New Public Management Approach

The Concept of ‘New public management Approach’ New public management (NPM) denotes broadly the government policies, since the 1980s, which aimed to modernize and render more effective the public sector. 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.

The last two decades to 2006 have been associated with a fundamental shift in the principles of public sector management in all industrialized countries. This had, in turn, been a product of a general reinvention of the role of government, its agencies, the means by which services are delivered, and employment practices within public sector organizations. At its core, this has been associated with a move away from a traditional model of public administration towards variants of the ‘new public sector management’ model.

The traditional model of public administration, based on the doctrine of the separation of powers, was associated with the delegation of a specific set of functions to public administrators in the implementation of policy and the expenditure of public funds. A central principle associated with this model was the idea that public service employees were independent from the political process. Their role was encapsulated by the maxim of providing advice ‘without fear or favour’. This capacity for independent advice was assured through the idea of a career in the public service and explicit norms of behaviour and professional conduct.

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It has also been presumed that public service employees were less likely to be motivated by extrinsic rewards, more likely to identify with value of service to the public and the provision of public goods, and have a strong commitment to principles of justice, fairness and equity in discharging their duties. This traditional model of public administration was associated with an expansive view of the role of government, which prevailed throughout much of the twentieth century.

This view produced a significant role for government in regulating economic and social relations, owning productive assets and producing goods and services, in a range of areas in the period until the mid to late 1970s. From that time, the role of government and public sector organisations came under sustained scrutiny, with the result that governments privatised production of many goods and services previously seen as the natural domain of government, such as essential services; withdrew from the direct control f production of goods and services funded by the public purse through corporatization and outsourcing; and encouraged the contestability of markets in which the government had previously been a monopoly producer. This general reorientation of the role of government has been associated with changes to internal organizational attributes and management practices within public sector organizations. This ‘new public management’ has shifted the focus from public service to service delivery.

The principles associated with new public management have been informed by the idea that public service needs to be more responsive to both the preferences of beneficiaries, citizens who pay for service provision through tax, and politicians who represent the collective will and make policy choices. From this perspective, ministers are seen as analogous to customers, and citizens to consumers. New public management has been informed by economic doctrines that have advocated privatization, contestability in the delivery of public goods and services and, where possible, the provision of these goods and services through the private sector.

For the core public service, this has also been associated with significant reforms to public employment systems and the norms of what constitutes professional public service. For Australian public service employees, this shift has involved the displacement of core legislative protections associated with independence by ‘value statements’ and ‘codes of ethical conduct’, along with protective legislation for whistleblowers. More generally, this shift has occurred within the context of a decentralization of managerial responsibilities for workforce planning and human resource management to individual departments and agencies.

For middle managers, this has meant a significant increase in responsibility for both ensuring probity in managerial practice and dealing with the ethical issues and conflicts that arise in dealing with ministers and stakeholders, the responsible expenditure of public money and the fair and just delivery of services to the community. 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.

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. NPM, compared to other public management theories, is oriented towards outcomes and efficiency, through better management of public budget. 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. " Criticism Some authors say NPM has peaked and is now in decline. Critics like Dunleavy 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.

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. Chang claims that "corruption often exists because there are too many market forces; not too few. " 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. "

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