Government

NZ’s frenzied approach to public sector restructure

One public sector restructuring in New Zealand tends to feed the next, but why are there so many and why do other countries regard us as the exemplar?

Compared with elsewhere, New Zealand has ants in its pants when it comes to frequent restructuring, an issue Dr Flavia Donadelli, a Lecturer in public management and public policy in the School of Government at Te Herenga Waka—Victoria University of Wellington, has been studying.

In a special issue of Policy Quarterly on public service reforms, Donadelli and Professor Martin Lodge of the London School of Economics have written about New Zealand’s government reforms and whether they are “continuous improvement” or more a case of “hyper-innovation”.

Hyper-innovation refers to substantial and comprehensive changes to policy processes and products, often justified by the search for more effective policies.

“It’s related to dramatic, radical reforms to the way in which things are done by government, as opposed to incremental and small-scale changes,” says Donadelli.

She says that between the 1960s and late 1990s there were 259 departmental restructurings here, compared with 100 in the United Kingdom and 96 in Canada.

“So why is New Zealand witnessing such frequent restructuring? One explanation is the close-knit networks that characterise Wellington, and the ties between government and academia.

“Across decades, dozens of academics have been directly involved in advising New Zealand governments and, in turn, governments have been responsive to their ideas.

“Reform proposals in 2019 are no different, as we have seen with the numerous academic submissions to the public consultation surrounding them.

“Such a close connection might offer a wider explanation as to why New Zealand machinery-of-government discussions are so often regarded as ‘poster children’ for the latest administrative reform doctrines.”

Donadelli says change in public management is not always spurred on by positive factors.

Despite all the glossy documents and promises of a bright, new, administrative future, the inevitable disappointments and ‘blame games’ will unavoidably give way to the next round of reform proposals.

“In fact, it is usually reactive to disappointment and failures in existing arrangements. The accumulation of negative consequences and disappointment leads to growing opposition and the endorsement of alternative reform ideas.

“In other words, despite all the glossy documents and promises of a bright, new, administrative future, the inevitable disappointments and ‘blame games’ will unavoidably give way to the next round of reform proposals.”

Even if they display an academically coherent set of propositions and look beautiful on paper, reforms might often not deliver as much as intended when it comes to implementation. Or they might lead to unintended consequences as a direct result.

Donadelli says an interesting comparison is with the hyper-innovation that characterised public-sector reforms in the United Kingdom between 1970 and 1990.

“That came with intensive privatisation, economic and regulatory reforms, and was also an era that increasingly invited policy fiasco.

“Some examples of that included the lack of monitoring and regulation around meat production, leading to the BSE [‘mad cow disease’] outbreak, rail privatisation, the 1995 collapse of Barings Bank and the fallout from the Millennium Dome.

“In New Zealand, hyper-innovation might lead to fiascos that will constantly motivate more reforms. The ‘leaky homes’ saga and the Pike River disaster are cases in point.

“In the Pike River case, one of the conclusions of reports produced after it relates to inadequate oversight by the health and safety regulator that lacked focus, resourcing and inspection capacity.

“In the ‘ leaky homes’ case, it refers to changes in building controls by the Building Act 1991 towards more self-regulation and problems with issuing building consents by local authorities.”

New Zealand’s experience of change has received little attention, says Donadelli.

“In our short article, we can only point to three interdependent factors – the close ties between practice and academia in reforms; a political system that remains highly centralised; and the effects of innovations themselves as drivers of disappointment and more innovation.

“New Zealand could be argued to be caught up in its own policy frenzy of hyper-innovation in which actors ‘overcorrect’ in view of perceived shortcomings and failures of existing arrangements.

“However, there are ways out of such a seemingly inevitable cycle of hyper-innovation. For one, there is considerable reflective capacity in the New Zealand system, one that is supported by the closeness of practitioners and academics.

“Maybe it is time to also rely on incremental changes that emerge from employee experience rather than from the whiteboards of central government agencies?

“This is not to say that such feedback mechanisms do not already exist, but they should be seen to encourage piecemeal, often rather inelegant, adjustments to existing arrangements.

“That will support the building of reflective capacity across the public sector and is more likely to embed ongoing reform than feed a constant search for new ‘paradigms’.”

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