tion with the countrys transitional circumstances.THE NEW ZEALAND MODEL OF PUBLIC MANAGEMENTThe proponents of the New Public Management have often identified New Zealand as a good example of this contemporary mode of administrative reform called NPM. New Zealand has implemented an enormous number and range of management reforms since 1988. These include accrual basis accounting and appropriations. Budgeting for outputs rather than inputs, separation of service delivery functions from advisory and regulatory functions, replacing permanent department heads with chief executives appointed for a fixed term, discretion for managers to spend their operating budgets as they deem fit, individual employment contracts for most senior managers, annual purchase agreements between ministers and their departments, annual reports, and audited financial and performance statements (Schick 1998:2).Every element of reform has been designed to establish or strengthen contract-like relationship between the government and ministers as purchasers of goods and services, and departments and other entities as suppliers. This new contractualism replaced the relational contracts that characterise traditional public administration (Schick 1998:3).Managerial reform is based on a simple principle: managers cannot be held responsible for results unless they have freedom to act, that is, to spend and hire within agreed budgets as they see fit, to make their own choices concerning office accommodation and other purchases, and to run their organisation free from ex ante control by outsiders.The New Zealand experience shows how effective management practices in the private sector can be brought into a public sector environment and adapted. The change was driven by ideas that have only recently entered mainstream economics and they have been applied with full fidelity to their internal logic. Although one can justify that the country has vastly enlarged the stockpile of pu...
