Special Issue on "After the Reforms"

Twenty years ago, New Zealand’s public sector was radically and rapidly reformed by the State-Owned Enterprises Act (1986), the State Sector Act (1988), the Public Finance Act (1989) and related policy measures. These reforms were dramatic, ambitious, bold, comprehensive and, not surprisingly, controversial. Significantly, most have survived the test of time. And many have been replicated, to one degree or another, elsewhere – both in developed and developing countries. This represents a remarkable legacy.

The five papers in this special issue of Policy Quarterly are a sample of more than 20 presented at a major conference held in Wellington in late February 2008 on the subject: ‘After the reforms: Where are we now? Where are we heading?’. The conference, which focussed on the long-term impact of the public management reforms of the 1980s, was jointly hosted by Victoria University’s School of Government and the Institute of Public Administration New Zealand and supported by the Australia and New Zealand School of Government, the State Services Commission and the Treasury. A special contribution to the debate came from the participation from 35 senior public servants from developing countries within the Commonwealth, who were in Wellington for a two-week seminar. This latter event has been held annually since the mid-1990s to respond to the significant and continuing international interest in New Zealand’s reforms.

Thanks to the energetic efforts of the conference director, Alastair Bisley, the 150 participants were treated to a comprehensive range of perspectives from practitioners and academics. Internationally, New Zealand still stands out for the extent to which its public sector has used private sector techniques to devolve authority to managers and to hold them accountable for achieving results. In an election year, both the conference and this selection of published papers contribute to an important debate about the size and performance of the public sector and how to ensure that the major reforms of the late 1980s are properly reviewed and, where appropriate, modified and refreshed.

This issue of Policy Quarterly commences with a detailed contribution by Graham Scott, one of the leading architects of New Zealand’s public sector reforms. In this article, he critically assesses what has happened within the public sector since the early 1990s and highlights a range of significant issues which, in his view, require attention by policy makers. His analysis is wide-ranging, penetrating and, at times, provocative. While not all with agree with his diagnosis and prescriptions, there can little doubt that he identifies some crucial ‘hot spots’ within the current framework of public management that need addressing.

The next article is by Kevin Brady, New Zealand’s Controller and Auditor-General. This focuses on the forecasting and reporting of agency performance. The point is made that while government departments and Crown entities have significantly improved the quality of their financial reporting since the mid-1980s, a similar improvement has not occurred in relation to their non-financial reporting. Brady acknowledges that non-financial performance reporting poses a variety of conceptual, technical and political difficulties, but makes a robust case that we can, and should, do better.

Miriam Lips, the inaugural Professor of E-government at Victoria University, examines how the New Zealand public sector is using Information and Communication Technologies (ICTs) to achieve its goals of transforming the operations of government by 2010 and its engagement with citizens by 2020. She argues that ICTs have great potential to reshape and improve how the New Zealand government conducts its business and interacts with citizens, but that this potential is not fully appreciated at present. She concludes that the public sector must develop an informational perspective in order to fully reap the benefits of ICTs.

One of the concerns generated by the reforms of the 1980s was that they had given rise to a raft of new organizations, thereby contributing to a more fragmented and possibly less cohesive and less well coordinated public sector. Derek Gill reflects on these issues in his contribution. He highlights the remarkable lack of hard evidence concerning the impact of organizational structure on performance. Such data as are available, however, suggest that restructuring is usually neutral or negative in its impacts. The message, perhaps, can be summed up as follows: restructure with caution and only after exploring the other available options first.

Finally, Richard Norman examines the impact of the public sector reforms on the role and influence of the three central (previously ‘control’) agencies – the Department of Prime Minister and Cabinet, the State Services Commission and the Treasury. He highlights how the move to a relatively decentralised system of public management has significantly affected how these agencies interact with line departments and altered the mechanisms available to influence behaviour across the public sector. He also makes the interesting observation that, by comparison with their counterparts in Australia, New Zealand’s central agencies are relatively small, but that the State Services Commission has a more significant role (as the employer of departmental chief executives) than its equivalents across the Tasman.