Shaping the bureau or maximising the budget? : Rational choice, historical institutionalism and bureaucratic reform in New Zealand : a dissertation presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Politics, Massey University, Turitea campus, New Zealand

Abstract

In early 1997, the recently formed National/New Zealand First coalition government embarked upon an Employment Strategy which was to generate extensive structural upheaval in the New Zealand public service. In short order, the largest government department was dismantled, a second was much reduced, and three new bureaucracies were created. This dissertation searches for the causes of the trajectory and outcomes of those institutional reforms. Drawing on both qualitative and quantitative data, the thesis explores the motives of the senior politicians and officials involved in the Employment Strategy, tests the relative influence of those actors over decision-making, and examines the bearing which institutional arrangements within the political executive had on the course and consequences of the Employment Strategy. Two theoretical approaches are used to make sense of the data. The rational choice case for bureaucratic change proposes that the institutional shape of the public sector is a function of instrumental bureaucratic conduct. Specifically, budget-maximisation is assumed to result in an increasing number of government departments, each consuming an expanding budget and producing excess output. The orthodox economic model provides a poor explanation of the Employment Strategy. The bureau-shaping model (Dunleavy, 1991), on the other hand, which employs a revised rational choice maximand to explain the influence of officials on bureaucratic reform, has more explanatory potential. The assumption that senior officials are motivated to shape the institutional parameters of their departments, rather than to maximise budgets, generates valuable insights regarding the structural revisions in question. Nonetheless, a bureau-shaping analysis cannot explain the variation in officials' preferences which marked the Employment Strategy, or the influence which Cabinet ministers had on the resolution of key policy debates. Those limitations point to the value of the second theoretical tradition used in the study. Historical institutionalism combines human agency and institutional context in a single account of political outcomes. The analysis in this thesis accommodates optimising behaviour, but explains it in the context of the institutions of the political executive which mediated decision-making during the Employment Strategy. However, neither rational choice nor historical institutionalism can fully account for the process and institutional results of the Employment Strategy. The thesis advocates a rapprochement between the proponents of individual agency and those who emphasise structural context and historical particularity. For the first time, this dissertation extends the existing new institutionalist literature and articulates a theoretical pathway to that end.