In the 1980s, the New Zealand government applied bold ideas and cutting edge theories to reform its economic policies and management practices. Reform was spurred by adverse economic conditions that made continuation of the status quo untenable, accommodating political arrangements that facilitated swift change, and novel economic and management concepts that emboldened political and bureaucratic leaders to prescribe new practices without testing them in advance. This convergence of economic stress, perceived failure in government performance, new political capacity and exciting theories was unique to New Zealand, which is why it alone has transformed the State sector so boldly and comprehensively. If any of these conditions had been missing, reform probably would have been modest and piecemeal; with all in place, New Zealand confidently broke new ground in the management of public organisations.
This chapter explains how the State sector was transformed in terms of the conditions and ideas that drove Ministers and officials to overhaul economic policy and government operations. It analyses the influence of ideas on reform and argues that many of the distinctive features of post-reform New Zealand government were derived from a powerful and largely consistent set of ideas. The chapter concludes with a comparison of these ideas with other managerial theories.