The Implosion of the US Administrative State: Lessons for Aotearoa New Zealand 

The collapse of the US administrative state is not just an American problem, it carries important lessons for Aotearoa New Zealand.

As Washington grapples with political dysfunction and the erosion of public institutions, we should pay attention to how a weakened state apparatus invites economic instability, political turmoil, and diminished democratic control.

For Aotearoa New Zealand, this is not an abstract concern. We have already experienced a period of radical restructuring in the 1980s, when economic and public sector reforms fundamentally reshaped the state’s role.

Today, we face a different challenge – not one of a state that is too weak, but of a public service that, at times, risks drifting away from its core responsibilities.

The latest public service reforms, though well-intentioned, have contributed to this shift. As America’s experience shows, when the machinery of government ceases to function effectively, the consequences can be severe.

Here are the five lessons I am taking from watching the US.

Shock Doctrine: We Have Seen This Before and Found a Middle Ground

The US administrative implosion is a textbook case of the “shock doctrine” in action: the use of crisis (real or manufactured) to push through radical reforms that would not otherwise be accepted. The gutting of federal agencies, the dismantling of regulatory bodies, and the erosion of state functions follow a playbook we know well.

In the 1980s, Aotearoa New Zealand underwent sweeping reforms that liberalised the economy, reshaped the public sector, and redefined the state’s role. Deregulation, privatisation, and deep cuts to public services were justified as economic necessities, and while they did improve some aspects of efficiency, they also left lasting scars: some regional economies never fully recovered, and some communities bore the burden of these changes more than others.

While the precise magnitude of the economic crisis that confronted Aotearoa New Zealand in the 1980s remains debatable, there is no question that the country faced fundamental structural challenges requiring far-reaching responses. The Lange Cabinet confronted choices more difficult than perhaps any other Cabinet in our nation’s history, operating under intense pressure with limited policy options.

In critiquing these reforms – as much as I personally believe the cost was carried by our most vulnerable families and communities – we often neglect to consider the counterfactual seriously. What might have transpired without intervention? Our path could have mirrored that of nations that delayed necessary reforms, potentially following Chile’s trajectory during its worst economic crises, where delayed action led to even more severe social and economic disruption.

Over time, our political leaders responded by softening the harder edges of new public management reforms through effectiveness-driven public management, networked governance, and new public governance models. Even so, the core assumptions of that period still shape our state today. The US is now facing its own version of this upheaval, but with an added political dimension: an explicit attempt to dismantle government capacity altogether. The lesson for us? While course corrections are possible, rebuilding a strong and effective state once it has been weakened is extraordinarily difficult.

Public Servants Must Respect Ministers: While Providing Robust Advice

In Washington, many bureaucrats now actively resist the elected government. Some slow-roll policies they disagree with, leak against administrations they oppose, or challenge executive orders in ways that go beyond their advisory role. While this level of political defiance is not common in Aotearoa New Zealand, ministers, past and present, have raised concerns about instances where public servants have treated government priorities as optional rather than as legitimate democratic directives.

Public servants have a duty to provide free and frank advice grounded in expertise and an understanding of the public interest and the Government’s goals and priorities. They are also responsible for stewarding the system in a way that ensures it remains effective and resilient for future governments. However, they do not have a mandate to substitute their own policy preferences for those of elected officials.

The Public Service Act 2020 was intended to strengthen the service’s role in delivering for the public. Whether its challenges stem from conceptual flaws, such as assuming that public servants will always balance their obligations appropriately, or from poor implementation and underfunding is debatable. What is clear, however, is that in some areas, it has fostered a culture where policy advisors see themselves as independent actors rather than as part of a system accountable to ministers. This can create inefficiencies and disconnects, ultimately leaving both ministers and citizens frustrated, which ultimately reduces the trust and confidence in our public institutions, and the social license they need to operate, let alone innovate and do more with less.

A Public Service Without Clear Outcomes Is Vulnerable to Political Disruption

One of the reasons the US administrative state is struggling is its complexity: modern public management operating models are sprawling, sometimes inefficient, and perceived by many as disconnected from delivering meaningful outcomes. When a government fails to demonstrate its value, it creates openings for those who argue it should be stripped back or dismantled entirely.

Aotearoa New Zealand must be mindful of this risk. A well-functioning public service must be responsive, both to the government of the day and to the long-term needs of the country. When process and consultation become ends in themselves rather than means to better policy and service delivery, we risk eroding public confidence.

The government’s current emphasis on outcomes-based public management is a welcome focus. Public institutions must continuously demonstrate their effectiveness – not only to justify their existence but to maintain legitimacy in the eyes of the people they serve. Without clear, measurable results, the public service becomes more vulnerable to disruptive reforms, whether driven by cost-cutting pressures or political ideology.

Public Servants Should Not Become a Shadow Opposition

In the US, the idea of a “deep state” is often exaggerated, but the reality is that bureaucratic resistance can become a real challenge when public servants see themselves as an alternative power structure. There is an extensive literature on “guerilla government”, where officials, acting on principle, resist or obstruct policies they disagree with. While some of these actions can be motivated by genuine concerns, they also raise difficult questions about democratic accountability.

In recent years, there have been instances in Aotearoa New Zealand where some public servants have taken actions that blur the lines of their role: whether through working with opposition figures to influence policy direction, leaking confidential discussions, or shaping media narratives to apply pressure on ministers. While individual cases may be understandable in context, a pattern of this behaviour can undermine trust in government institutions.

The challenge is maintaining a culture where public servants feel empowered to provide strong, independent advice while ensuring they remain accountable to the government they serve. This is not about obsequiousness; it is about maintaining the proper balance between professional integrity and democratic legitimacy.

The Core Public Service Must Serve Ministers: While Respecting the Public Interest

A major shift in recent public sector culture has been the emphasis on public servants serving “the public” rather than ministers. While the principle of the “spirit of service” is valuable, it must be carefully managed to ensure it does not lead to policy drift.

Public servants have an obligation to provide high-quality advice that reflects the public interest, but it is ministers, through their democratic mandate, who ultimately decide what that means in practice. The public service must remain responsive, but responsiveness does not mean abandoning independence or engaging in excessive consultation at the expense of action.

This is something we must continue to monitor. The long-term effects of these reforms will become clearer as today’s junior officials rise through the ranks to leadership positions. If the next generation of public servants sees their role as independent of government rather than working in partnership with elected leaders, we risk weakening governance and accountability over time. The goal should be to ensure that public servants remain focused on delivering for the government of the day, while also stewarding the system for future governments.

Conclusion

The US shows us what happens when government institutions collapse: whether through political attack, bureaucratic dysfunction, or loss of public confidence.

While Aotearoa New Zealand’s system is far more stable, we should take note. We have experienced our own periods of upheaval before, and we must be careful not to repeat past mistakes.

At the same time, we must guard against a public service culture that drifts too far from its core role.

Public servants play a critical role in shaping policy, but they are not the decision-makers. Their responsibility is to provide their best advice, support implementation, and ensure the system remains responsive both to this government and the ones that follow.

The lesson is clear: a strong, outcome-driven public service is essential for a well-functioning democracy. To achieve this, public service leaders are right to focus on striking the right balance: serving the government of the day while maintaining a long-term vision for the collective good.