Results-oriented Budget Practice in oecd countries odi working Papers 209

2.6 Lessons for developing countries 
New Zealand’s experiment with hard edged or new contractualism has been keenly observed from 
afar but of, developed countries, only Iceland and Singapore have adopted selected features and 

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there has been no identified adoption by transitional or developing countries save Mongolia 
(Laking, 1999). Schick argues that the New Zealand model does not meet the needs of such 
countries or is beyond their reach. He does not accept the view that New Zealand offers practical 
guidance to enable developing countries to surmount their deficiencies in public management. The 
World Bank questions the feasibility of such policy transfer: “what is feasible in New Zealand may 
not be workable in many developing countries” (World Bank, 1997, p 87). Bale and Dale argue for 
caution in that adoption of the New Zealand reforms requires the precondition of
“a tradition of politically neutral, relatively competent civil service, little concern about 
corruption or nepotism, a consistent and well enforced legal code including contract 
law, a well functioning political market, and a competent, but suppressed private sector” 
(1998, p 116). 
Schick similarly counsels caution and calls for developing countries to take “[b]asic steps to 
strengthen rule-based government and pave the way for robust markets”, which he sees as a 
precondition of public service modernisation New Zealand style (Schick, 1998, p 123). He 
contrasts the New Zealand polity, which he described as highly formal with well established rule of 
law and formalised relationships between ministers and civil servants, with the situation in 
developing countries, for example Peru, which are often characterised by high degrees of 
informality. Such informality may manifest itself in two parallel budgets, one official and one real 
with similar arrangements for the civil service itself. Caiden points out that poverty, uncertainty, 
corruption and poor information lead to the proliferation of counter-productive rules. Officials are 
“often forced into evasion of the rules, and rules evaded for legitimate purposes are easily 
circumvented for personal gain” (Caiden, 1988, p 44). 
Borrowing on Hood’s application of cultural theory to new public management (Hood, 1998), Table 
3 classifies New Zealand as high grid, low group and developing countries as low grid, high group.