The development of modern public management systems started in 1984 with the New Zealand Government of Prime Minister David Lange specifying that all NZ government agencies were to move to an outputs approach – the use of strategic planning along the lines of the private sector.

Between 1986 and 2000 the New Zealand Public Service went through the development of 'managerialism' and had a focus on outputs or doing the job efficiently. After 2000, it moved towards leadership and outcomes or getting the results that are expected.

The initial moves from 1986 were a major shift in public management and achieved some real strengths. Notably:

  • Transparency;
  • Greater focus on delivery and efficiency; and
  • Improved financial management and accountability

However, largely driven from economic basis of public choice and agency theory, they also brought a series of changes that have not helped subsequent development:

  • They broke up the public sector into smaller units – this could be called fragmentation.
  • They hard-wired in an output-based management system and consequently underemphasized outcomes – managing for results, and capability – fitness of the public sector for its purpose.
  • They strengthened a culture and practice of centralized-based policy-making and solution seeking and consequently de-emphasized evidence-based, citizen and community-centred, policy making, service design and delivery

In an effort to rectify the problems experienced in the early stages of change, the New Zealand Government identified three focuses for improvement:

  • Focusing more on results (managing for outcomes).
  • Getting more citizen and community-centred in how the government does business (moving from centralized to community-centred; helping build capability for subsidiarity; using enabling technology to simplify things for citizens.
  • Building public sector capability, from two angles:
  • Strengthening people, culture and leadership (developing values and culture, and building leadership capability)
  • Strengthening the integration of structures and processes (breaking down the silos, building a networks culture and processes, improving coordination, using enabling technology better).
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