Testing the Discourse of Declining Policy Capacity: Rail Policy and the Department of Transport

It has been observed that countries that implemented new public management (NPM) reforms are currently witnessing growing complaints about a decline in the policy capacity of their public services. Australia is a part of this trend with public sector leaders increasingly voicing concern about policy capacity decline within the Australian Public Service (APS). This article sets out to examine whether there is an empirical basis for this discourse and to assess allegations that NPM reforms have contributed to any related shifts. It draws on rail policy and the Department of Transport as its case study. It finds that the reforms transformed role of the department in a way that enhanced strategic policy capacity. However, the reforms also introduced a number of structural impediments that make it difficult for the new role to be effectively executed.