Abstract
It is argued that, as a result of recent restructuring, the state in New Zealand has paradoxically become minimalized as well as more powerful and pervasive. This paper presents public sector restructuring as the policy context of the reforms and neo‐liberalism as the critique of state reason that has been used to explain the reduction of the state in terms of the numbers of people it employs and the scope of its direct control. Reforms to tertiary education are seen to follow the restructuring of the core public sector. Michel Foucault's (1991a) notion of governmentality, it is argued, is a powerful critique of neo‐liberalism through focusing on practices rather than theories of state. One element of the reforms to tertiary education ‐ the practices of the New Zealand Qualifications Authority (NZQA) ‐ is presented as a counter instance of neo‐liberalism. The account of the governmental practices of NZQA illustrate that neo‐liberalism is an inadequate account of state reason because it cannot explain the increasing power and pervasiveness of the state. The paper concludes that the practcies of management of tertiary educational institutions under these conditions are seen as a useful agenda for further research.

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