Explain the Concept of the New Public Management.

The term new public management encompasses a wide range of techniques and perspectives that are intended to overcome the inefficiencies inherent in the traditional model of public administration. Robert Behn defines the New Public Management as “the entire collection of tactics and strategies that seek to enhance the performance of the public sector.”

The starting point is that the traditional bureaucratic structures that ushered in the industrialized economies of the 20th century may have been appropriate for that era but have reached a point of diminishing returns. The large size and rigid structures of the traditional system are too cumbersome for the new era of instant communication and an economy in which economic value is based on information and its manipulation rather than industrial production. Production is still important, of course, but it is increasingly based on information systems.

Controlling behavior of workers from the top does not allow those closest to service delivery to react quickly enough. Thus the new public management favors decentralized administration, delegation of discretion, contracting for goods and services, and the use of the market mechanisms of competition and customer service to improve performance.

It aims to achieve accountability through the measurement of outcomes rather than accounting for inputs. Performance measures will take the place of tight control from the top through rules and regulations. Granting more discretion to managers to manage is necessary; if they are to be held accountable for their performance, they must have the flexibility to use their judgement.

In the United States the NPM was embodied in the ‘Clinton Administration’s National Performance Review (NPR). The proponents of the NPR contended that the prevailing paradigm of government organization in the U.S. was established during the progressive era at the turn of the century and was a reaction to the negative effects of the spoils system with its lack of competence and susceptibility to governmental corruption.

The progressive paradigm of government organization, they argued, was designed during the industrial revolution and was modeled on large scale bureaucracy with hierarchical control from the top to ensure responsiveness to law and adherence to policy.

But they argued that with the coming of the information revolution in the late 20th century, the usefulness of the bureaucratic paradigm had been superseded by the need for more flexible organizations that can operate in a Profoundly changed environment of global competition. The governmental reforms of the progressive era had been developed and elaborated so much that the rules and procedures that originally facilitated management came to choke off innovation.

The admitted original benefits of large scale organization prevalent throughout the federal government. were diminishing and the originally useful reforms had been counterproductive for some time.

To Guy Peters the new public management includes a range of reforms that have been tried over the past two decades by governments seeking to improve efficiency. The approaches of the NPM include more participation, flexibility, and deregulation internally, and the use of market mechanisms externally.

Perhaps the most dominant theme of the new techniques is the attempt to use market mechanisms to improve performance in the public sector. This includes privatization, in which functions formerly performed by government are given over to private sector or business organizations.

In the celebrated case of New Zealand, the government privatized state enterprises in telephone service oil production, insurance, post office, and air transport. In economies where the governmental sector is smaller and most sectors of the economy are already in private hands, such as the United States, privatization has taken the form of private sector delivery of goods and services that are paid for by the government, referred to as “contracting out.”

It is argued that businesses act more efficiently than governments because of different incentives and greater flexibility, and so contracting will save the taxpayers money.

Donald Ketti summarizes the goal of the new public management approach as aiming to “Remedy a pathology of traditional bureaucracy that is hierarchically structured and authority driven,” and “to root out authority-driven hierarchical systems.”

He summarizes the six “core characteristics” of the New Public Management Approach as productivity, marketization, service orientation, decentralization, a policy orientation, and accountability for results. Thompson arid Thompson observe that the new public management approach “borrowed primarily from the literature of business administration, calling for more managerial freedom to use resources, a focus on results rather than inputs, and greater reliance on the private sector for service delivery.”

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