The Main Argument — Specialization without Coordination is Centrifugal

Abstract

In 2000, the new New Zealand Minister of State Services, Trevor Mallard (2000), commented in one of his speeches on the current state of the New Zealand state sector:

Let me outline the three overall areas where I think we need to see change in the State sector.

Area one is fragmentation. Today we have 38 Public Service departments and more than 100 major Crown entities. And that doesn’t take into account the defence and police forces, much of the education sector, and local government. That’s a large number of State agencies for a country of fewer than four million people. In the major agencies — in the Public Service departments and the Crown entities — the results of that fragmentation are apparent. For example, in the labour market, departments compete against each other to hire the same staff, sometimes to the detriment of the Government overall. Some sectors — say education — require major co-ordination from the centre that soaks up resources. There’s an absence of full-loop learning — feedback on whether policies actually work — because the policy advisors work in a department other than the delivery one and the connections between operations and advice aren’t established.

Area two is the role of the centre: that’s the three central agencies — the SSC, the Treasury, and DPMC, plus the political executive — the Cabinet. Not surprisingly, in a fragmented system, the centre needs to be relatively strong. But — paradoxically — I think the centre has been struggling for definition in the last ten years or so.

Area three is ‘style’ or ‘culture’. Part of the problem here is the vertical, linear nature of purchase. That’s the process by which departments and Crown entities ‘sell’ their services to Ministers. It’s a good system in that it makes it clear what is being produced, and at what cost. But we have taken it too far. Has anybody here seen a departmental purchase agreement that included a statement of values and behaviours that the department should apply on behalf of the Government? I bet you haven’t … but as I have just said, values and behaviour are one of the defining characteristics of the State sector. (Mallard 2000, quoted in Boston and Eichbaum 2005, footnote 5)