New Public Management is a new concept in the field of public administration that originated in the 1990s. After World War II, two main concepts or ideas were developed in public administration which shaped the structure of public administration. Emphasis was laid on changing its structure. The first concept was New Public Administration, which came in the 1978 decade, and the second concept was the concept of New Look Management, which came in the 1990s. The main concepts of both New Public Administration and New Public Management are: The objective is to increase the efficiency, economy, effectiveness, and productivity of public administration and its priority.
Rise And Growth of New Public Management-
The development of the concept of new public management has happened in the circumstances of liberalization, privatization, and globalization. in the 1990s, the era shift of LPG, i.e., concepts like realization, privatization, and globalization, had already taken place. Whether the process of liberalization, privatization, and globalization had greatly affected the functioning of public administration and its role. At such a time, discussions started on the issue of change with time; the public administration or the bureaucrats also maintain their importance and influence gradually. In these circumstances, various thinkers drew attention to the bureaucracy’s shortcomings and emphasized the concept of new Public management. So key thinkers, who had contributed to the rise and growth of New Public management are-
Key Thinkers of New Public Management-
Christopher Hood, Gordon Tullock, Anthony Downs, and William A. Niskanen each made significant contributions to the discourse surrounding bureaucracy and public management:
- Christopher Hood: Christopher Hood wrote an article in 1999 titled “Public Management for All Seasons,” where he used the term New Public Management. He has been considered as the first person to use this term in systematic ways and explain this term in scientific ways. But the term was there during the 1970s.
- Gordon Tullock: Thinkers like Gordon Tullock, wrote a book, The Politics and Bureaucracy, which was published in 1965. He highlighted the shortcomings of bureaucracy and emphasized the diminishing importance of bureaucracy over time.
- Anthony Downs: Continuing this trend, in 1968, Anthony Downs wrote a book called “Inside Bureaucracy.” In his book, Anthony Downs pointed out the decreasing productivity of bureaucracy. As competition dwindles in bureaucratic areas, the atmosphere of competition is lacking, thus the competitive advantage is diminishing. Therefore, as bureaucracy loses its significance gradually, efforts to increase efficiency in bureaucracy are not made.
- William A. Niskanen: Following this trend, William A. Niskanen wrote a book titled Bureaucracy and Representative Government, published in 1971. William, in his book, highlighted why the importance of bureaucracy is declining? He also mentions that bureaucracy is slowly losing its importance because there is no competitive environment in the field of bureaucracy and there is no competitive transfer. The services and facilities available in bureaucracy are good and the benefits of promotion are good. This is achieved by pleasing one’s officers; hence no effort is made to increase efficiency in the bureaucracy.
In the 1980s, both British Prime Minister Margaret Thatcher and US President Ronald Reagan brought attention to the inefficiencies within bureaucracies and the need for re-evaluation. Let’s break down their perspectives and proposals:
1. Margaret Thatcher’s Critique (1980):
- Thatcher highlighted the drawbacks of bureaucracy, emphasizing its expansion due to the welfare state concept.
- She argued that the increasing responsibilities of the state were leading to a decline in productivity and effectiveness.
- Thatcher advocated for restructuring programs within bureaucracies to ensure profitability and efficiency, particularly in managing public corporations and enterprises.
2. Ronald Reagan’s Perspective (1981):
- Following Thatcher’s lead, Reagan also addressed bureaucratic shortcomings and the role of the state.
- He suggested that the state’s functions needed to be redefined and limited, acknowledging the changing landscape of governance.
- Reagan proposed a shift towards modern governance, where the state’s role would be more streamlined and clearly defined.
3. Reflection on Thatcher and Reagan’s Insights:
- Both leaders recognized the necessity for reform within bureaucracies to adapt to evolving societal needs.
- Their discussions underscored the importance of balancing state intervention with efficiency and effectiveness in governance.
- Thatcher and Reagan’s proposals laid the groundwork for ongoing debates and reforms in public administration worldwide.
So, Thatcher and Reagan’s observations in the 1980s highlighted the need for restructuring bureaucracies to enhance productivity and effectiveness, reflecting a broader global discourse on the role of the state in governance.
Basic Theme of New Public Management-
New public management emerged from Britain’s Thatcherism (the first country to introduce privatization of public enterprises) and America’s Reaganomics. It represents the synthesis of public administration and private administration (business management). In public administration, emphasis is placed on the “what” and “why”, while private administration focuses more on the “how”. New Public Management is also known as ‘Entrepreneurial Government’. Its goal is 3E – Efficiency, Economy, and Effectiveness.
Be it performance-appraisal, managerial, autonomy, cost-cutting, financial incentives, production targets, innovation, responsiveness, capability, accountability, and so on, this approach implies a shift from the government as a direct provider of services to indirect methods, Such as policy-making, assistance, awarding contracts, providing information and coordinating with other factors. In other words, government should no longer ‘undertake’ public activities, but should instead ‘deliver’ public benefits, as well as ‘facilitate’ and ‘promote’ social change and economic transformation. Therefore, New Public Management proposes a number of adjustments to how the public sector is structured and managed in response to the current trends of liberalization, globalization, and privatization.
Anti-Goals of New Public Management-
(i) Politics-administration dichotomy,
(ii) Hierarchy influenced organisation,
(iii) Over centralization of power,
(iv) Primacy of rules in administration,
(v) Rationality in decision-making,
(vi) Non-personal character of administration,
(vii) Non-flexibility of administrative procedure,
(viii) Introvert direction.
Goal/Features of New Public Management-
Osborn and Gabler have identified ten goals (characteristics or principles) of New Public Management.
1. Catalyst Government:
Instead of continuing to provide services, the government should encourage the public sector, private sector, and voluntary/non-governmental sector to become active in solving social problems. Thus, the government itself must guide and not steer.
2. Community Owned Government:
Government should empower citizens, families, and communities, etc. to solve their own problems. Thus, the government should bring all the services out of the control of bureaucracy.
3. Efficient Government:
The government should create competition among providers of different goods and services by rewarding efficiency and economy. This improves performance and reduces costs.
4. Goal-Driven Government:
The government should be governed by its own goals and not by rules and regulations. In other words, it involves transforming rule-guided government into goal-directed government.
5. Result Oriented-Directed Government:
The government should achieve results through target-oriented and mission-directed efforts. It should evaluate the performance of its agencies by outcomes and not by inputs.
6. Consumer-Directed Government:
The government should consider its dependents as consumers. It should try and work toward the consumers and not toward the bureaucracy. In this, they have many options
7. Entrepreneurial Government:
The government should emphasize on earning money and not on spending money. It should focus its energy on raising resources using fees, savings, venture capital, etc.
8. Predictive Government:
Government should identify and prevent problems rather than solving them. Thus, the government must prevent needs from arising before they can meet them.
9. Decentralized Government:
The government should decentralize authority, that is, authority should be spread from higher to lower levels. This involves a shift from hierarchical control to participative management and teamwork styles.
10. Market oriented:
The government should choose the market method and not the bureaucratic method. It should achieve its goals not only through control and direction but also by changing the structure of markets. It must also control change through market forces.
Impact of New Public Management
1. To establish public autonomous institutions.
2. Small-size government will be achieved.
3. Governments are turning into corporations, that is, government institutions are being corporatized.
4. Therefore, cutting budget and welfare expenditure will reduce poverty and crime levels.
5. Civil service reform, for example, can help promote objectivity and professionalism of public administration.
6. Performance appraisal and monitoring is essential.
7. To implement the process of privatization of public enterprises.
8. This will be achieved by devolution of power to the lower levels.
9. Private companies take over the public sector by contracting out their services.
10. In pursuit of openness and transparency in administration, the government should take the following measures.
11. To encourage active participation of the public in administration.
12. As far as publicity part is concerned, we can issue citizen rights leaflets, etc.
Criticisms of New Public Management
There are valid concerns raised by public administration scholars and practitioners about New Public Management. Critics argue that it overlooks the intricacies of public services by emphasizing market policies.
1. Overemphasis on Competition
Critics argue that the new public management places too much emphasis on competition, outsourcing, and market-oriented solutions. Critics claim that it values efficiency, cost reduction, and measurable results more than social outcomes, equity, and community impact. According to them, New Public Management transforms government organizations into profit-driven businesses instead of mission-oriented public institutions.
2. Loss of Public Service Values
According to critics, emphasizing business-like goals, efficiency, and competition corrodes the public service values upheld by public servants. Citizens under the new public management prioritize meeting performance targets over the public interest. It undermines the principles of duty, stewardship, and civic virtue traditionally associated with public service.
3. Neglect of Social Goals
A major criticism of New Public Management is that it forces government agencies to neglect broader social goals and outcomes. By importing business concepts such as competition, performance measurement, and customer service, New Public Management emphasizes measurable results. Is. Government organizations focus on quantitative metrics such as response time, number of people providing a service, or cost per unit of service.
While the output is important, critics argue that it comes at the expense of rigorous measurement of social outcomes. For example, a housing agency focused on output would aim to build the maximum number of houses at the minimum cost. But this may exclude low-income or marginalized groups Focusing on social outcomes will ensure that housing meets community needs and promotes equity
4. Performance Measurement Issues
An important criticism of new public management is that it places too much emphasis on quantitative performance measurement. While measuring outputs and efficiency is important, critics argue that excessive reliance on metrics can create distorted incentives and unintended consequences.
5. Weakened Governance
New public management often fails to strengthen internal governance and management within government agencies. Greater emphasis is placed on market mechanisms, decentralization, and meeting externally set targets. However, without strong internal governance, these reforms languish.
6. Loss of Public Service Ethos
The market logic and business-like focus of new public management may undermine traditional public service motivations and ethos within government organisations. When government agencies are driven to behave like private sector businesses competing for customers and contracts, duty, ethics, and the desire to serve the public interest can erode traditional public service values.
