyclical period from cutbacks to re-investments. Taking an explanatory research approach, in which ten key officials from the ministry have been interviewed, this research provides a model which theorizes the relationship between cutbacks and innovation. I then operationalize this relationship through five organizational factors (perception, flexibility, organizational agility, power dispersion and historical leadership) and five contextual factors (munificence, turbulence, social capital, goal ambiguity, and professionalism). Of these factors, turbulence and goal ambiguity positively affect creativity in innovation while they negatively affect implementation of innovations, while the rest of the factors stay constant between both phases. The factor historical leadership, however, mitigates the negative effect of turbulence and goal ambiguity in the implementation phase. For the Dutch MFA, the cutbacks have had a positive influence on innovation at the ministry, particularly because of perception, flexibility and historical leadership. For similar cases abroad, or for future cutback rounds, it would therefore be advisable to maximize those factors in a chosen cutback management strategy and start already laying the foundations for historical leadership to develop. Further research, by doing a comparative case study between MFAs, could compare the effectiveness of the factors objectively and further complement a ‘handbook’ for cutback strategies vis à vis innovation in foreign policy.Show less
