Ministerial responsibility and agency theory: a comparative review

Abstract

Historically, New Zealand's political system is derived from the British, or Westminster, tradition. At the heart of the Westminster model of Cabinet government is the doctrine of ministerial responsibility. In accordance with the convention of ministerial responsibility, ministers are answerable collectively to Parliament for policies determined by Cabinet decision (collective responsibility), and individually for the policies of their own portfolios, and for the actions of the departments they administer. Since the election of New Zealand's fourth Labour Government in 1984 the public sector has undergone radical reforms, which have been based on economic theories of organization, in particular " public choice theory" and " agency theory". This study compares and contrasts the doctrine of ministerial responsibility with public choice and, in particular, agency theory. Three themes are explored: 1. The doctrine of ministerial responsibility 2. Public choice and agency theory 3. The reforms of the New Zealand state services as embodied in the State-Owned Enterprises Act 1986, the State Sector Act 1988, and the Public Finance Act 1989.