Intended or Unintended Consequences? Resource Erosion in New Zealand’s Government Departments

Internationally, a feature of public sector reforms over the last twenty years is the characterisation of negative effects as unintended consequences, yet the reform programme continues as before (Humphrey et al., 1993 and 1998). This article reports the findings from an investigation of ostensibly unintended consequences of New Zealand’s public sector financial management system: resource erosion in government departments which both escapes parliamentary scrutiny and damages departments’ capability to perform even core functions (State Services Commission, 1998a; and Controller and Auditor–General, 1999). The findings suggest that these effects might not be unintended. The system’s structures and processes, including designed–in resource erosion processes and a surreptitious approach, are highly consistent with those advocated to facilitate privatisation.