THE IMPACT OF CORPORATISATION AND PRlVATlSATlON ON ADMINISTRATIVE LAW*

‘Pushing the Boundaries’ versus Identifying the Boundaries: An Institutional Perspective on NPM Principles

“…With freedom, however, comes responsibility. The responsibilities of SOEs and government encompass following the spirit and the letter of the law (Taggart ). While legal responsibilities are express, subjective responsibilities (Mosher ) such as prudence, good judgement and moral probity raise more complex issues beyond complying with legislation.…”

“…Given the variation within NPM frameworks, it is perhaps not surprising that research has focused on NPM's core principles rather than its boundaries (Denhardt and Denhardt ; Lodge and Gill ). Essentially, the limits or boundaries of commercial activity within the context of NPM principles are less clear, besides that which is specifically prohibited (Taggart ). As noted by Gregory (), the lack of clear boundaries is particularly contentious in the context of the public (compared to the private) sector, as higher ethical standards are often expected of public sector organisations by the general public.…”

“…Specifically, the reforms involved market deregulation, with express profit‐making requirements for SOEs. Other features included separation of SOE management and the state, and performance‐based contracts and rewards for managers (Brash ; Mascarenhas ; Taggart ). Thus, corporatisation provided the opportunity and the incentive for these former government departments to become both efficient and profitable, enabling freedom of commercial choice and responsibility for commercial returns.…”

Examining Accountability Dimensions in State‐owned Enterprises

“…Legislation and regulatory frameworks governing SOEs commonly provide clear details of accountability in a traditional (upward) context. In New Zealand, for example, Part 3 of the State‐Owned Enterprises Act 1986 specifically focuses on accountability, detailing explicit requirements on SOEs such as a Statement of Corporate Intent, half yearly and annual reports, and annual audits conducted by the Auditor‐General (Palmer, 1988; and Taggart, 1992). Further, a review of Government and ministerial announcements in relation to the SOE sector also reveals clear expectations of SOE conduct.…”

“…As part of these reforms, government departments with a strong trading function were corporatised or privatised, on the premise that such services could be more efficiently provided by commercially orientated organisations, rather than subject to ministerial control and government interference. The rationale for such reform was the inefficiency of government as a provider of commercial services, due to protection from the discipline of a free market economy, often operating in a monopolistic environment, with the availability of on‐going financial support from central government (Brash, 1996; Scott, 2001; and Taggart, 1992).…”