Principles of New Public Management (NPM) and Reinventing Government

Posted on Aug 24, 2024 in Social sciences

The Theoretical Basis of New Public Management

Public Choice and Managerialism

New Public Management (NPM) is rooted in two approaches: public choice and managerialism. Both question traditional bureaucracy and advocate for more efficient and effective government.

Public Choice

Public choice theory applies economic principles to political science, assuming individuals are rational and seek to maximize their own welfare. It suggests that market mechanisms can improve government efficiency.

Key tenets of public choice in NPM include:

  • Individuals are self-interested and seek to maximize their own benefits.
  • The market is the most efficient way to allocate resources.
  • Government should be decentralized and competitive to better serve citizens.

Management – Private Management as a Reference

Managerialism applies private sector management principles to the public sector. It emphasizes efficiency, effectiveness, and customer satisfaction.

Key features of managerialism in NPM include:

  • Decentralization and deconcentration of power
  • Performance measurement and management by objectives
  • Emphasis on results and customer satisfaction
  • Adoption of private sector management techniques like Total Quality Management and Lean Management

“Reinvention” of Government and Public Administration

Starting in the 1980s, modernization efforts aimed to “reinvent” government by making it more efficient, effective, and responsive to citizens. This movement drew inspiration from private sector best practices.

Entrepreneurial Spirit in Government

While acknowledging that government is not a business, proponents of reinvention argue that it can benefit from an entrepreneurial spirit. This involves:

  • Focusing on results and customer satisfaction
  • Empowering employees and encouraging innovation
  • Seeking out and adopting best practices

Osborne and Gaebler’s Principles

David Osborne and Ted Gaebler, in their book “Reinventing Government,” outlined ten principles for transforming government:

Four Innovative Beliefs:

  1. Belief in effective government
  2. Civilized society requires effective government
  3. The problem lies in the systems, not the people
  4. Traditional ideologies offer limited solutions

Ten Principles:

  1. Catalytic Government: Steering rather than rowing – focusing on enabling and empowering others to provide services.
  2. Community-Owned Government: Empowering citizens to participate in governance and service delivery.
  3. Competitive Government: Introducing competition to improve efficiency and quality.
  4. Mission-Driven Government: Focusing on outcomes and results rather than rules and regulations.
  5. Results-Oriented Government: Measuring performance and allocating resources based on results.
  6. Customer-Driven Government: Prioritizing citizen needs and satisfaction.
  7. Enterprising Government: Emphasizing earning revenue and managing resources effectively.
  8. Anticipatory Government: Proactively addressing challenges and preventing problems.
  9. Decentralized Government: Empowering frontline workers and promoting teamwork.
  10. Market-Oriented Government: Leveraging market mechanisms to improve efficiency and responsiveness.

Part III: Total Reengineering – Towards a Corporate and Athletic Public Administration

NPM advocates for a more flexible, entrepreneurial, and change-oriented public administration. This requires a shift in mindset from public servants to “public entrepreneurs.”

Public Administration as a Service and Holding Company

Modern public administration should operate like a service-oriented holding company, with these key elements:

  • Business Philosophy and Target Image: Viewing citizens as customers and prioritizing their satisfaction.
  • Holding Structure as an Organizing Principle: Decentralizing service delivery through autonomous units.
  • Controlling System as an Instrument of Management: Using contracts, targets, budgets, and performance measurement to ensure accountability and efficiency.

Business Philosophy as a Target Image

This approach emphasizes:

  • Providing high-quality services that meet citizen needs
  • Redefining the relationship between citizens and government, with citizens as active participants and customers

By embracing these principles, public administration can become more effective, efficient, and responsive to the needs of citizens.