New Public Management
Overview
 
New public management is a management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 philosophy used by government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

s since the 1980s to modernise the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

. 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.
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.
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.
Encyclopedia
New public management is a management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 philosophy used by government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

s since the 1980s to modernise the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

. 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.

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. 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
Public management
Public management is a term that considers that government and non-profit administration resembles private-sector management in some important ways. As such, there are management tools appropriate in public and in private domains, tools that maximize efficiency and effectiveness...

 theories, is more 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
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

, to organizations in the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

, 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. Critics like Dunleavy now proclaim that NPM is 'dead' and argue that the cutting edge of change has moved on to digital era governance
Digital era governance
In the public administration debate about New Public Management , the concept of digital era governance is claimed by Patrick Dunleavy, Helen Margetts and their co-authors as replacing NPM since around 2000-05...

 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
Anthony Giddens
Anthony Giddens, Baron Giddens is a British sociologist who is known for his theory of structuration and his holistic view of modern societies. He is considered to be one of the most prominent modern contributors in the field of sociology, the author of at least 34 books, published in at least 29...

) and particularly the rise of ideas associated with Public Value
Public value
Public value is the equivalent of shareholder value in public management. Public value can be instituted as an organising principle in a public sector organisation, providing a focus in the context of which individual employees are free to pursue and propose new ideas about how to improve the...

 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 . It is supposed to propose a new kind of relationship with citizens.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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