Tuesday, April 10, 2007

Changes in Public Administration and their Impact on Public Policy 5 - Application and Spread of the New Zealand Model

Note to readers: This is one of a series of posts discussing changes in public administration and their impact on public policy. Each post has a full list of posts at the end. You may care to start at the introductory post and then follow through.

In my last post in this series I outlined the key features of the new New Zealand model of public administration.

I know New Zealand very well and love the place. Dad was born in there, I still have family there, and have visited it many times over the year. Given this background as well as my professional interests, I was absolutely fascinated with the way the reform process unfolded in practice.

New Zealand's treasurer, Roger Douglas, knew that fundamental change - and it was fundamental - required fast and sustained action to drive things through. I was aware of the process while I was still working for the Commonwealth Public Service, but it was not until I set up my own consulting operation that I became directly involved.

In 1989 we decided to start selling services into New Zealand. This led me to make a number of marketing trips to New Zealand over 1989 and 1990.

Given that Government relations, Government policy advice and program evaluation were core business, from my first marketing trip I started to work my way through New Zealand ministries and agencies attempting to understand the New Zealand scene. In turn, this led us to set up what we called the Public Sector Reform Project to look at the revolution in public administration in New Zealand and then compare it to Australia at national level and in selected states. We also wanted to look at it at a Government wide level and then at its application in specific portfolios.

Application of the Model in Practice - New Zealand Scene

By the time of my first marketing visit in 1989, the revolution was four years old. There was an air of pervasive gloom in the general community.

Taxi drivers lectured me on the evils of a deregulated taxi industry, on the way in which competition had driven down both their income and the standard of service. Yet after visiting a number of agencies I was impressed by the coherence of vision and language. I started to become very positive about New Zealand's future, although I could also see some of problems starting to emerge in terms of the application of the model. These became clearer on subsequent trips.

I saw problems at two levels.

At national level, the Government and ministers were struggling to articulate the objectives, program structures and associated performance standards required to make the system work. There was a major clash between the day to day pressures associated with the Parliamentary system and the need to articulate longer term objectives.

There was also a major clash between the fundamental stance of the Government - deregulation and let the market flower - and the alternative more proactive stance.

This clash was encapsulated in the 1991 Porter Project report. Inspired by the ideas of and part authored by Michael Porter, the book was an incisive analysis on the causes of New Zealand's economic problems. However, its suggestions as to solutions were noticeably weak. It is very hard to define a pro-active development role for Government when your starting premise has ruled such a role out!

At agency level, agencies were struggling to introduce the new approach. This was partly due to technical problems, partly to interest conflicts.

The New Zealand Ministry of Defence and the New Zealand Defence Forces can be taken as an example of technical problems. They had to attach a value for balance sheet purposes to New Zealand's various military assets and then work out a depreciation schedule. One effect was to push the formal accounts into deficit because the New Zealand Government was not prepared to contribute enough money to defence.

The New Zealand Qualifications Authority can be taken as an example of interest conflicts.

The Authority defined a national competence based qualifications structure from primary through to the highest formal qualification. Consistent with standards based approaches, it should not matter how you acquired the necessary knowledge and skills. The only requirements were definition of the standard on one side, the test procedure on the other.

This posed a fundamental challenge to New Zealand's Higher Education system in that it meant that people could acquire a higher qualification independent of them or any other university. So the universities opposed this element of the changes.

Application of the Model in Practice - transmission to Australia

There are close links between Australia and New Zealand, and the New Zealand experiment had a significant Australian impact, although the transmission mechanisms were not always clear because so much contact was informal. In addition, because New Zealand itself was part of a broader global movement, it can be hard to distinguish between New Zealand and broader global impacts.

The NSW Greiner Government (elected 1988) is perhaps the clearest example of Australian impact. The Griener Government introduced many of the New Zealand approaches holus bolus. As a simple mechanical example, ministers were meant to agree their performance objectives with the Premier. Then the various departmental CEO's had to agree their performance objectives with the Premier's Department.

Again, as in the New Zealand case, we can see the way the application of the model was driven by the Government's ideological stance.

The Greiner Government saw itself as a market driven reform Government sweeping away the detritus of the past along the lines already pioneered in the UK and New Zealand. Mr Greiner himself defined the role of the Government in terms of economic and management efficiency. The role of Government was good management in financial terms and in the delivery of services.

That's fine, but it in fact left the Government in the same position as the New Zealand Government when it came to defining peak objectives.

On one side you had major changes intended to improve delivery efficiency as well as state economic performance, on the other a Government unable to articulate broader objectives beyond reform itself because the Government's role had been defined in such a way as to limit the scope of what could be done.

The Greiner Government fell in 1991. But the subsequent NSW Labor Party Governments in fact continued its basic thrust with all the consequent strengths and weaknesses. As we shall see in our next case study, this comes through clearly in the structure and content of the current NSW Ten Year Plan.

Copyright and Citation Details

The material is this series is copyright Jim Belshaw. However, it may be copied or quoted with due acknowledgment.

The following should be used for citation purposes if referring to the overall series: Jim Belshaw, Changes in Public Administration and their Impact on the Development of Public Policy, Ndarala Group, 2007 with a link to the introductory post.

If citing this post, Jim Belshaw, "Changes in Public Administration and their Impact on the Development of Public Policy 5 - Application and Spread of the New Zealand Model", in Jim Belshaw, Changes in Public Administration and their Impact on the Development of Public Policy, Ndarala Group, 2007 with a link to this post.

Series Posts

Changes in Public Administration and their Impact on the Development of Public Policy 1 - Introduction, 20 March 2007.

Changes in Public Administration and their Impact on the Development of Public Policy 2 - Notes on Major Trends, 26 March 2007.

Changes in Public Administration and their Impact on the Development of Public Policy 3 - Publish or Perish Case Study, 6 April 2007.

Changes in Public Administration and their Impact on the Development of Public Policy 4 - the New Zealand Model, 9 April 2007.

Changes in Public Administration and their Impact on the Development of Public Policy 5 - Application and Spread of the New Zealand Model, 10 April 2007.

2 comments:

Debbie K said...

Squeezed to its esswentials and prsented like this there is probably much to debate but overall seems to give some coherence to a very chellanging rpogression for public admnistration 1980s to today. Can't wait for the application to the curent State Plan!

Jim Belshaw said...

State Plan will follw, Debbie!