New Public Management

New Public Management is a new perspective which evolved in early 1990s, which seeks to merge the core values of business administration in the domain of Public Administration. Public Administration is traditionally associated with rules and procedures, on the other hand business administration deals with achievement and performance. NPM borrows ‘how’ from business management and blends it in ‘what’ of public administration.

The term ‘NPM’ was used for the first time by Christofer Hood in 1991 in his research paper titled ‘A new public management for all seasons’. However the idea was further elaborated by David Osborne and Ted Gaebler in their book ‘Reinventing Government’ publishes in 1992.

There was a time when public bureaucracy was viewed sure solutions of all the problems encountered by society. As the society evolved, government took multifunctional role. By the 1970s huge criticism arised against budget maximising and bureaucrates’ self interest attitude. The size of bureaucracy and cost of administration came to be questioned. There was a demand for thorough restricting of public delivery system.

Related Article: Public choice theory

NPM emerged out of Thatcherism, Reaganism of 1980s. Political ideology of Neo-liberalism, New Right philosophy, Public Choice approach helped in evolving the idea of NPM.

NPM also known as ‘Entrepreneurial Government’ aims at efficiency, effectiveness and economy in performance of public sector by employing modern managerial tools such as performance appraisal, cost cutting, functional autonomy, financial incentives, output targets, innovation, market orientations, responsiveness and accountability.

As the NPM is the product of LPG era, it advocates fundamental change in the role of bureaucratic state in the field of economy and society. It relies on the market as the key regulator of social and economic process. NPM advocates the roll-back of state thesis in which state assumes the role of a facilitator and promoter of public activities rather than doer of such activities

About the nature of government under NPM, Osborne and Gaebler remark, ‘we do not need more government, we need better government, to be more precise we need better governance’. Governance is an act of collectively solving out problems. Government is the instrument, we use. The instrument is outdated and it is time to remake it.

The basic idea behind the NPM is to devise new tools, techniques and procedures to finetune the public administration so that it can effectively achieve its goals in the changing environment of LPG. For this purpose it borrows methods, practices and procedures from business administration and advocates the adoption of same in Public Administration. In brief, public management derives its goals from Public Administration and its instruments from Business Administration.

Defining attributes of Public Management are three – localization, externalisation and de-bureaucratisation.

Localisation refers to inclination towards devolution and de-centralisation. Externalisation refers to contracting out of government functions to non-government agencies. In the process, government releases itself from the task of action execution and thus enables to concentrate on policy making. De-bureaucratisation has many elements like de-layering, downsizing, decentralisation, splitting of hierarchy or splitting an organisation in autonomous units. Debureaucratisation leads to simplification of procedures, cutting down the red-tape and delays etc.

Ideology behind New Public Management:

NPM is a market based ideology that talks about importing ideas generated in private organisation into public sector organisations. Many theorists point out that NPM has historical roots in two theories:

1. Public choice theory

2. Neo-Taylorism

Public Choice Theory was concerned with replacing the government with the market. It talked about institutional pluralism i.e. existence of multiple institutions providing goods and services including policy framing. It is also known as political economy approach.

Neo-Taylorism is concerned with internal organisation of the bureaucracy like introducing certain techniques and methods from private management into public sector. There is lack of personal responsibility among administrators and the individual administrator plays safe rather than showing initiatives. New-Taylorism wanted this status-quo attitude of bureaucracy to change.

NPM came into existence in 1990s due to inefficiency of centralised bureaucratic structure. NPM rejected many features of traditional public administration like hierarchy, centralisation, over emphasis on rational decision making, supremacy of rule and regulations, rigidity of administrative process, lack of customer orientation and emphasis on politics-administration dichotomy.

Osborne & Gaebler listed following ten features of NPM:

1. Catalytic role of government

2. Empowerment of citizen

3. Efficiency and economy in performance

4. Emphasis on goals rather than rules

5. Customer oriented government

6. Competitive government

7. Anticipatory approach

8. Enterprising government

9. Decentralisation of authority

10. Emphasis on market mechanism

Criticism of New Public Management:

Over emphasis on the market mechanism leads to promotion of individual interest at the cost of public interest. The publicness aspect of public administration should not be sidelined.

Introduction of NPM in government produces a hybrid kind of administrative structure leading to clash of values.

There is also a conflict between citizen orientation and customer orientation.

NPM perspective fails to present a clear-cut concept of accountability. Public administration focuses on democratic accountability but NPM though talks about accountability, yet it is focus is confined on result and output rather than accountability to public.

NPM gives significant place to managerial practices and fails to assign important place to policy making.

NPM fails to clarify relationship between citizens and political representatives. It does not clarify the relationship between market oriented government and democratic institutions.

It has been argued that NPM perspective is not suitable for developing countries due to conflict between market economy’s interest and prevailing social concerns. Also the idea of rollback of state does not appear viable in a developing country like India as it would lead to a clash between ideals of equity and social justice on one hand and demand for efficiency on the other hand.

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  Posted on Thursday, November 5th, 2015 at 12:52 PM under   Polity