Howard Husock

A visit to Wellington, New Zealand, capital of the nation of some four million, takes one to a small San Francisco deep in the southern hemisphere. It is so far south that even in the summer winds from Antarctica buffet Wellington, making a run along the South Pacific waterfront no less arduous than a winter jog in Central Park, albeit warmer. The San Francisco comparison extends past the setting of hills and bay; a gold rush came here not long after California, and many of the same players sailed west to take advantage of it. San Francisco-style pastel Victorian homes dot the older streets and there’s even a cable car from Lambton Quay, the city’s main shopping street, up the steep hillside overlooking Victoria University.

These sorts of atmospherics are not all that is familiar about this most isolated of world capitols. Notwithstanding the prosperity that has come to New Zealand in recent years—as wine (Pinot Noir and Sauvignon Blanc, in particular), film-making, software development and tourism have complemented agricultural exports—the Wellington papers were filled with accounts of the same sorts of social problems with which the U.S. wrestles.

Not that New Zealand understands itself to have much in common with the hated Americans. Once a small but effective military power—part of the Australia-New Zealand ANZAC forces in World Wars I and II, New Zealand, especially under current Labour Prime Minister Helen Clark, has chosen the Left course in world affairs. As Canada is to the US, so New Zealand is to Australia—ostentatiously Green, agnostic at best in the war on terror and unwilling, since the 1980s, to let the US nuclear fleet dock here. (When one enters the city, a sign welcomes the visitor to “nuclear-free” Wellington).

But the question of the welfare state and its appropriate extent plays out here, as in all developed countries.

New Zealand’s British-style national health service places the details of medical care in the province of the government. The Dominion Post headlined the fact that more than 1600 patients have been removed from surgical waiting lists as part of a “drastic cut that health bosses blame on an aging population and rising violence in the community.” The secret to cost control, in other words, is triage.

Rising violence would not be associated in the American mind with New Zealand—and, indeed, the major cites of Wellington, Auckland and Christchurch are mostly clean and safe. But Conservative challenger John Key has framed the upcoming national election around the emergence of a Kiwi “underclass”—which is code for gang and household violence among the Maori population, the descendants of the indigenous south Pacific islanders whose sociology is an unlovely combination of Native American and African American-style problems. Like Native Americans, the Maori control significant land and mineral assets—and, as in Canada, government-created trusts, based on an 19th-century treaty, give commercial control of these to Maori leaders.

But this significant wealth has not been sufficient to keep a growing Maori population from migrating to the cities, where, especially in Auckland, New Zealand’s largest city, they have become ghettoized, dominated by single-parent families and dependent on a generous dole. The nation was abuzz during my visit with the story of a household receiving some $1500 a month in support—but in which a child had died as the result of abuse. There are significant Maori gangs, notable for their tattoos (actually a Maori tradition) and who have taken up rap music and baggy pants, as a result of the export of American underclass culture through films and music videos. The New Zealand Herald reports that “posties” would not make deliveries in three Maori-dominated neighborhoods in Hamilton. A poignant treatment of the degeneration of Maori culture can be seen in the powerful 1994 film, “Once Were Warriors,” set in Auckland and based on the book of the same name.

Like American blacks, the Maori are a significant political force and issue. They comprise fully 15 percent of the population, have their own political party and are guaranteed seats in Parliament. So, too, are they conflicted about their situation, with appeals to race pride coupled with calls to end gang violence and take advantage of New Zealand’s healthy economy. Maori Party leader Pita Sharples has called for the “banning of gang insignia” and of gangs that “the distribution and manufacture of methamphetamine.. . .I recognize that a lot are Maori gangs and I would call on Maori tribes, tribal organizations, committees and Maori families to not accept the current behavior.”

Still, New Zealand’s government, like Australia’s, has much to teach. Its New Public Management initiative, brought in by the Labour Party in the late 1980s, led to massive sell-offs of state-owned enterprises and, more relevant to the U.S., the use of incentives and competition in the day-to-day running of public agencies that far outstrip halfway measures such as those promoted at the time by Vice-President Al Gore. As Richard Norman of Victoria University of Wellington has written,

A large, bureaucratic public service had been reshaped using the principles of ‘New Public Management (NPM).. its elements include disggregation, or the splitting up of large public sector hierarchies into ‘business’ units with flatter hierarchies and carefully defined goals and targets; competition, as an alternative to hierarchical decision making, to put pressure on organizations to perform. Policy and funding roles were separated so these could define expectations for delivery functions and contract with private sector or non-profit providers as well as public organizations; incentivization– a move away from public service based on a life-time career and professional ethos, to contracts and rewards for specific roles. This had been most strongly emphasized by a change from ‘permanent heads’ to chief executives on time limited contracts with provision for performance bonuses.

In other words, the public service in New Zealand is akin to Harvard’s “every tub on its own bottom” system, held to account for its performance and asked to manage its own budget. In both New Zealand and Australia, what would be radical in the U.S. is now conventional. For instance, the famous tram system of Melbourne has been contracted out to private vendors—who are not even Australian—to operate. Contracting out for services is the norm in much of the New Zealand government, which understands the difference articulated in the U.S. by Steve Goldsmith during his tenure as mayor of Indianapolis between setting policy and delivering services.

One wishes for similar creativity extending, say, to mass transit in New York, and such innovation might well have been the price of maintaining the New Zealand welfare state. Is this a bargain worth considering here in America?

Howard Husock is the Vice President of Programs and the Director of the Manhattan Institute's Social Entrepreneurship Initiative. He was formerly the director of case studies in public policy and management at Harvard University's Kennedy School of Government.