Theoretical Faith and Practical Works: DeAutonomizing and Joining-Up in the New
Zealand State Sector
Paper prepared for the SCANCOR Workshop, in conjunction
with the Structure and Organization of Government Research
Committee of IPSA, on ‘Autonomization of the State: From
Integrated Models to Single Purpose Organizations’, Stanford
University, 1-2 April 2005
Bob Gregory
School of Government
Victoria University of Wellington
Wellington
New Zealand
Email: Bob.Gregory@vuw.ac.nz
(Draft only, please contact the author before use)
2
Abstract
New Zealand has now entered the stage of ‘second generation’ state sector reform.
Legislation passed by Parliament in December 2004, signals a major attempt to
overcome problems resulting from the structural fragmentation that resulted from
the ‘first generation’ reforms of the 1980s and 90s. After five years in office, the
current government is seeking to strengthen the centre’s ability to enhance the
accountability of so-called ‘arm’s length’ agencies (crown entities) and safeguard
standards of ethical probity across the state sector as a whole (as distinct from the
Public Service as such). The government has also introduced reforms to enhance a
‘whole of government’ capability based on greater inter-organizational
cooperation in the quest to achieve officially sanctioned policy outcomes rather
than simply producing departmental outputs. However, despite these statutory
initiatives, the central institutional features of the first generation reforms remain
largely unaltered. Consequently, the new moves will require high levels of
political skill on the part of senior state sector executives. Further, while the first
generation reforms were shaped by a coherent (if inadequate) theoretical
framework, in the form of public choice and agency theories, the latest changes
are essentially pragmatically reactive, driven by political experience and
administrative practice, and only implicitly acknowledge the shortcomings of the
original theoretical design. The New Zealand experience carries implications for
the relationship between theory and practice in public policymaking for state
sector development.
3
Introduction
New Zealand has now entered the stage of so-called ‘second generation’ state
sector reform. ‘First generation’ reform comprised the radical changes introduced
from the mid-1980s to the early 90s, and which established New Zealand’s place
as a world leader in the movement that later became known as New Public
Management. These reforms involved a massive programme of privatization of
publicly-owned utilities (including the telecommunications services, railways, the
national airline and the Bank of New Zealand); the corporatization of government
trading organizations in the form of state-owned enterprises (SOEs); the creation
of a plethora of stand alone single-purpose crown entities (as they are called) not
in the Public Service as such and thus not subject to direct ministerial control; the
separation of departmental policy advice from departmental operations (service
delivery); the monitoring and review of senior executive performance; the ‘outsourcing’ of many public goods and services; the formalizing of contractual
relationships within the executive arm of government; and the abolition of a
central state sector personnel function and the delegation to agency chief
executives of responsibility for staff employment in their own organizations (see,
for example, Boston et al, 1996; Gregory, 2001; Norman, 2003; Scott, 2001).
The architects of the first generation reorganization drew upon bodies of
theoretical knowledge to inform their new designs, probably more so than similar
reforms undertaken in other countries, and certainly much more than had been the
case during earlier governmental reforms in New Zealand. In particular, they
believed that public choice theory, agency theory and transactions costs analysis
provided them with the theoretical tools that would enable them to transform New
Zealand’s governmental landscape in ways that would render an increasingly
‘bureaucratic’ system at once more efficient, accountable, responsive and
effective. As one commentator has observed of this period, ‘If ever a country has
been run by economists, it was New Zealand’ (Kay, 2003: 61).
Not surprisingly, however, experience during the 1990s showed that New
Zealand had not in fact created a governmental utopia. The centre-left coalition
4
government, elected late in 1999, probably took a cue from the New Labour
government in Britain, which had begun to pull ‘Next Steps’ agencies back closer
to the centre (Office of Public Services Reform, 2002). The New Zealand
government established a Standards Board to advise it on problems that had been
emerging in the state sector during the late 1990s. The original reforms had
focused on issues of accountability and efficiency at the operational level of
government, but in creating an ‘arm’s length’ relationship between the political
executive and government agencies, and in their concern for structural
disaggregation, they attenuated strategic capability. So while the government was
left with the role of ‘steering’ the ship of state, those who did the actual ‘rowing’
often pulled on their oars in ways that impeded the political executive’s steering
ability.
A year or so after the creation of the Standards Board the government released a
key review of the state sector – the Review of the Centre (2001) 1 – which in turn
led to the enactment by Parliament late in 2004 of both new and amending
legislation aimed at strengthening ‘whole of government’ strategic capacity, by
overcoming problems of excessive structural ‘fragmentation’ and ‘siloization’, the
weakening of longer-term executive and managerial capability, and the
attenuation of a coherent state sector ethos.
This paper suggests that it will be difficult to adequately fulfil the aspirations
that lie behind the new legislation so long as some of the main architectural
components of the first generation New Zealand reforms remain in place. It
discusses why the government is reluctant to make more radical changes, and
argues that the theoretical foundations of the original reforms were based on
ideologically-driven and largely self-fulfilling assumptions about bureaucratic
behaviour, which have become strongly institutionalized. The New Zealand
experience highlights enduring questions about the relationship between theory
and practice, and science (or scientism?) and politics, in state sector reform.
1
See ‘Review of the Centre’ at http://ssc.govt.nz
5
The latest legislative changes
The State Owned Enterprises Act 1986, the State Sector Act 1988, and the Public
Finance Act 1989 continue to stand as the three statutory pillars of New Zealand
central government. The new legislative package comprises four separate
enactments, three of which amend the foundational legislation while the other is a
new statutory entity now constituting the fourth central component of the state
sector legislative framework.2
The State Sector Amendment Act (No 2) 2004
Before the first generation reforms the State Services Commission (SSC) was the
government’s central personnel agency, administering a unified career service,
with standard pay rates and working conditions right across the state sector. This
major, long-standing, function was abolished by the reforms, and responsibility
for personnel policy (within common standards) was delegated to the chief
executives of each state sector agency. They could ‘hire and fire’ as they
individually saw fit. An early attempt to create a Senior Executive Service as a
cadre of top executive talent within the Public Service as a whole soon fell by the
wayside as chief executives became understandably preoccupied with the
personnel requirements of their own separate agencies.
The new amending Act empowers the State Services Commissioner to review
the machinery of government across all areas of government, and gives that
officer a wider mandate to build integrated capability and provide stronger
leadership in the maintenance of standards across the state sector as a whole.
Previously, the Commissioner’s writ extended only across the departments and
ministries comprising the Public Service. The Act entrusts the Commissioner with
the responsibility for promoting a strategy to develop senior leadership and
management capability in the Public Service, and gives him or her discretionary
power to do so across the whole of the state sector. In doing so the Commissioner
2
The Crown Entities Act 2004; The Public Finance Amendment Act 2004; The State
Sector Amendment (No 2) Act 2004; and the State-Owned Enterprises Amendment Act
2004. The last of these contains essentially technical provisions only and is not discussed
in this paper.
6
will now exercise shared responsibility with departmental chief executives, and
may at his or her discretion issue ‘guidance’ to chief executives of the Public
Service in developing senior leaders and managers in their respective departments.
The new legislation requires chief executives to ‘cooperate’ with the
Commissioner but to ‘comply with any reasonable request’ made by that officer.
This development reinforces what has been occurring over the past three years, as
the government has actively discouraged the use of outside consultants in favour
of growing in-house employment.3 (One large department had found that it did not
have sufficient competent staff to write its own annual report to Parliament.)
The government has expressed concern over the apparent attenuation of the socalled ‘public service ethos’, and there is also some evidence – albeit still
indeterminate – of increasing corruption in the New Zealand state sector (Gregory,
2002). Against this background the Commissioner has now been given a mandate
to set minimum standards of integrity and conduct across the Public Service and
crown entities (but not SOEs), and in the main agencies are required to comply
with such standards. Serious breaches of minimum standards may be reported by
the Commissioner to the responsible minister.
The Public Finance Amendment Act 2004
This Act, which the Treasury describes as a ‘major rewrite’ of the Public Finance
Act but ‘not a major reform’ (New Zealand Institute of Public Administration,
2005), is intended to provide an antidote to the effects of ‘siloization’. This is the
term commonly used in New Zealand to describe the propensity of departments
and agencies to focus on the production of their own outputs rather than to work
cooperatively in pursuit of policy outcomes which by their very nature demand an
integrated, ‘co-productive’, approach. The new Act is meant to better facilitate
‘joined-up’ government.
3
Just prior to the 1980s reforms there were about 90,000 public servants. By the late
1990s there were around 30,000. Today, the numbers have risen to nearly 40,000.
7
The most important change in this regard is that no longer will Parliamentary
appropriations necessarily be confined to one output class only. Resourceswitching authority will be devolved to public managers, enabling them to
respond to changing circumstances without first having to get Parliamentary
approval. But this is not seen to threaten the ability of Parliament to control the
ways in which public money is spent. To prevent that happening the Minister of
Finance is required to approve multi-[output] class appropriations, with the
justifications for them being provided in the Estimates (given to the House before
the appropriations are approved). In addition, the new legislation enables a
department effectively to transfer its appropriation for outputs to another
department. The department formally with the appropriation and doing the
‘purchasing’ from another department, retains the responsibility for the original
appropriation.
Although the outputs-based structure of the governmental budgetary process
remains intact, since it facilitates firm financial control, the Act reinforces the
‘managing for outcome’ moves that have taken place over the past two or three
years. These are intended to see that outputs are more systematically related to
desired policy outcomes, to better ensure that agency activities are better ‘aligned’
with the government’s objectives.4
The Crown Entities Act 2004
Described by its authors as a ‘world first’ and ‘path-breaking’ (New Zealand
Institute of Public Administration, 2005), this new Act is to enhance central
control over the large number of ‘crown entities’ established in the 1980s and 90s
as single-purpose, stand-alone, agencies, existing in an ‘arm’s length’ relationship
with the political executive, after being separated off from their original
departmental conglomerates. Today, together with the 35 government
departments, there are 17 SOEs, and about 180 crown entities. Crown entities and
SOEs almost invariably have their own individual empowering Acts of
4
Outputs comprise the work done by government employees; outcomes are the societal
effects that result from this work.
8
Parliament. These empowering statutes have usually said little or nothing about
the roles that the Ministers of State Services and Finance might have in
implementing ‘whole of government’ requirements, nor have they specified the
respective roles of ministers, crown entity boards, and departments relevant to
their functions and activities.
The Crown Entities Act 2004 changes this. In so doing it defines five types of
crown entities:

Crown Agents – non-company entities with a close working relationship
with the government of the day (for example, the Civil Aviation Authority
of New Zealand, and district health boards).

Autonomous Crown Entities – non-company agencies that do not require a
high degree of ministerial control but are still formally required to have
regard to the policy of the government of the day (for example, New
Zealand Lotteries Commission, and the Mental Health Commission).

Independent Crown Entities – non-company organizations that operate at
arm’s length from the government, either because they are quasi-judicial
or because they must operate and be seen to operate independently (for
example, the Commerce Commission, and the Electoral Commission).

Crown Entity Companies – which are established under the Companies
Act (for example, Television New Zealand Ltd, and crown research
institutes).

School Boards of Trustees.5
The Act standardizes the governance requirements for each class of agency, and
gives the government the power to direct the agencies collectively to comply with
5
There are about 2,600 school boards of trustees. The main components of the new Act
are not directed at this group of crown entities.
9
‘whole of government’ requirements or those aimed at improving public services.
In addition, the minister responsible for a particular Crown Agent may direct the
agency to ‘give effect to’ government policy that relates to the agency’s functions
and objectives, while a minister responsible for an Autonomous Crown Entity can
direct that agency to ‘have regard to’ government policy. But, as before, ministers
will have no power to direct an Independent Crown Entity on its statutorily
independent functions. Crown entity governing bodies are now subject to generic
provisions (such as ‘good employer’ and equal employment opportunity
requirements), and except in particular circumstances must comply with minimum
standards of integrity and conduct as set by the State Services Commissioner. In a
change reflecting public controversies in the late 1990s over remuneration
packages paid to some crown entity executives, the new Act requires statutory
entities to consult with the Commissioner when setting the terms and conditions of
employment for its chief executive, and enjoins the entity to ‘have regard to’ any
recommendations made by the Commissioner.6 Previously, the Commissioner’s
writ was confined to the Public Service in such matters. Further, the Act prohibits
the payment of compensation to executives for loss of office, and their
remuneration is now to be disclosed in the agency’s Annual Reports to
Parliament.
The new legislation also clarifies the reporting and accountability requirements
of crown entities, with a strong emphasis on the production of annual ‘statements
of intent’, which specify, inter alia, the entity’s functions and operations, and the
impacts, outcomes and objectives that it seeks to achieve. The Act makes clear
provision for the responsible minister in each case to be fully involved in the
shaping of these statements. The power to ‘hire and fire’ will continue to be in the
hands of the chief executives of these agencies, with direct accountability to the
respective governing boards.
6
See Gregory (2003) regarding remuneration issues and controversies in the New
Zealand public sector.
10
Managerial Alices in New Zealand’s political wonderland: the
quest for collaboration
Current state sector changes indicate that the pendulum of New Zealand state
sector reform is currently swinging back in the direction of enhanced central
power, away from ‘autonomization’. However, to use Pollitt’s (2004: 336) words,
it is like a ‘pendulum swinging on a moving vehicle, as the political, technological
and social landscape constantly shifts beneath the wheels’. A new resolution of
the traditional bureaucratic paradox is now being sought, one which will
supposedly find a new way forward between the imperatives of political and
organizational control on the one hand, and cooperative purposeful achievement,
on the other.7 The main strategic approaches used during three periods of New
Zealand public administration and management are summarised (at the risk of
oversimplification) in Table 1.
Period
Form of organization
Means of securing
compliance
Rhetoric
1912 to
mid1980s
‘Traditional’
bureaucracy
Integrated
hierarchies
Prescribed authority;
rules
Bureaucratic;
inefficient
Mid1980s to
late 1990s
Private sector
practices; quasimarkets;
competition
Separate and more
autonomous
agencies
The above, plus
financial incentives;
contracts;
performance
management
Results-oriented;
freedom to
manage; efficient;
customer-driven;
business-like
Networked
bureaucracy
Increased central
control over
mainly
decentralized
services
The above, plus
managed
collaborative interdependencies;
strengthening public
service ethos
Service-users;
partnerships;
managing for
outcomes; wholeof-government
Late
1990s to
present
day
Table 1: Three periods of New Zealand government administration and
management
7
See C Talbot (2004) for a wider discussion of the paradoxical nature of human beings,
but with particular reference to the paradoxes of governmental reorganization. He cites
Norman’s (2003) examination of the paradoxes at the heart of the New Zealand state
sector reforms.
11
The latest developments do not reflect a rejection of the principal components
of either the State Sector Act or the Public Finance Act. The changes must be
taken then as a form of ‘fine tuning’, which is to suggest that the problems they
are intended to address are not major ones, and do not have their roots in any
shortcomings in the foundational legislation. It is now simply a matter of
enhancing the ability of the centre to steer, even though the ‘arm’s length’
principle, particularly in regard to crown entities, remains intact, and of striking a
better pragmatic balance between the two conflicting imperatives.
The new moves suggest that while ‘fragmentation’ and ‘siloization’ are
problems, they are not overwhelming problems, and that the chosen remedy is
proportionate to the size of the problem. In any case, what is termed ‘siloization’
is – like fragmentation – an age-old bureaucratic tendency, since it is impossible
to have formal organizations without defined boundaries and in-bred cultures and
collective mind-sets. In earlier times, in New Zealand as elsewhere, governments
sought to enhance ‘coordination’ among its inherently self-absorbed agencies, by
means of inter-departmental committees and such like, despite the strong
tendencies of individual committee members to place the interests of their own
organizations ahead of the collective good.
The latest changes sit well with the contemporary fascination with
‘collaborative’ government, working ‘co-productively’ in partnership, and by way
of both formal and informal networks, as much as directive coordination, in
pursuit of governmental purposes. Indeed, the Review of the Centre itself
promised ‘super networks’ to facilitate such cooperation, and ‘circuit-breakers’ to
grapple more spontaneously, creatively and effectively with intractable problems
of service delivery, particularly in areas of social policy. Alas, however, the
trumpeted heralding of ‘super networks’ has not been followed by their actual
appearance, and after two or three promising ‘circuit-breaker’ exercises that
initiative has been put into abeyance. Why? The reasons are as yet to be fully
disclosed, but it would hardly be surprising to learn that they have a lot to do with
the fact that when conflicts arise between the need for organizational turf-
12
protection, on the one hand, and for inter-agency collaboration, on the other, chief
executives may be relied upon to resolve them in favour of the former rather than
the latter.8 And why would they not do so? Their own performances will be
assessed primarily against their ability to deliver on the ‘output classes’ for which
their particular organizations are responsible under the Public Finance Act. It is
relatively easy to lead an organizational horse to the waters of collaboration but
much harder to make it drink.
Will the latest changes work?
Such willingly collaborative enterprise depends on high levels of mutual trust,
shared risk-taking, and good will among the top executives and managers of
governmental agencies. If the economists are correct, it will also be encouraged by
the use of effective incentives. But because of the Public Finance Act will
continue to underpin a performance regime based on the need to produce outputs
it is hard to see how exhortations to collaborate will override incentives which
discourage, not encourage, such action.
Moreover, if departmental chief executives are now to be held at least partially
responsible for the co-production of policy outcomes, under the new ‘managing
for outcomes’ philosophy, this will inevitably run counter to what has always been
heralded as a central principle of New Zealand’s quest for clear accountability,
namely, that individuals cannot be held accountable for outcomes over which they
have little or no control.9 As Schick (2001: 16) has observed, ‘…New Zealand
takes accountability seriously. It is not an afterthought or a byproduct, but the
central thread of the New Zealand model’. To this end, the first generation
reforms were intended to clarify roles and responsibilities, the better and more
The State Services Commission (2004) reports that, ‘Originally a second round of
Circuit Breakers was intended, however this has not proceeded…Selected Chief
Executives were invited to nominate problems for a Circuit Breaking approach. Three
possible problems were put up, but proved unsuitable.’
8
9
According to Scott (2003: 163), one of the main designers of the first generation
reforms, ‘Chief executives should be held liable for the job they are actually employed to
do in a particular department facing particular challenges at a particular point in time, and
not in terms of some generic statement of their responsibilities.’
13
fairly to hold responsible parties to account for their performance. The desire for
clear accountability is to be traded off against the need for the collaborative
pursuit of policy outcomes. This pragmatic response is no bad thing, and at the
very least it indicates a long overdue awareness that no amount of governmental
reform anywhere, at any time, is capable of the simultaneous maximization of
multiple and conflicting values. But it sits uneasily, to say the least, with the
official claim that the Public Finance Act, which continues to be the solid
foundation stone of an artificial outputs/outcomes bifurcation, is ‘fundamentally
sound’ (State Services Commission, 2004a: 1). Such rhetoric is an example of
what Brunsson (2002) calls ‘organizational hypocrisy’ – which includes the
willingness of (and often the political need for) organization members to say one
thing while doing another.
The negative consequences of his bifurcation also play out in the ‘arm’s length’
relationship originally considered desirable (on the basis of public choice
assumptions) between ministers and their departmental heads. While this in and of
itself may indeed have allowed the political executive to focus more on its
‘steering’ role, in conceiving of ministers as (mere) ‘purchasers’ of outputs the
Public Finance Act has overemphasized the operational side of government at the
expense of the political. In so doing it has had the effect of impeding rather than
enabling the political executive’s ability to steer. One consequence of this has
been the increasingly important role played by political advisers in ministers’
offices. While there are certainly some advantages in this development, which was
probably inevitable in any case, especially in an age of political ‘spin doctoring’,
it reflects ministers’ desire to strengthen their grip on effective levers of political
power. And it is also consistent with the fact that since the first generation reforms
departmental chief executives have been appointed more for their managerial
capacities than for their political and policy advisory skills.10
10
The norm now is for Public Service chief executives to complete a five-year initial
term, followed by a three-year term. Hardly any have not had their contracts renewed, or
been dismissed before the expiry of their first contract. New Zealand’s employment
law renders any such termination very difficult. Thus, although ‘permanent tenure’ has
been abolished, an eight-year term of office for a chief executive is tantamount to
permanency.
14
The replacement of departmental heads’ permanent tenure by the introduction
of fixed-term renewable contracts was intended to make top public servants more
responsive to the political executive, yet without ‘politicizing’ the Public Service
in ways that would threaten its professionalism, ‘neutrality’, and willingness to
provide ministers with ‘free and frank’ advice. Whether or not such a balance has
actually been achieved remains an open question (James, 2002). The results of
surveys conducted by this author among Public Service chief executives, in 1995
and 2004, suggest that the politico-bureaucratic nexus has become increasingly
reminiscent of the ‘Image I’ model depicted by Aberbach et al (1981).11 In other
words, the policy-administration (management) split may well have become more
institutionalized, consistent with a more ‘arm’s length’ relationship characterized
by formal, contractualist, imperatives rather than high levels of mutually
cooperative trust.12
Today, departmental heads see themselves not as one component of a symbiotic
political partnership but as members of an executive class charged with the
efficient operational management of the ‘machinery of government’. Over the past
several years political blame-shifting games have become more publicly apparent.
When things go wrong ministers are now more inclined to answer to Parliament
by giving assurances that matters will be put right, while at the same time seeking
to ensure that blame is sheeted as far from ministerial offices as is reasonably
possible. This type of response is hardly new, and as always the working
relationships among ministers and their departmental chief executives are strongly
influenced by the individual personalities involved. However, the effects of
blame-shifting games are exacerbated under a contractual/arm’s length situation,
the more so when – as is the case in New Zealand – a much more fluid and
The ‘Image I’ model is based on the classical politics-administration dichotomy,
whereby politicians determine the shape of public policy and their officials occupy
themselves with its ‘implementation’. The results of the author’s survey will form the
basis of a forthcoming article, in preparation. See too Wilson and Barker (2003) regarding
a similar situation in Britain.
11
12
Some departmental chief executives also hold, by virtue of their appointment to that
role, statutory positions which require them to exercise independent professional
judgment – for example, the Commissioner of Inland Revenue (who is also chief
executive of the Inland Revenue Department).
15
uncertain political environment has emerged under the new Mixed Member
Proportional electoral system, which reflected widespread popular concern over
the dominance of the New Zealand political executive under the former First-Pastthe Post system (Gregory and Painter, 2003). Public servants today probably feel
less confident of political support when their actions are exposed to critical public
scrutiny, and staff morale suffers accordingly. And departmental heads now vie
for their minister’s attention, partly in competition with ministerial political
advisers, while ministers – concerned more with their political and policy agendas
rather than with purchasing outputs and assessing executive performance – have
sought to re-establish both strategic and tactical control over the ‘machinery of
government’, and to ensure greater ‘alignment’ between agency and government
objectives.
This introduction of proportional representation electoral system has brought
Parliament squarely back into the policymaking arena (Boston et al, 1999). It has
also rendered much more uncertain and complex the political environment in
which the heads of state sector organizations have to work. It has, in short, created
a situation in which these executives require high levels of political nous and skill,
to complement their managerial abilities. For these reasons the current quest for
collaborative ‘joined-up’, or ‘whole-of-government’ strategies will be successful
to the extent not only that the right structural incentives are in place (which they
are not), but also to the degree that those who will be required to carry it through
have the requisite skills, temperaments, and capacities (which they probably do
not have).
Departmental collaboration: the case of biosecurity
Public administration scholarship has for many years understood the essentially
political nature of the task of building organizational mission, among constituents
both within and beyond the organization’s formal ‘boundaries’ (Long, 1949;
Selznick, 1957; Lewis, 1980; Wilson, 1989; Carpenter, 2001). In this context,
Wilson has defined autonomy as ‘relatively undisputed jurisdiction’ (1989: 183),
no doubt mindful of the fact that if any public organization has full autonomy then
its functions are probably trivial and innocuous. The quest for autonomy is a quest
16
for legitimacy, and it is usually unceasing, often fraught, and always essential. It
does not depend solely or primarily on statutory empowerment but on the political
capacities of those charged with shaping, promoting, and sustaining over time a
sense of collective organizational purpose. It is not about management, it is about
leadership. The concerns over turf protection displayed by many of the agencies
involved in the recent establishment in the United States of the Department for
Homeland Security illustrates in the grand manner the intensely political character
of this endeavour. But despite these battles, which will continue to be played out
intra-agency rather than inter-agency, it is scarcely conceivable that after 9/11
such a vitally important function could have been left to the separate agencies
making up the Federal bureaucratic landscape in Washington, DC.
New Zealand’s security problems are much less pressing than those of the
United States. But they are nonetheless real and vitally important to the country’s
economic and social well-being as a vulnerable trader in international markets. It
may not be stretching a point too far to suggest that the New Zealand
government’s biosecurity responsibilities are the rough equivalent of those faced
by the American government in homeland protection. But in the two jurisdictions
different organizational means have been adopted to undertake these two crucially
important functions. Whereas in America the government has established a superbureaucracy in its attempt to secure effective collective action, in New Zealand
positive biosecurity outcomes are expected to result from the collaborative
willingness and capability of executives and managers located in largely
autonomous departments with distinctly different primary missions. For many
years biosecurity (the name itself has been adopted only very recently) was in the
hands of a number of government departments and agencies, all responsible for
different but related dimensions. This approach worked tolerably well, but
provided inconsistent risk assessments and prioritization, inadequate analysis and
dissemination of information, weak strategic capability, and ability to learn from
past mistakes. Nor was there any single agency in control of the system. Structural
‘fragmentation’ in the system has been identified as a major problem, reflected in
the inevitable games of bureaucratic turf-protection.
17
Now, in light of the growing complexity of biosecurity issues, more threats to
New Zealand’s economic and environmental interests, and the need to ensure that
the country fully meets its international biosecurity obligations the government
has given the Ministry of Agriculture and Forestry (MAF) the lead role in
implementing a new ‘whole-of-biosecurity’ approach, and responsibility for
achieving a broad-based set of outcomes. However, these outcomes will be
achieved (better to say, that these standards will be maintained?) only if MAF is
able to secure effective collaboration among, in the first instance, four central
government departments, all of which have very powerful, and largely
independent, missions and responsibilities – MAF itself, the Ministry of Health,
the Department of Conservation, and the Ministry of Fisheries. And all of which,
under the Public Finance Act, have clear duties to produce a range of different
outputs, with finance appropriated under four different Votes. It has been made
clear that MAF will not directly control these activities, so the extent to which
these disparate outputs can be transformed into consistently effective biosecurity
outcomes will depend on its ability, for which the chief executive is to be held
primarily accountable, to ‘actively seek opportunities for collaboration’ and
ensure that any such collaboration is effective (Stocks, 2004: 4). The principal tool
being used to this end consists of a set of memoranda of understanding between
MAF and the other three organizations.
One might venture to suggest that this new biosecurity strategy will continue to
work tolerably well. But if and when something goes badly wrong, not only will
there be the spectacle of dramatic blame-shifting games played out in the political
arena, with public servants more unfairly exposed than ever before, but a new
structural reorganisation will inevitably result. This will probably involve the
creation of a new single-mission biosecurity agency.13
13
A former Labour cabinet minister, no longer in Parliament, recently observed publicly
that, ‘Accepting ministerial responsibility is never popular, but it’s a dead duck with this
government’ (The Dominion Post, 1 March 2005, p. B4.) His comments were made
during a controversy over the activities of an educational crown entity.
18
More generally, it is unlikely that the current moves towards ‘whole-ofgovernment’ strategies for the achievement of policy outcomes can be optimised
so long as the outputs/outcomes bifurcation in the Public Finance Act remains in
place. This invention is the major flaw in the original architecture of state sector
reform in New Zealand, an explicit statutory reinforcement of the goal-displacing
tendencies inherent in all bureaucracies. It is little wonder that in their attempts to
constructively resolve the fundamental paradox of bureaucracy no other countries
have followed New Zealand’s lead down the outputs/outcomes path. This road to
a rationalistic heaven of financial accountability is also beset by too many
associated pitfalls. These include the separation of policy from operations; the
dangerous divorce between the government as owner and as purchaser, as funder
and provider; and at the political-bureaucratic nexus, the supplanting by a stilted
legalistic contractualism of symbiotic relational contracts based on mutual trust.14
More palliative than cure?
The main risk with the latest moves towards strengthening the centre in pursuit
of ‘whole-of-government’ objectives is that they will turn out to be more palliative
than curative. Instead of addressing head-on the distortions that arise out of the
outputs/outcomes split the government has given the State Services Commissioner
a wider mandate to enhance the influence of the centre across the state sector as a
whole. However, this central sheriff has been ‘armed’ with statutory six-guns that
may fire the odd real bullet but could well fire mostly blanks. The
Commissioner’s new powers are as much persuasive as mandatory, and so their
effectiveness will depend to a large extent on that official’s political abilities to
engender the sort of cooperation from departmental and crown entity chief
executives that will be needed to achieve a really meaningful impact. Certainly the
Commissioner’s efforts will be reinforced by the force majeure that flows from
the political executive’s commitment to reasserting the centre, but that will not be
a constant in the re-centring equation.
14
The practical weaknesses of some of these conceptual inventions, especially the
application of a quasi-market model, have been demonstrated most strongly in the
provision of New Zealand public health services, where such reforms have now been
largely rolled back (Gauld, 2001).
19
The current changes too reflect a shift in power balances between the central
agencies. There is no doubt that the Treasury was the principal architect of the
reforms of the 1980s and 90s, whose shape and character was dictated by that
organization’s missionary focus on economic and financial management. Now,
the SSC (whose functions were eviscerated by the first generation restructuring) is
to be, potentially at least, a key player in the reassertion of the centre. This
development will almost certainly enhance power struggles between these two
central agencies, based primarily on the conflicting requirements for fiscal
stringency, and the acknowledged need to develop and sustain state sector
capability.15
Be that as it may, and looking at the overall picture, it is almost as if the
government believes it can successfully repair what are major structural fissures
by papering them over. The main reason why the outputs/outcomes split is central
to the New Zealand state sector architecture is that, as Schick (2001: 16) has
observed, ‘…more than any other country, New Zealand takes accountability
seriously’. Too seriously, we might say. If an outputs-based accountability regime
is considered to be indispensable because it ensures that the performance of
‘agents’ can be assessed against clearly specified and easily measured output
targets then, as the New Zealand experience has confirmed, accountability is
literally purchased at the cost of magnified goal displacement. On the other hand,
if the current move towards ‘managing for outcomes’ is able to enhance interagency effectiveness, and ‘whole-of-government’ alignment, it will do so only by
reducing ‘clear’ accountability, or – particularly when things go wrong – by
unjustly imposing specific accountabilities where none are realistically available.
Similarly too, the task allocated now to the State Services Commissioner to
revivify a coherent and unifying ‘state sector ethos, or ‘Public Service ethos’,
Newberry (2002: 326-7) argues that the Review of the Centre’s belief that the current
public management system in New Zealand is ‘a reasonable platform to work from’ is
‘demonstrably wrong if the current government’s objective really is to “maintain and
strengthen the State Sector.”’ She concludes that departmental ‘resource eroding
processes’ were deliberately built into the government’s financial management system
and ‘function in a manner highly consistent with a privatisation strategy.’
15
20
involves strengthening organic dimensions that have been whittled away by the
strongly mechanistic approach of the original reforms (Gregory, 1999; 2001). But
again the question is: are the latest changes commensurate with the size and nature
of the problem they are meant to overcome? Reorganizing the New Zealand state
sector using means derived strongly from rational choice models of political and
bureaucratic behaviour may to a very significant extent have created the
difficulties they were intended to remove. And until there is more structural
change that by its design implicitly challenges if not rejects these ‘rationalistic’
foundations then present-day reformers may find themselves whistling into the
wind.
When set against the background of questions like these it may seem that of
equal if not more significance in the move back to more ‘joined-up’ governance
has been some direct restructuring over the past three years, whereby the
government has put back together that which was once rent asunder.16 It has
amalgamated three Public Service organizations to form the current Ministry of
Social Development, the country’s biggest government department, and has acted
similarly, though not as extensively, in the areas of education, housing, justice,
and transport. These restructurings united policy ministries with some of their
relevant operational departments. In making these moves the government has
implicitly deemed that any problems stemming from ‘provider capture’, as posited
by the public choice theoretical tenets that underpinned the original reforms, have
been less important than the need to reconnect, for their mutual benefit, policy
ivory towers with street-level experience. Now, in the move to so-called
‘evidence-informed’ policymaking, it is being recognised that those working at
the ‘coal-face’ have important experiential knowledge to offer.
All this notwithstanding, the current shift back towards the centre is marked by
an air of unreality similar to that which surrounded the original reforms. It is as if
it were driven by people who still have a vested interest in the original statutory
16
Despite the comprehensive nature of the original reforms the total number of
departments and ministries has remained relatively constant, around 36 to 40, during the
past 15 years. There are about 70 Votes in the Parliamentary appropriations for the output
classes that generated by Public Service departments.
21
architecture, and who are unwilling to acknowledge that the problems they are
now trying to address result not from shortcomings in implementation but from
fundamental flaws in the original design. The outputs/outcomes distinction is
mirrored in the equally contrived purchaser/provider split, and is connected
strongly to the use of quasi-markets for competitive service delivery, and to the
purchasing agreements (between ministers and their chief executives), but which
are not real contracts at all. Some major difficulties have emerged in this outsourcing regime, including allegations of fraudulent spending of public money,
and a breakdown in relationships between departmental funders and nongovernment providers of social services (Report of the Community and Voluntary
Sector Working Party, 2001; Controller and Auditor-General, 2003). There is a
reluctance to acknowledge that experience virtually everywhere – including in
New Zealand – shows that effective working relationships between ministers and
their top bureaucrats depend not so much on formal contracts but on mutual trust,
that good government depends more on political judgement and wisdom than on
managerial measurement, and that any political executive will tend to see itself
more as a mover and shaker of society than as a sterile purchaser of bureaucratic
products.
Why the large gap between political rhetoric and restorative
action?
The original reforms were theoretically informed, radical in their conception,
comprehensive in scope, and authorized quickly by the opportunistic dominance
of the political executive (Goldfinch, 2000; Aberbach and Christensen, 2001;
Gregory 1998). For these reasons the New Zealand reforms, although widely
studied and in some places even admired, have nowhere been emulated. By
comparison, the latest changes are pragmatic, incremental, much more slowly put
together, and – in keeping with the proportional Parliamentary system introduced
in the mid-1990s – given a much more deliberative passage through the
legislature.17 In fact, on the face of it, it is surprising that they have been so long in
coming.
17
The two main parties of the right in Parliament, National and ACT (The Association of
Consumers and Taxpayers), opposed parts of the new legislation, including the
incorporation of the Fiscal Responsibility Act 1994 in the new Public Finance Act, the
22
When in opposition the Parliamentary Labour Party in the late 1990s was
vociferously critical of aspects of the reformed public sector, especially when
some highly controversial ‘golden handshakes’ were paid to some top
governmental executives. It gave a clear message that on becoming the main party
in a new coalition government it would take serious remedial action. It was even
implied that several departmental heads would find their contracts terminated. So
why has the action fallen quite a way short of the rhetoric? There are several,
interconnected, reasons.
There is the obvious reason that there are too many sunk costs in the system
that emerged from the original reforms. Certainly there is an official view that the
New Zealand state sector has experienced too much restructuring (Mallard, 2003).
This argument is not inconsistent with a rational choice interpretation of how
legislators in one era may seek to limit the options of their successors in another
(Horn, 1995). Yet to understand why the foundations of the original structure are
being left in place once has to dig a bit deeper.
First, New Zealand’s state sector edifice, like New York’s Guggenheim
Museum, may be subject to essentially cosmetic change, but like architect Frank
Lloyd Wright’s spiral design, it cannot be radically altered without destroying the
original concept. The design is the building, as surely as the reforms are the
system. Schick (2001: 3) rightly observes: ‘Unlike most countries which assemble
reforms as if they were putting together lego blocks, in New Zealand, taking away
a critical element, such as the output orientation, would strip the system of its
magnificent conceptual architecture’.
Secondly, the ideas that underpinned the original reforms have become strongly
entrenched in the thinking of New Zealand policy elites. While state sector
shortcomings may in fact be greater than the government seems willing to admit,
because they result from fundamental design flaws, the original concepts and
shift to multiple output classes, and the possible weakening of executive accountability to
Parliament inherent in the move to managing for outcomes.
23
ideas have – in ideological and rhetorical terms – taken on a life of their own. The
reality of the New Zealand governmental system has been increasingly socially
constructed, and is that much stronger for it. If, for example, the words ‘outputs’
and ‘outcomes’ were once absent from the lexicon of institutional design, and
meaningless in the discourse of the designers, today their meaning is not only
taken for granted but is solidly concrete in its effects.
Thirdly, the political impact of the neo-liberal reforms of the 1980s and 90s has
endured in New Zealand, where the centre has shifted to the right, largely because
of the susceptibility of the deregulated New Zealand economy to the impact of
globalization and the portability of international capital.18 A Labour or Labour-led
government in New Zealand has only once before achieved three or more
consecutive terms in office, and the current government is now eyeing this
possibility – indeed probability – leading up to the 2005 general election. The
original reforms were based on a neo-liberal belief in the need to reduce the ability
of the state to ‘intervene’ in the social and economic marketplace. The state sector
legislation passed at the end of 2004 indicates no resolve on the part of a centreleft government to radically reverse that intention. Instead, fully consistent with its
wider quest for the ‘third way’, it has settled in state sector management for what
it feels is a more comfortable balance between its powers of control, on the one
hand, and its exposure to political risk, on the other. The quest for this new
balance is well illustrated in the case of the Building Industry Authority (BIA), a
crown entity whose main function of regulating building construction standards
was hived off from departmental embrace in the early 1990s. Three years ago
political blame-shifting games ensued after it had become clear that standards of
housing construction had declined badly, leaving thousands of New Zealanders
living in homes inadequately insulated against the effects of the weather. In 2004
the functions of the BIA were absorbed back into a newly created Department of
Building and Housing, under full ministerial control.
18
For example, in the 1970s, after two decades of full employment, an unemployment
rate of 4.5% in New Zealand would have been politically disastrous. Today, it is a source
of great political comfort.
24
Finally, Pollitt (2004: 330) rightly notes that, ‘…the grass on the other side is
always greener. We choose one particular way of organizing…and then, as we
experience its character, we begin to see the advantages of its opposite’. His
invocation of Hood’s (1998: 11) anthropological view of ‘mutual antagonism
among opposites’, is well supported by current evidence of New Zealand state
sector reform, especially regarding the move by the centre to create and grasp
more effective levers of control over crown entities. Yet such shifts do not occur
in a political vacuum, as if guided by a proverbial ‘invisible hand’. The wider
political context in which this shift from autonomization is occurring in New
Zealand also says something about the relationship between theory and practice in
policymaking on state sector change.
Faith and works: learning from the New Zealand experience
The New Zealand experience of state sector reform in the years since the mid1980s is interesting, not just in its own terms but also as a study of the relationship
between theory and practice in public policymaking. The extent to which the
architects of the original reforms eschewed practical experience in favour of
abstract and largely untested theoretical ideas should not be overstated, but it is
generally accepted that as economists they were persuaded by the elegance and
parsimony of rational choice approaches rather than by the seemingly more messy
and ambiguous old institutionalism characteristic of mainstream public
administration scholarship.
There was a direct correlation, in fact, between the extent to which the original
reforms were shaped by a largely coherent body of theory drawn from the rational
choice stable, on the one hand, and their radical and comprehensive scope, on the
other. In a discussion of C E Lindblom’s enduring contribution to public policy
theory the author has elsewhere argued that there is no necessary relationship
between these two variables, and that the crucial element in determining the scope
of policy change is not so much the degree of formal theoretical knowledge which
informs the changes as it is the availability of political opportunity to adopt them
(Gregory, 1989).
25
In the case of the state sector reforms in New Zealand in the mid to late 1980s
both factors coalesced. By contrast, today the opposite situation prevails. The
latest changes are important if not radical, are pragmatically rather than
theoretically inspired, and their lengthy gestation (over the best part of three
years) stands in sharp relief to the ‘blitzkrieg’ approach which impelled the earlier
ones, and reflects – as discussed above – the political aversion to following
through on what might once have promised to be a new round of major structural
change.
New Zealand state sector reform over the past fifteen years comes reasonably
close to exemplifying Etzioni’s (1967) ‘mixed-scanning’ model of public
policymaking, whereby a radically comprehensive policy change or initiative is
followed by more incremental changes to it, over time. However, Etzioni’s
framework proposes little if anything about the relationship between the use of
theoretical knowledge in shaping policy and the scope of policy change. The New
Zealand experience, on the other hand, suggests that a priori theoretical
interpretations tend to take on a life of their own, as it were, by actually fostering
– in ways reminiscent of the ‘Hawthorne effect’ – the behaviour that they were
purportedly describing scientifically.
The original reformers believed that public choice and agency theories were
theoretical tools that enabled them to solve perceived problems such as ‘provider
capture’ of the political executive by egoistically self-interested bureaucrats who
were unresponsive to the will of the elected government of the day. Yet fifteen
years on an assiduous researcher could find as much if not more evidence to
support a thesis that these theoretical dimensions of the reforms addressed a
‘problem’ that – like the Sir Humphrey Appleby of television’s Yes, [Prime]
Minister – was a caricature of reality rather than an accurate description of it. Any
such researcher could also garner more than enough empirical evidence to support
an argument that these theoretical nostrums drawn from the reformers’ tool-bag
became instrumental in actually shaping rather than countering the sort of
behaviour by government officials that they aimed to prevent. Arguably, the first
generation reforms produced a type of official that they were intended to get rid
of, but who did not really exist in the first place. It is not just that the radical
26
structural changes authored by the original legislation produced the unintended,
but easily foreseeable, consequence of too much fragmentation, diminishing the
centre’s capacity to steer, and thus resulting in the latest round of reforms. Even
more interesting from the perspective of those who seek to understand better the
relationship between theory and practice in state sector reform, there is apparent a
remarkable unwillingness for the current reformers to reflect on the validity of the
original theoretical instruments (Gregory, 2003a). Instead, the original designs
continue to be publicly regarded as sound, even if the problems they gave rise to
and the latest responses to those shortcomings, suggest otherwise. In the
Orwellian language of the technocratic successors to the original architects, a
‘major rewrite’ of the Public Finance Act does not constitute a ‘major reform’.
Most if not all of the original architects have long since moved on to bigger and
better career paths, leaving their successors to deal with the impact of their
misplaced belief in the appropriateness and efficacy of rational choice theoretical
tools. The fact that their successors remain solidly committed to similar ideas, in
the face of evidence that might induce in many others a healthy scepticism of the
assumptions which underpin them, testifies to the extent to which ideas can
become so strongly institutionalised, and normalized, that they become
impervious to critical reflection. This can sometimes be readily explained by the
understandable desire of influential people to protect their careers and reputations,
and their capacity to do so when they themselves remain as significant gatekeepers of what constitutes ‘informed’ opinion. But even when they themselves
have departed the scene and their direct personal influence has greatly diminished,
the boundaries within which ‘informed opinion’ is defined remain intact, largely
immune from the challenges not only of alternative theoretical paradigms but also
of practical experience.
To reiterate, the negative impact of ‘fragmentation’ and siloization’, the
diminished capacity of the centre to steer according to ‘whole of government’
imperatives, the threat to longer-term public service capability, the endemic goaldisplacement fostered by the outputs/outcomes bifurcation and its associated
performance and accountability apparatus, to mention just some consequences of
the first generation reforms, are all interpreted as relatively minor shortcomings of
27
designs which are believed to be ‘fundamentally sound’. It is bad enough that at
the practical level such a Panglossian mindset diminishes the significance of these
difficulties, it is even worse that the theoretical frameworks from which they were
derived are not believed to be worthy of reconsideration at the same time as they –
albeit now tacitly rather than explicitly – dominate the thinking of contemporary
technocrats.
It is not that the mutually constitutive double-loop of theory and practice has
become disconnected at its nexus point. If that were so then theoretical reflection
would be totally insulated from practical experience, while the latter would be
driven by purely pragmatic action. Instead, what is occurring is reminiscent of
J M Keynes’ much-quoted observation that today’s practical men act as if driven
by the theories of long-dead academic scribblers. As Hay (2004: 60) argues, ‘In so
far, then, as the predictions of rational choice theory or neo-classical economics
conform to political and economic practice, it may well be because political and
economic actors have internalized precisely such theories, incorporating them
within their modes of calculation and practice’.
It is telling that New Zealand’s first generation state sector reforms included a
widely acclaimed move to institutionalize the political independence of its central
bank, through the instrument of the Reserve Bank Act 1989. This legislation
makes the organization amongst the most politically independent central banks in
any western country. Its independence is founded firmly on the monetarist tenet
that a high degree of certain, manifest, credible, and continuing political
independence is essential if the bank is to be able to keep inflation at prescribed
low levels. Certainly, the theory seems to have worked in New Zealand’s case:
from high levels in the 1980s inflation in New Zealand since then has been of the
order of three percent per annum. But what causes what? Does central bank
independence ‘cause’ low inflation, or are both low inflation and central bank
independence both a function of some other factor – for example, the political
power of so-called ‘financial markets’, which is an economic euphemism, in
effect, for rich people and institutions (Gregory, 1996)? As Watson (2002: 188)
argues, ‘…there can be no simple one-to-one link between central bank policy and
28
inflation performance. Yet the whole rationale for increasing [central bank
independence] is based on the assumption of such a link’.19
Among most monetarist theorists, in New Zealand as elsewhere, beliefs about
the need for high levels of central bank independence as a means of maintaining
financial stability have become ‘institutionalized “common sense”’ (Watson,
2002: 192, citing Mayer, 1999). There is little inclination to accept alternative
views, not so much because their falsity can be convincingly demonstrated but
because the theory to which the monetarists resolutely subscribe has become
sacrosanct – an article of faith rather than of science. It is, nevertheless, an
orthodoxy that has real political effect (governments are warned against adopting
policy options that would make financial markets nervous, but seldom against
those which may make poor people nervous).
What is true in regard to reflection on the theoretical underpinnings of New
Zealand’s Reserve Bank is also true of the country’s wider state sector reforms.
There is none. This fact may only be of largely academic concern were it not the
case that such unreflective commitment to theoretical tenets, to the extent that
they become strongly institutionalized, actually shape the behaviour that they
purport to describe.
In other words, the New Zealand experience of state sector reform, driven by
rational choice theoretical constructions, raises important questions about the ongoing relationship between science and politics (Gregory, 1998). There is no
space to pursue these here, except to say that what has been occurring in New
Zealand provides ample evidence in support of Hay’s argument:
Used judiciously and cautiously for a series of carefully specified purposes it
[rational choice theory] is a potentially powerful weapon in the armoury of
the critical policy analyst. Yet offered – as it so often is – as a universal
theory of (political) conduct, it prejudges the question of rationality,
commits itself to assumptions whose implausibility many of its exponents
freely admit, and renders redundant the critical question of the conditions
under which the rationality assumption is most likely to hold…there is a
clear danger of the self-fulfilling prophecy in such a totalizing meta19
See, for example, Posen (1993, 1995) for a cross-national analysis of central bank
independence which challenges this link.
29
narrative. For, arguably, rational choice models correspond most closely to
the reality they purportedly represent where they ‘describe’ the behaviour of
actors who have internalized rational choice assumptions (2004: 40).
As Hay suggests, the main reason why the architects of both first and second
generation state sector reforms seem impervious to alternative explanations and
interpretations of political and bureaucratic behaviour is to be found in their
educational backgrounds. In his words, ‘That models predicated upon rational
choice assumptions seem to have explanatory potential within economic systems,
may reflect nothing other than the prevalence of rational choice assumptions in the
mindsets of public policy-makers thoroughly immersed in neo-classical
economics since their undergraduate days’ (2004: 42).
It is hardly surprising that 15 years after rational choice instrumentalism
enjoyed its heyday in New Zealand public policymaking there has now emerged
the practical need to re-establish the status of the core public service, indeed the
wider state services, as a collective ‘whole-of-government’ entity, with a
reinvigorated ethos of public service and institutional capability. The drive to
‘autonomize’ state agencies has now to be supplanted by the urgent need to
integrate them in a way that will foster collaborative rather than competitive
endeavour. The current response is surely pragmatically rather than theoretically
driven, but it is a pragmatism that as yet remains too securely locked within the
theoretical framework that shaped the changes of the 1980s.
Conclusion: travelling forward while looking back
The autonomization of state agencies in New Zealand was a central feature of the
radical state sector reforms of the 1980s and early 90s, which were driven
essentially by a rational choice theoretical paradigm. This approach was fully
consistent with the neo-liberal political agenda that held sway in New Zealand at
that time, and which was concerned to reduce the scope of state involvement in
the economy and to ‘depoliticize’, in the pursuit of more efficient management, a
whole variety of governmental functions (Kelsey, 1995; Larner, 2000). The
architects of the reforms were strongly persuaded by the central tenets of public
choice and agency theory in reshaping the state. The latest, second generation
30
reforms, are intended to redress structural problems that were unintended
consequences of those changes, in order to enhance governmental capacity for
collaborative endeavour among its agencies. These current developments are
pragmatic responses intended to enhance the centre’s steering capacity, to render
state agencies more responsive to the political will of the government of the day,
and to increase its control of real and potential political risk.
The original reforms attracted world-wide attention, not only because of their
scope but also because of the apparent coherence and elegance of their theoretical
foundations. Never before in New Zealand, and probably nowhere else among the
western democracies, had so many radical structural changes been generated on
the back of so much elegant theory, in turn derived from so few unexamined
assumptions. If New Zealand was seen as a showcase heralding a new age of
‘scientific’ state sector reform then, perhaps unsurprisingly, it has proved to be a
largely false dawn. Experience confirms what commonsense says: that in all areas
of public policymaking, but especially in policymaking which addresses the
structure and role governmental organizations, there can be no apolitical fix. The
real challenge is not to be able to find certainty in theoretical prescriptions of any
kind, but to be able to ensure that all theoretical propositions remain subject to the
test of political experience, the better to reflect on them, revise them, and
intelligently transform them. A positivist scientific approach was adopted by the
original architects, at that time located in bureaucratic ivory towers insulated from
the hurly-burly of adversarial politics, and buoyed by their belief that their
theoretical certainties were essentially scientific rather than ideological.
Today, policymaking for New Zealand state sector reform is less technocratic in
character, more politically contestable, yet still strongly constrained by the legacy
of once dominant neo-liberal beliefs. When those ideas were in their ascendancy
in New Zealand, in the late 1980s, the corporatization of government trading
functions was to be a half-way house on the road to full privatization (a road that
indeed became well travelled). It remains to be seen whether, analogously, the
latest developments in New Zealand state sector reform – attempting
pragmatically to rejoin what was once rent asunder – will turn out to be a midway
31
point on the way to achieving the enduring collaborative capacity that is now
sought.
_________________________________________________________
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