Hollowing Out the State-New Zealand

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    Hollowing out the State? Some Observations on the Restructuring of Hospital Services in NewZealandAuthor(s): J. Ross BarnettReviewed work(s):Source: Area, Vol. 31, No. 3 (Sep., 1999), pp. 259-270

    Published by: Blackwell Publishing on behalf of The Royal Geographical Society (with the Institute ofBritish Geographers)Stable URL: http://www.jstor.org/stable/20003991 .

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    Area (1999) 31.3, 259-270

    Hollowing out the state? Some observationson the restructuring of hospital services inNew Zealand

    JRoss BarnettDepartment of Geography, University of Canterbury, Private Bag 4800, Christchurch, New Zealand.

    Email: ross(geog.canterbury.ac.nzRevised manuscript received 6 November 1998.

    Summary This study applies Jessop's idea of the 'hollowed-out' state to an analysis of therestructuring of hospital services inNew Zealand. Decentralization of responsibility for thefunding and provision of hospital services to regional and local levels has had distinct fiscaland political advantages for the state and is rapidly changing the geography of hospitalprovision.

    IntroductionThis paper considers the impact of health restructuring upon the hospital sector, with specific referenceto recent trends inNew Zealand, where, as inotherdeveloped countries, the welfare state isundergoingsignificant change. Hospital closures, long waitinglists for surgery and concerns about the overallavailability and quality of services are all symptomaticof an environment where different forms of rationinghave become the norm. As these examples suggest,the guarantees of universal coverage and unlimitedaccess to services can no longer be taken for grantedas they were during the long boom of economicprosperity following the Second World War.

    In recent years, a number of different frameworkshave been offered to describe the transformationof welfare seen in New Zealand and elsewhere.Foremost among these are attempts by regulationtheorists to provide a conceptual framework forunderstanding processes of capitalist growth, crisisand reproduction. However, although the theory hasyielded useful insights into contemporary restructuring processes, there is continuing debate about itsusefulness and robustness. Pinch (1997, 68) summarizes its appeal by suggesting that it incorporatesmodern influences such as globalization, that it isless dogmatic than traditional Marxist theories ofchange, and that it permits a range of alternative

    responses to similar economic circumstances, influenced by history, culture and tradition, which do notneed to be fitted into some classical model ofeconomic relations. Criticisms pertain mainly to itshigh level of generalization and limited incorporationof welfare issues. It takes little account of the specificlinks between accumulation crises and welfarechange (Mohan 1995a) and pays insufficient attention to the way inwhich new modes of regulationare played out in the public and welfare sectors(Carter and Rayner 1996).

    This study builds on these and other attempts (egPinch 1994; Bradford 1995; Peck and Jones 1995;Patterson and Pinch 1995) to subject regulationistideas to greater empirical scrutiny. In particular, itseeks to understand the extent to which Jessop's(1994a, 264) idea of the 'hollowed-out' state isuseful for understanding processes of health-sectorrestructuring, with particular reference to hospitalservices in New Zealand. By focusing on centreperiphery tensions in the funding and provision ofhospital services, the study attempts to provide anempirical response to calls by writers such as Peckand Tickell (1995), Goodwin and Painter (1996) andJones (1997) to spatialize regulation theory. It alsobuilds on earlier political-economic interpretations ofchanges in the hospital sector (Bohland and Knox1989; McLafferty 1989; Mohan 1991; 1995b;Salmon 1995) and more cultural (Kearns and Joseph

    ISSN 0004-0894 ?) Royal Geographical Society (with The Institute of British Geographers) 1999

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    260 Barnett1997) or traditional welfare concerns (Powell 1992)

    with hospital restructuring.The remainder of the paper, therefore, is organ

    ized into three sections. The first outlines Jessop'sidea of the hollowed-out state and a number ofunresolved problems with this concept. This is followed by a discussion of welfare and health-sectorrestructuring in New Zealand with particular reference to the impact of the 1993 reforms on thedevolution of responsibility for the funding and provision of hospital services. The final section thenassesses whether such trends are indeed consistentwith Jessop's ideas of a hollowing out of the state, orwhether more complex processes have unfoldedthat cannot neatly be packaged into some 'postFordist' logic. Iconclude with a brief discussion ofsome possible future lines of inquiry using regulationtheory as a framework for understanding welfarerestructuring.

    Understanding the 'post-Fordist' (?)'hollowed-out' stateDespite the limitations of regulation theory as anoverarching explanation, several writers (Bakshi et al1995; Pinch 1995; Goodwin and Painter 1996;Jessop 1997a) have attempted to develop moredetailed conceptualizations of the crises of Fordismand the emergence of new geographies of regulation. Perhaps foremost amongst these has beenJessop (1994a; 1994b; 1995), who suggests thatthere are two elements of 'post-Fordism' that arecrucial to understanding changes inwelfare. The firstof these is the emergence of a 'Schumpeterianworkfare state', characterized by an emphasis oninnovation and entrepreneurialism, and with the goalof strengthening the structural competitiveness ofthe national economy by intervening on the supplyside, assisted by lessening the financial burden ofwelfare and subordinating social policy to the needsof the labour market. Jessop's second element, thehollowing out of the welfare state, involves a complex process of power displacement, whereby statecapacities are said to be transferred upward, down

    ward and outward to alternative powerbases: tosupranational organizations, to new crossnationalgroupings and to restructured regional and locallevels of government. Hollowing out, however, isnotjust a process of devolution; it is also one of privatization, since it involves the transferral of govern

    ment functions to new forms of governance,

    including a wide range of non-elected community,non-profit and private providers.

    So if the workfare state provides the economicframework and the hollowed-out state representsthe institutional arrangements, are these adequatefor understanding welfare restructuring in the 1 90s?

    Although Jessop (1995, 1619) acknowledges thattrends such as hollowing out have an 'essentiallydescriptive, synthetic and generalized character', thehollowing-out metaphor is nevertheless a potentiallypowerful heuristic, in that it focuses attention onactual mechanisms of change and the extent to

    which new forms of regulation may help resolvevarious crisis tendencies. Nevertheless, a number ofquestions stillpresent themselves: first, exactly whathas been hollowed out?; second, what have been thecauses and impacts of the process?; and third, atwhat spatial scales has hollowing out manifesteditself?

    With respect to the first question, Jessop (1994b)argues that the powers of nation states are beinglimited through various forms of displacement. However, it isclear that not all state functions (or powers)need be hollowed out; for example, states may notprovide services, but remain dominant in terms offunding and regulation. Although this is recognizedby Jessop and reflected in his more recent ideason 'meta-governance' (Jessop 1997a, 575; 1997b;1998) and in a variety of empirical work (see, forexample, Patterson and Pinch 1995; Peck and Jones1995), the exact conditions under which certainstate functions and not others have been hollowedout remain unclear. Although Jessop acknowledgesthat theworkfare state can manifest itself in a varietyof ways, geographies of welfare change need to takethe global scale of analysis more seriously inorder tounderstand adequately the level of variation andevents within individual states (Mohan 1998).Writers such as Merrien (1998) and Stoker (1998),for example, stress that neoliberal policies of welfareretrenchment are less typical of other welfare statesand therefore reject any simple convergence in

    wel