Why Most Developing Countries Should Not Try New Zealand's Reforms

During the past decade New Zealand has introduced far-reaching reforms in the struc-ture and operation of government departments and agencies. This model has attracted interest in developing countries because it promises significant gains in operational effi-ciency. But developing countries, which are dominated by informal markets, are risky candidates for applying the New Zealand model. The author suggests that basic reforms to strengthen rule-based government and pave the way for robust markets should be under-taken first. Developing and transitional countries have an understandable desire to accelerate public sector reform by adopting the most advanced innovations devised by indus-trial countries. This interest has been stimulated by the New Zealand model, which gives public managers broad discretion to operate within an accountability frame-work that specifies the results to be achieved and closely monitors performance. During the past decade, dozens of countries have sent delegations to New Zealand to observe its avant garde management practices and to interview government officials on how the new systems and procedures have affected the cost and delivery of public services. The World Bank and other international organizations have showcased New Zealands reforms at various conferences, and some of the architects of the reforms have crisscrossed the globe extolling the virtues and portability of their countrys version of results-oriented public management. Despite the interest and the sales efforts, only a few developed countries (such as Iceland and Singapore) have adopted selected features of the model; others (such as Sweden and the United Kingdom) have embraced a managerial ethic without sub-scribing to the hard-edged contractualism that differentiates New Zealands reforms from those tried elsewhere. To this writers knowledge, however, not a single devel-oping or transitional country has installed the full New Zealand model, although quite a few have been enchanted by the prospect of leapfrogging to the front ranks in the international reform sweepstakes. A few countries (such as Mongolia) are in the