New Zealand experience with public management reform—or why the grass is always greener on the other side of the fence☆

This article provides an analysis of how New Zealand has achieved the successes made to date, issues and problems yet to be resolved, and directions on how to address current shortcomings in public managment reform of the New Zealand model. Four issue pillars provide the framework for the analysis: Political—problems that are inherent to the political arena under a range of public management regimes; Incompleteness—problems that reflect that the system is incomplete in some areas, but that do not suggest inherent difficulties; Implementation—problems to do with the way the system has been implemented; Inherent—problems inherent in the New Zealand regime, but not necessarily in other systems. The overall conclusion drawn is that relatively few of the problems are inherent in the New Zealand model and that most problems fall under the first of the four issue pillars: politics. The author concludes that there is much to be done—but that it can be done within the framework of the Public Finance Act and the State Sector Act by changing how the system is operated.     

Campaigning and split-ticket voting in new electoral systems: the first MMP elections in New Zealand, Scotland and Wales

New electoral systems create learning problems for parties and electors: the parties have to learn how to focus their campaigns and the electors how best to use their votes. This was the case in three countries in the late 1990s where MMP was used for the first time rather than first-past-the-post: New Zealand in 1996 and Scotland and Wales in 1999. MMP involves each elector voting twice — for a candidate in a single-member constituency contest and for a party in a regional/national list contest. Survey and (in New Zealand) official data show that substantial proportions of the three electorates voted a split ticket — the candidate they supported was from a different party to that they voted for in the list contest. (Approximately one-in-five did this in Scotland and Wales and two-in-five in New Zealand.) We argue that split-ticket voting will be influenced by the amount of information received by electors regarding the candidates for the constituency seats. Using the amount of campaign expenditure by each candidate as a measure of the volume of information provided, we find strong supporting evidence for this responsive voter model in each of the three countries.     

Effectiveness: the next frontier in New Zealand

Central agencies face a critical test on how to approach the resolution of issues and problems related to improving the New Zealand public sector management systems from the author’s perspective. A decade has passed since the legislative changes were approved that initiated major financial management reform, and much of the initial reform energy has faded. It is time to assess what has and has not been achieved, and to search for ways to continue to move forward. There is a sense of anticipation, as well as some apprehension, across the New Zealand public sector, particularly in light of the election of a new Government. As New Zealand moves into a new phase of reform, one of the key challenges is to take advantage of what has already been achieved. New Zealand has one of the world’s leading public sector management systems, and should take advantage of that foundation. The key issue focused on in this article is effectiveness. A critical part of raising effectiveness is enhancing information. Better information is needed on outcomes, and it should be packaged in more accessible and relevant ways. More disciplined evaluation of the effectiveness of what is done is necessary. Systems that encourage public servants to raise their horizons should be improved or put in place. Managers who understand what they are doing and why are critical to reform success. Purchase agreements—or output agreements—will play a pivotal role, but they need to be improved. A fresh approach to output specification to better accommodate the range of output relationships that exist is required. Central agencies can facilitate customization of output specifications by being clearer about the basic output framework, and more flexible about how that framework is applied. Outcome measures should be refined and used along with outputs where feasible. Better ways must be found for managing problems of inter-agency coordination. Technology offers a new set of tools, but IT facilitates rather than creates effective relationships. Other coordination mechanisms that help agencies to communicate and to make trade-offs must evolve. New Zealand can move into a new phase of building a “world’s best” public sector. The public sector has an appetite for action at the moment, and a willingness to debate the issues. How this potential will be used is, to a great extent, the critical issue faced by the new Government.     

Reforming the public sector for leaner government and improved performance: The New Zealand experience

Over the 10 year period from 1984 to 1994 New Zealand has gone through an intense period of restructuring, both of the public sector and of the wider economy. In the process New Zealand has been transformed from a highly protected and regulated economy with a range of intrusive and expensive interventions, to an open and deregulated economy with an efficient and leaned down public sector. The article presents the “New Zealand experience” in restructuring, not necessarily as an example to be copied but as a benchmark to be used in examining the most appropriate restructuring to apply in other circumstances. The stages in the reform are described and the three key success factors set out. One of the key factors is the establishment of a set of clear principles which are then applied with determination. The principles developed in the New Zealand context are set out. The article examines the restructuring of the science sector in New Zealand as one case study; in part because of the author's personal involvement but also because it is a particularly complete example. Areas where work remains to be done are identified including the reforms in education and health and the need for collective action across government. Finally lessons to emerge from the New Zealand experience are discussed. These include especially putting time into fully understanding market characteristics before a market oriented reform is started, carrying reforms through to their conclusion rather than stopping partway, and establishing clear principles to guide the reform process.     

Measuring the Performance of Community Organisations in Queensland and New Zealand

The need to measure qualitative outcomes is well documented. This article argues that despite this recognition many programs are still evaluated using unreliable numerical indicators. This has particular ramifications for community service programs that deal with the sharp end of social problems. While the New Zealand government has instigated a comparatively detailed approval standards, the Queensland government's community service guidelines are still applied almost on an ad hoc, case by case basis. Both New Zealand and Queensland performance indicators are directed towards process outputs, with a primary focus of government being centred on financial accountability. The satisfaction of the client remains the core responsibility of the service provider, but there is little assessment of how successful programs are in meeting individual requirements. This article suggests that there needs to be the development of a more collaborative relationship between governments and community service organisations, to ensure both financial and social objectives are fully realised.     

Regulation is evil: An application of narrative policy analysis to regulatory debate in New Zealand

Using findings from research on the implementation of telephone number portability in New Zealand, we demonstrate how narrative analysis can account for how particular influence stories, or policy narratives, come to dominate the policy process. In this paper, we extend the concept of metanarrative, which to date has been interpreted as a story that policy makers use to recast policy problems. Policy metanarratives are shown to have strong pre-figurative effects and to be more pervasive than previously recognised.     

Seeking ontological security through the rise of China: New Zealand as a small trading nation

Maintaining global peace as China rises is a key strategic goal of Western liberal democracies. Compared to other western liberal democracies, New Zealand's response to the ‘rise of China’ is notable for its absence of security and political frictions and for the achievement of a series of diplomatic ‘firsts’. Can this be explained only by material concern over the national economic interest as China's role in the global economy increases or do ideational factors also underlay how New Zealand engages China? This paper employs the ontological security framework to demonstrate how New Zealand identity as a ‘small trading nation’ and ‘good international citizen’ has shaped its turn to Asia and response to the ‘rise of China'. It first analyses the origins of New Zealand's outward facing identity and resultant foreign policy positions long before China became an important aspect of New Zealand trade policy. It then shows how New Zealand seeks ontological security as a ‘small trading nation’ and ‘good international citizen’ in its relations with China and how China has responded to this type of engagement. The paper illustrates the importance of ideational factors in Western liberal democracies’ responses to the ‘rise of China’.     

Examining the immanent dilemma of small states in the Asia-Pacific: the strategic triangle between New Zealand,the US and China

ABSTRACT

Small states throughout the Asia-Pacific are confronted by a growing dilemma over how to balance their traditional security ties with the US and rapidly growing trade with China. This gives Washington and Beijing potential leverage over small states to use within their competition with one another. This article explores the implications of this for New Zealand – a small South Pacific state that prides itself on maintaining an independent foreign policy. Situated within the small state literature, it utilises a material-based strategic triangle to illustrate the fundamental facets of New Zealand's position. Relatedly, the article examines how Wellington has managed its burgeoning relations with China and the US over the past decade and critically considers New Zealand's independent foreign policy. It finds that New Zealand has adopted a mixed set of strategies to manage its position between the US and China, closely aligning itself with Washington while remaining nonaligned on some key security issues in the Asia-Pacific region. New Zealand has certainly not opted for neutrality. The article concludes that New Zealand and other small states must remain vigilant, may want to consider alternative strategies of alignment, and outlines a number of areas where additional research could prove fruitful.     

The Problems of Policy Coordination: The New Zealand Experience

The problems of coordinating the development and implementation of public policy are legion. While such problems are most commonly associated with large federal systems, they can arise with equal force and complexity in small, highly centralized, unitary states such as New Zealand. This article has four main purposes. First, it briefly surveys some of the recent literature on the nature of coordination and the mechanisms for enhancing policy coordination in government. Second, it outlines the nature and causes of the coordination difficulties that have been encountered in recent years in New Zealand. Third, it explores the various attempts which the Labour government (1984–90) and the National government (1990–present) have made to overcome these difficulties. Finally, the article considers some of the lessons which emerge from New Zealand's recent experience.     

Lesson-Drawing from New Zealand and Covid-19: The Need for Anticipatory Policy Making

The Covid-19 pandemic has seen most governments worldwide having to think on their feet rather than implementing detailed and well-rehearsed plans. This is notwithstanding the fact that a pandemic was bound to happen, sooner or later (and will happen again). The effectiveness of national responses has varied enormously. Globally, New Zealand has been perceived as setting the gold standard in ‘curve crushing’, and for a short period achieved Covid-free status. For this achievement, much credit is due to the New Zealand government, especially to Prime Minister, Jacinda Ardern. However, post-lockdown the New Zealand government has encountered a number of Covid policy implementation problems (many of which could have been anticipated). Nevertheless, Covid-19 might still turn out to have been a seismic shock to existing policy processes and policy frames (such as austerity). If so, there are grounds for hope that in the future, governments and voters might be less short-term in their outlook. Perhaps anticipatory, rather than reactive policy making, might become more fashionable?     

Public Sector Collaboration: Are We Doing It Well and Could We Do It Better?

Improving collaboration by public sector agencies is an important element of many public sector reforms. Common approaches include introducing responsibilities under legislation and policy decisions, the provision of information and guidance, and strengthening third‐party oversight. To identify how collaboration is being practised, this paper reviews evidence from over one hundred reports by Auditors‐General and Ombudsmen in Australia and New Zealand to identify key attributes of collaboration, and assesses these further by examining three reports in detail. It concludes that problems that have been known for many years continue to constrain public sector effectiveness. Although continuing existing approaches may assist in improving collaboration, the paper argues that there is a need to adopt more systematic approaches to organisational capacity for collaboration. It further identifies that changes in the external environment such as technology‐based innovation may demand rapid progress and change in relation to collaboration.     

Balanced Scorecard Use in New Zealand Government Departments and Crown Entities

While the concept of a balanced scorecard (BSC) has been extensively documented, there is limited research on the application of the balanced scorecard in a public sector environment and in New Zealand. This article examines how the BSC is being used as a performance management system, a strategic management system and to discharge external reporting obligations in three New Zealand public sector organisations. The findings are relevant to both the academic community and managers by highlighting how the BSC has been adapted to reflect the unique characteristics of public sector organisations.     

Advance Australia fair? Anatomy and pathology of an 84‐year trade dispute

• This paper examines the very long‐running trade dispute between Australia and New Zealand concerning a ban on the importation of apples on the basis of fire blight disease present in New Zealand. This particular example illustrates the more general case of the frequent conflict between science and politics in regard to technical trade barriers. This same issue of fire blight disease in apples became the subject of a protracted World Trade Organization dispute between the USA and Japan, with New Zealand a third party to the USA, and Australia a third party to Japan. The World Trade Organization Dispute Settlement Body, and subsequently the World Trade Organization Appellate Body, ruled in favour of the USA (and thus New Zealand) on this issue. Despite this ruling, Australia has continued its ban on New Zealand apples and the issue has become highly politicized in Australia.
• This case highlights the need for World Trade Organization rules to be changed to ensure that its rulings become binding on third parties and other World Trade Organization members. This would ensure that once an issue is decided through the full World Trade Organization conflict resolution process, the principles established should become generally applicable to other instances of the same scientific issue.

Copyright © 2005 John Wiley & Sons, Ltd.     

Performance and Accountability: Budget Reform in New Zealand

Since 1984, New Zealand has made major changes in public sector management. This article describes the perceived problems with the previous New Zealand system and discusses the reforms designed to address these problems. The changes attempt to increase efficiency by: (1) separating commercial functions from other government operations; (2) strengthening lines of ministerial and executive accountability; and (3) designing budget and financial management systems to improve measurement of public sector performance. This last reform includes shifting from an input to an output-based system, changing from cash to accrual accounting, and creating different forms of appropriations for different types of government activities. While it is too early to assess whether the reforms are successful, we note potential problems.     

Revising Our Expectations of Local Government

Significant reform of local government in Victoria has led the way nationally and arguably gone beyond the comparative New Zealand and English experiences. Since the reforms were introduced and elected councillors were returned during 1996 and 1997, there has been an adjustment of roles and responsibilities with varying degrees of acceptance. Reviewing the Victorian experience leads to exploration of the potential within local government to define a strong strategic development role based on larger units of economic influence. This will require continuing cultural change within organisations and a wider focus of responsibility for elected members to rise above the 'pot hole' mentality. Regional Australia will be especially poorly served if this challenge is not taken up. This article reviews the progress of compulsory competitive tendering in Victoria by using a case study of the experience in Ballarat.     

Integrated Impact Assessment as Environmental Policy: The New Zealand Experiment

The scope, complexity and interrelatedness of environmental problems presents a difficult challenge to policymakers. To date, public policies have been responsive largely to particular matters of public concern. They have typically been ad hoc, sectoral and segmental. Their administration has been charged to various agencies, each with its special mission. In consequence, governments have often acted to cross purposes; small results have often been ineffectual and, as often, unnecessarily expensive. Incremental innovation is seldom able to affect significantly the tendencies of the larger system of public policy and administration within which it is undertaken. Inasmuch as no country has had long experience with administration of environmental policy, a comparison of different approaches to environmental problems is useful. Direct transfers of method from one country to another may seldom be practicable, yet there may be lessons learned from the diverse experience of governments addressing similar problems. A comprehensive and radical institutional experiment in environmental policy has been initiated in the government of New Zealand. The New Zealand experiment may illuminate the effects of institutional structure on the implementation of policy. The relationships between constitutional principles, policy priorities and administrative structures have never been clear. The problems of coping with multiple environmental trends, their causes and their consequences justify efforts to find more effective methods of policymaking.     

Searching for Efficiency in the Public Sector: Interim Evaluation of Performance Budgeting in New Zealand

In this article I examine the efforts to promote performance measurement in the public sector with particular reference to New Zealand. In section two I examine the State Sector Act of 1988 and the Public Finance Act of 1989, which together brought about changes in the New Zealand public sector. In section three I examine the problems of implementing the reform. In section four I discuss the experience of developing statements of performance measurement required under the Financial Administration Act of 1989 and in section five I develop an alternative scheme on the basis that a uniform approach is less likely to be applicable to a range of public sector agencies. The final section contains a brief conclusion.     

In Search of Prudence: The Hidden Problem of Managerial Reform

This article argues that the concept of prudence can provide valuable insights into the problems of the New Public Management. Prudence, or practical wisdom, is the ability to make sound decisions under complex, ever-changeable conditions. Old-style bureaucracy severely limited the discretion of most administrators but preserved a site of true prudential judgment at the peak where discreet "mandarins" policed the boundary between politics and administration. The reforms that inaugurated New Public Management dismantled this site of prudence while simultaneously attempting, in effect, to disperse prudential judgment and action throughout the service. Though raising the problem of prudence, these reforms misconceived it as the problem of how to balance new freedoms with new controls to prevent abuse or folly. This essay argues that the introduction of market mechanisms, risk-management and cost-benefit techniques, ethics training, performance accountability, and calls to leadership were destined to fail because they misapprehended the problem of prudence.     

Design Thinking in Policymaking Processes: Opportunities and Challenges

Design thinking has the potential to improve problem definition and mechanism design in policymaking processes. By promoting greater understanding of how citizens experience government services, design thinking can support public managers who desire to enhance public value. In Australia, as elsewhere, design thinking currently remains separated from mainstream policymaking efforts. This article clarifies the essence of design thinking and its applicability to policy development. Five design thinking strategies are discussed, all of which have lengthy histories as social science methodologies. They are (1) environmental scanning, (2) participant observation, (3) open‐to‐learning conversations, (4) mapping, and (5) sensemaking. Recent examples from Australia and New Zealand are used to illustrate how these strategies have been incorporated into policymaking efforts. The article concludes by considering how design thinking might be more broadly applied in policymaking, and the training and resourcing requirements that would entail.