New public management

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New public management (NPM), a term formally conceptualized by Hood (1991),[1] denotes broadly the government policies, since the 1980s, that aimed to modernise and render the public sector more efficient. The basic hypothesis holds that market oriented management of the public sector will lead to greater cost-efficiency for governments, without having negative side-effects on other objectives and considerations. Ferlie et al (1996)[2] describe 'New Public Management in Action' as involving the introduction into public services of the 'three Ms': Markets, managers and measurement.

Differences from private sector[edit]

Jonathan Boston, one of the early proponents of NPM,[3] identified several ways in which public organisations differ from the private sector:

  • degree of market exposure—reliance on appropriations
  • legal, formal constraints—courts, legislature, hierarchy
  • subject to political influences
  • coerciveness—many state activities unavoidable, monopolistic
  • breadth of impact
  • subject to public scrutiny
  • complexity of objectives, evaluation and decision criteria
  • authority relations and the role of managers
  • organisational performance and effectiveness
  • incentives and incentive structures
  • personal characteristics of employees
  • every election cycle senior manager (Owners) change, along with changed priorities.

Boston claimed that reforms tends to ignore these differences.[3]

Developments[edit]

Some modern authors define NPM as a combination of splitting large bureaucracies into smaller, more fragmented ones, competition between different public agencies, and between public agencies and private firms and incentivization on more economic lines.[4] Defined in this way, NPM has been a significant driver in public management policy around the world, from the early 1980s to at least the early 2000s.

A 2003 Organisation for Economic Co-operation and Development paper described the characteristics of the new public management as decentralization, management by objectives, contracting out, competition within government and consumer orientation.[5]

NPM, compared to other public management theories, is oriented towards outcomes and efficiency, through better management of public budget.[6] It is considered to be achieved by applying competition, as it is known in the private sector, to organizations in the public sector, emphasizing economic and leadership principles. New public management addresses beneficiaries of public services much like customers, and conversely citizens as shareholders.

In 2007, the European Commission produced a white book on governance issues whose objective was to propose a new kind of "relationship between the state and the citizens," reform governance, improve public management and render decision-making "more flexible."[7][8]

Criticism[edit]

Some authors say NPM has peaked and is now in decline.[9] Critics like Dunleavy[4] proclaim that NPM is 'dead' and argue that the cutting edge of change has moved on to digital era governance focusing on reintegrating concerns into government control, holistic (or joined-up) government and digitalization (exploiting the Web and digital storage and communication within government). In the UK and US NPM has been challenged since the turn of the century by a range of related critiques such as Third Way thinking (see Anthony Giddens) and particularly the rise of ideas associated with Public Value Theory (Mark Moore, Kennedy Business School, John Benington, Warwick Business School) which have re-asserted a focus on citizenship, network governance and the role of public agencies in working with citizens to co-create public value, generate democratic authorisation, legitimacy and trust, and stress the domains within which public managers are working as complex adaptive systems with characteristics which are qualitatively different from simple market forms, or private sector business principles.

In his book Bad Samaritans, economist Ha-Joon Chang claims that "increased NPM-inspired reforms have often increased, rather than reduced, corruption," as a result of "more contacts [of state-sector functionaries] with the private sector, creating new opportunities for bribes" and future, direct or indirect, employment in the private sector.[10] Chang claims that "corruption often exists because there are too many market forces; not too few."[11]

Robert Nield, a retired Cambridge economics professor and a member of the 1968 Fulton civil service reform committee, has stated, in reference to civil sector reforms implemented by British PM Margaret Thatcher, a pioneer and strong proponent of NPM, "I cannot think of another instance where a modern democracy has systematically undone the system by which incorrupt public services were brought into being."[12]

See also[edit]

References[edit]

  1. ^ Hood, C. (1991). A Public Management for All Seasons. Public Administration, 69 (Spring), 3-19.
  2. ^ Ferlie, E., Ashburner, L., Fitzgerald, L., & Pettigrew, A. (1996). New Public Management in Action. Oxford: Oxford University Press.
  3. ^ a b Boston (1996)
  4. ^ a b Dunleavy (2006)
  5. ^ Managing Decentralisation: A New Role for Labour Market Policy, Organisation for Economic Co-operation and Development, Local Economic and Employment Development (Program), OECD Publishing, 2003, p 135, ISBN 9264104704, 9789264104709
  6. ^ Aristovnik (2009)
  7. ^ "What is governance?", European Commission website (archived 31/7/2007)
  8. ^ Hacker (2003)
  9. ^ Hughes (2003)
  10. ^ Chang (2008), p. 169
  11. ^ Chang (2008), p. 170
  12. ^ Nield (2002), p. 198

Bibliography[edit]

External links[edit]