Reshaping Community Mental Health Services in a Restructured State: New Zealand 1984-97

The concept of the hollow state has been proposed as a general framework for public sector restructuring, with New Zealand seen as a leader in reforming social and welfare services, including mental health. This article reports on documentary and interview research into the provision of community-based mental health services in terms of hollow state characteristics: privatization, decentralization and flexibilization. The evidence suggests that privatization occurred only at the margins, that decentralization led to significant regional differences in contractual arrangements and services and that flexibilization brought mixed blessings to the agencies involved. Consistent with findings from elsewhere related to hollow state mechanisms, performance assessment and accountability became more difficult. It is concluded that such frameworks are not appropriate for sectors such as mental health where there is high uncertainty and vulnerable service recipients. Recent policy changes suggest a retreat from privatization and flexibilization, and the emergence of a new balance between centralized and decentralized decision making.