Policy, Service Delivery and Institutional Design: the Case of New Zealand's Social Sector Government Agencies, 1984-2007

Abstract

The separation, on functional lines, of policy and operational activities in public sector departments was one feature of the reforms of the State sector which took place in New Zealand from 1984. The New Public Management, or NPM as it quickly became known, provided an umbrella title for the reforms which were taking place in public sectors in many OECD countries. NPM involved two sets of ideas economicsbased theories and managerialist systems. Over the period NPM evolved with many transitions, phases and ages as academic observers and some bureaucrats sought to document the changing nature of NPM and compare the intercountry variances. The thesis addresses changes in institutional design, which have taken place in New Zealand through the period from 1984 to 2007. This period is discussed in two phases. The first, from 1984 to 1999, covered the major changes in legislation and structural arrangements, with phase two, which involved consolidation and rebuilding, being from 1999 to the present. A multifaceted research approach was adopted with evidence from public policy literature, study of relevant secondary data and interviews with some of the key political and administrative actors who were engaged in the implementation of the reforms. During the mid to late 1990s it became increasingly apparent that the new institutional format was not without its problems, including implementation deficits which were arguably, at least in a large part, a consequence of the decoupling of policy and operational/regulatory functions. With the formation of a new Labour Government in 1999, moves commenced to reintegrate the policy and service delivery functions of government agencies and address the problems, which had been identified. The research questions focus on the identification of the administrative doctrines and practices which had informed the separation of policy from operational activities in government agencies through the first phase of reforms and the rationale for the modifications which took place to guide the machinery of government arrangements which unfolded from 2000. The realignment of the policy and operational functions, which progressed through the second phase of the reforms, was guided by a pragmatic approach to analysing the problems which had emerged, on a casebycase basis, to establish a coherent joinedup government approach to the management of the public sector. The conclusions reached involved the identification of a fourth age for the New Zealand NPMbased reforms. Here there has been a rejection of the earlier managerialist focus and an acknowledgement that a wholeofgovernment approach is required to administer the public service efficiently. The lesson learned from this investigation is that unintended consequences can emerge from any empirically based solution grounded in theory and applied in varying degrees in other jurisdictions. A pragmatic approach which considers both the individual characteristics of each situation, and the wholeofgovernment impact, is required when addressing structural design issues in the future.