New public management

New public management is a management philosophy used by governments since the 1980s to modernise the public sector. New public management is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. The main hypothesis in the NPM-reform wave is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.

Differences from private sector

Jonathan Boston (1996), one of the early writers of NPM, 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
• incentives and incentive structures
• personal characteristics of employees

Boston also identifies that reform tends to ignore these differences.^[1]

Later Developments

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.^[2] Defined in this way NPM was an intellectual force in public management outside the USA from the early 1980s to the early 2000s.

NPM, compared to other public management theories, is more oriented towards outcomes and efficiency through better management of public budget.^[3] 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.

Controversy

Some authors say NPM has peaked and is now in decline.^[4] Critics like Dunleavy ^[5] now 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, networked 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.

The European Commission wrote a white book on governance issues to reform governance, improve public management and the flexibility in decision-making ^[6]. It is supposed to propose a new kind of relationship with citizens^[7].

See also

• Big Society
• Lean Government
• New Public Administration

References

1. ^ J. Boston, J. Martin, J. Pallot, and P. Walsh, Public Management: The New Zealand Model. Auckland: Oxford University Press, 1996
2. ^ Patrick Dunleavy, Helen Margetts. (2006). 'New Public Management is Dead: Long Live Digital Era Governance', Journal of Public Administration Research and Theory, July 2006.
3. ^ Aristovnik, Aleksander & Seljak, Janko, 2009. "Performance budgeting: selected international experiences and some lessons for Slovenia," MPRA Paper 15499, University Library of Munich, Germany.
4. ^ Hughes, Owen 2003 Public Management and Administration: An Introduction, 3rd ed. Bassingstoke. UK: Palgrave
5. ^ Patrick Dunleavy& Helen Margetts. (2006). 'New Public Management is Dead: Long Live Digital Era Governance', Journal of Public Administration Research and Theory, July 2006.
6. ^ http://ec.europa.eu/governance/index_en.htm
7. ^ "De l’économie du don à l’économie de l’échange en Europe. L’amélioration de la situation de l’usager au dépens de l’administration", Revue Pyramides, n° 7, Relations de Service et secteur public, by Violaine HACKER, http://www.cerap.be/spip.php?article38

External links

• The New Public Management and its legacy - World Bank summary of the NPM track record (1990) (archived at archive.org)
• Analysis of NPM in one Japanese city