Factors that given rise to New Public Management perspective

New public management perspective prescribes a set of reform. Beginning 1980s, there has been a widespread attack on public sector and bureaucracy. Bureaucracy was considered to be too unwieldy, unresponsive, inefficient, ineffective and unable to withstand the competition.

There are several factors which has given too rise to new public management perspective.

Increase in Government Expenditure:

Government expenditure has been increased during 1970s and, 1980s, in many countries due to mis-management, corruption and inefficiencies in governmental operation. The rise in government expenditure along with poor economic performance. Hence, government organization has shift towards privatization and quasi-privatization of certain activities.

Influence of Nee-liberalism:

Neo-liberalism ideology has been influenced during the 1980s and 1990s. Neo-liberalism favored dominant on market forces, its basic concepts such as efficiency, markets, competition, consumer choice etc.

It favored cutting back of welfare state, maximizing individual liberty and freedom, and encouraging market mechanisms leading to equitable outcomes. The state promote the efficient functioning of markets.

Impact of New Right Philosophy:

In the year of 1970s, the new Philosophy Propagated in UK as well as U.S.A, it favored markets as more efficient for allocation of resources. This perspective had a global impact in generating a consensus about the efficiency of market forces. Thus, markets were considered to play a key role in the creation of economic wealth and employment.

Pubic Choice Approach:

The public choice approach had a major impact on the evaluation of the new public management perspective. All human behavior is dominated by self-interest. The human being is considered to be a utility maximize, who intends to increase net benefits from the action or decision.

According to the public choice theorists such behaviors and attitudes lead to an increase in size and costs of government and inflated departmental budgets. Bureaucracy is responsible for the declining quality of public services. This thinking led to the new paradigm of government sensitive to market forces.

Washington Consensus:

During the 1980s and 1990s, the state playing a significant role in economic development and poverty is the common phenomena especially in the developing countries.

The need for bringing about adjustments in the economy on various fronts such as financial and banking sectors and reduced role for the state in economic development have been considered indispensable. This led to the emergence of Washington consensus. It basically comprises the reform measures promoted by International Monetary Fund and World Bank institutions.

The emergence of new public management perspective has been focus basically on the following:

  • Restructuring government operations along market lines.
  • Distinguishing strategic policy formulation from implementation.
  • Emphasizing performance evaluation and quality improvements.
  • Stressing upon effective services provision and value for money for the customer.

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