Bringing the bureaucrats back in: neo-liberal tax reform in New Zealand

Abstract

AbstractNew Zealand moved further in neo-liberal tax reform than most other advanced economies over the last three decades. The article investigates this extreme case to address the question of what explains major neo-liberal economic reform. Comparing tax policy-making in two periods, the 1980s and 2008–10, we argue that neo-liberal tax reform in New Zealand is best understood as the product of “autonomous bureaucratic action”. That is, bureaucratic organisations within the state independently formulated the goals and ideas for reform, took an activist role in policy-making and strongly influenced the policy preferences of ministers. Moreover, responding to a criticism often raised against state-centred theories, we offer an explicit explanation of bureaucratic preferences. We argue that bureaucratic goals and ideas were a product of how particular structural features of the bureaucracy – organisation and training – made ministries more or less receptive to new ideas within the economics discipline.