Details about New Public Management.

1. New Public Management-Outlines
•What is NPM
•Background
•Factors behind the emergence of
NPM,
•Elements of NPM
•NPM-Preconditions for Success
•NPM-Strengths and Weakness
•NPM in Bangladesh
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2. New Public Management-Introduction
• NPM is a label used both to define a general trend towards changing the style of
governance and administration in the public sector and to describe a number of
reforms that were carried out in several countries during the 1980s and 1990s.
• NPM is a two-level phenomenon. At the higher level, it is a general theory or
doctrine that the public sector can be improved by the importation of business
concepts, techniques, and values.
• The most innovative facet of NPM is that it attempts to develop solutions to
management issues based on market theories and subordinate to them of
administrative rules and regulations.
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3. New Public Management-Introduction
•NPM is an administrative approach in which there are
attempts to slow down government growth, shift services
toward privatization, enhance automation – especially
information and communication technologies (ICT) or simply
information technologies (ITs) in service provision, and
development of a more international and globally oriented
public workforce. At root, the new public management is
composed of the following five ideas:
•Alertness-Government should anticipate problems and
changes before they emerge, then deal effectively with
them.
• Agility-Government should be entrepreneurial, open, and
communicative. It should empower citizens and public
employees alike.
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4. New Public Management-Introduction
• Adaptability-Government should continuously improve the
quality of its programs and services, and it should do so by
assessing its performance with measurable results. It should alter
with changing circumstances and take advantage of new
opportunities.
• Alignment-Government should saturate itself with knowledge by
effectively managing its information technology. Governments
should collaborate with other governments and the nonprofit
and private sectors to achieve social goals.
• Accountability-Government should have a clear and compelling
mission that focuses on the needs of people. Government should
improve its accountability to the public interest, which should be
understood in terms of law, community, and shared values.
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5. NPM-Background
• Traditional institutions of public administration sought to provide a
framework of support to the government by ensuring the performance
of the basic functions.
• In course of time, weaknesses of the traditional approach began to be
identified, and circumstances coerced governments to consider
alternative approaches to organization and delivery of public services.
• This is understandable from the point of view of the changing role of
public officials.
• They are now required to manage resources and achieve results
rather than simply engaging in administering rules and programs.
• Many of the values in traditional public administration continue to
remain valid in the contemporary world.
• However, the framework under which these activities take place has
been considerably altered in the face of increased criticism of the
public sector, continuing scrutiny of its performance, and the ever
widening gap between the availability of resources and the demands
for services.
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6. NPM-Background
•The answer to these problems was to be found in a series of
innovations which suggested the use of the economic
market as a model for political and administrative
relationships-public management
•The focus of public management is on the efficient delivery
of services. Because politics is a key dimension to
government, public management requires mastery of
political as well as administrative skills.
•Public mgt is concerned with efficiency, accountability, goal
achievement and so on.
•Public mgt involves-providing leadership, shaping policy,
planning programs, designing organizational environments,
communicating with constituencies, budgeting resources,
staffing and Directing Work flow
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7. NPM-Background
• Over the last two decades, public management has undergone
substantial changes in both developed and developing countries.
• Until the 1960s, the interventionist character of the government was
quite evident in production, provision and regulatory activities.
• The features of this interventionist state were clearly set out by Max
Weber with strong echoes from other scholars.
• Policy-administration dichotomy, rule-based administration,
meritocracy, career system, impersonality, division of labor and
hierarchy are the essential characteristics of the system .
• The contributions of the old system were enormous. However, since
the 1970s, the old administrative model has come under severe
criticisms for various reasons.
• Thus, the issue of government failure is a critical factor in the analysis
of the emergence of the NPM.
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8. New Public Management (NPM)
• Despite its contribution, the old system has come under severe
pressures since the mid-1970s. The first set of criticisms focused on
major economic problems:
• governments were too large, consuming too many scarce resources;
• governments were involved in too many activities, whereas alternative
means of provision existed for many of these; and growing inflation,
excessive costs and excessive bureaucracies resulted from state
intervention
• There was a call for “reinventing” government on the basis of a market
economy (Osborne and Gaebler, 1992).
• Expressed in economic terms, the formula was preached by the WB,
the IMF, the OECD and so forth.
• This also became a powerful instrument for change in developing
countries, which had to accept the prescriptions of the international
donor agencies to get financial assistance
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9. NPM-Causes
•The second aspect of criticisms relates to the pattern of
administration. This traditional model of administration is
rejected on the following grounds
•Fiscal crises of governments,
•Poor performance of the public sector in different arenas,
•imperious bureaucracy,
•lack of accountability,
•corruption, changes of people’s expectations and the
emergence of better alternative forms of service delivery.
•On the contrary NPM promises a leaner and better
government, decentralization, empowerment, customer
satisfaction and better mechanisms of public accountability.
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10. NPM-Causes
• Thus, these two criticisms have paved the way for the emergence of a new
model, with different incarnations, such as
• “new public management” (Hood, 1991)
• “market-based public administration” (Lan and Rosenbloom, 1992),
• “managerialism”(Pollitt, 1990),
• “reinventing government” (Osborne and Gaebler, 1992) and
• “post-bureaucratic” model (Barzelay, 1992).
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11. NPM-General Elements by Hood
• According to Hood (1991: 4–5), NPM-style reform comprises
seven fundamental doctrines:
• ‘Hands-on professional management’ that allows ‘managers to
manage’ and is characterized by the ‘active, visible, discretionary
control of organizations’ with an emphasis on concentrating
power and accountability rather than the diffusion of power
propagated by PPA-type public administration;
• ‘● Explicit standards and measures of performance’ achieved by
means of the ‘clarification of goals, targets, and indicators of
success’;
• ● a reversal in focus from ‘input controls and bureaucratic
procedures to rules relying on output controls measured by
quantitative performance indicators’;
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12. NPM-General Elements by Hood
• ● A move from ‘unified management systems to disaggregation
or decentralization of units in the public sector’, particularly in
the separation of policy implementation from policy-making;
• ● The introduction of more competition into the operations of
public agencies through increased use of contracts in order to
reduce costs and achieve higher standards, both between
agencies in the public sector and between public organizations
and private firms;
• ● An emphasis on ‘private-sector-style management practices’
that include ‘short-term labour contracts, the development of
corporate plans, performance agreements, and mission
statements’; and
• ● A ‘stress on cost-cutting, efficiency, parsimony in resource use,
and “doing more with less”’.
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13. NPM-Preconditions for Success
• There should be a reasonable level of economic development and
experience of the operations of markets, since NPM principles are
essentially market-oriented.
• A well-developed judicial system is required to provide the rule of law.
Markets are ineffective without the rule of law, for example to ensure
compliance with contracts.
• The new model assumes that the basic administrative processes work
as a foundation upon which a market-oriented system such as NPM
can be implemented.
• It essentially means that the classic Weberian model should be in
place, which ensures an efficient and control-oriented system. These
external controls are the building blocks for a formal, rule-based and
honest public sector.
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14. NPM-Preconditions for Success
• The state capacity implies a condition where the state is able to take any reform
measure decisively.
• This state capacity is thus characterized by institutional, technical, administrative
and political factors
• Institutional capacity is marked by the ability of these countries to uphold the
authority of governments, to legislate and implement laws and to hold public
officials accountable in terms of these laws
• Technical capacity is evident when key decision-making bodies manned by
qualified people are insulated from the pressures of unproductive clientelist
groups
• Administrative capacity is characterised by the state’s ability to undertake basic
administrative functions and provide basic human services.
• in the absence of the state’s efficient role in discharging the minimal functions
such as provision of public goods and services, economic infrastructure, law and
order, and judiciary, the state is unable to implement the grand programs of
privatization, corporatisation and contracting out
• Political capacity refers to the ability of the state to mediate conflict, respond to
citizen demands, allow for representation of interests, and provide opportunities
for effective political participation at different levels.
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15. Strength and Weakness of NPM

16. Strength and Weakness of NPM

17. Failure in NPM experiments: Bangladesh
• NPM did not succeed in countries where the basic infrastructure of management
is not developed enough to undertake market-oriented reforms, though these
countries show a tremendous amount of zeal in embracing these reform efforts.
• The role of the international donor agencies is paramount in all these countries.
• They can hardly resist the policy prescriptions of the donor agencies.
• Bangladesh is an example of this category.
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18. Failure of NPM Experiments: Bangladesh
•despite its strong appeal, the Bangladeshi version of the
NPM package remains unimplemented because of
numerous factors.
•A few piecemeal efforts such as contracting out some public
services and privatization of public enterprises are under
way. Downsizing public bureaucracy did not produce
expected results
•Repeated attempts to corporatise a few state entities have
failed because of pressures of trade unions
•Privatization and financial sector reforms have been on the
agenda for quite a long time since the structural adjustment
programmes in the 1980s.
•The pace of the reform is slow and there remains
widespread allegation of corruption in selling public
enterprises
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19. Failure of NPM Experiments: Bangladesh
•The problems in the political economy of these countries
have largely been responsible for the non-implementation of
reform programs.
•The prescriptions of the donor agencies for administrative
reforms in Bangladesh have brought few results. The donor
agencies have failed to make the political leadership and the
public bureaucracy understand that their prescriptions will
bring positive results.
•There is also little appreciation of local conditions such as
the level of corruption, lack of fundamentals in public
management and severe crisis in governance.
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20. Failure in NPM Experiments: Bangladesh
• In the Bangladesh context political commitment is circumscribed by
clientelist politics, which is responsible for distracting the political
leadership from embarking on comprehensive reform programs
• Corruption has been rampant, reckless and institutionalized. It has
become a way of life in Bangladesh . Corruption has particular
implications for the NPM-style reforms. While NPM’s prescriptions of
contracting out and privatization sound well to curb corruption, it is
argued that a system already affected by over-politicisation and
corrupt practices will create increased opportunities for private
accumulation and patronage distribution. Signs are already evident in
the privatization of state enterprises and contracting out
• Symbiotic relations between the key players of government in the
country. All institutions have been politicized and destroyed.
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21. Failure of NPM Experiments: Bangladesh
• Institutional incapacity is marked by the inability of the Bangladeshi
government to uphold authority in different spheres of society.
• Indiscipline is visible in all sectors. The government’s inability is also found in
legislating and implementing laws and in holding public officials accountable
in terms of these laws.
• Technical failure is also an incessant phenomenon in state administration.
The Bangladesh administration has failed to attract qualified people.
Promotions are based on a clientelist nexus, not on merit.
• This clientelist nexus is based on the political party affiliations of bureaucrats.
• In doing so, they have inducted people under the spoil system, promoted
people on party or other petty considerations, politicized the Public Service
Commission by appointing people to this constitutional body on party
affiliations, and tampered with the selection process to choose party
loyalists.
• It is essentially politicization of bureaucracy. It means the use of bureaucrats
to promote private agendas of politicians
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22. Failure of NPM Experiments: Bangladesh
•There are examples that the state in Bangladesh, over the
years, has been struggling to perform basic administrative
functions.
•It is worth mentioning here that without this administrative
efficiency the grand programs of privatization,
corporatisation and contracting out cannot be implemented
effectively
•Political capacity in Bangladesh is seriously constrained by a
lack of effective political institutions, political confrontation,
criminalization of politics and instability.
•This in turn undermines the legitimacy of the state, resulting
in the state’s inability to undertake successful reform
programs
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23. The problem of horizontal
coordination
Problem of inter-sector and inter-ministerial coordination
Strongly specialized ministries
NPM has not addressed the problem of horizontal coordination
Many policy problems traverse ministerial boarders and trigger the need for WOG reforms

24. The autonomy-control dilemma
How to balance political control and agency autonomy?
Easier to change the power relations than the responsibility, produces legitimacy problems
The slogan ”more steering in big issues and less steering in small issues” was difficult to fulfill
The problem of moving from instructions to frame steering

25. Possible future developments
Will the post-NPM reforms last for long?
Probably not – new demands for more devolution
and horizontal specialization
New reform concepts are coming up: quality
services and multi-level governance, good
governance
Governments are a complex combination of:
Old Public Administration
New Public Management
Post-NPM features

26. Neo-Weberian Reforms
Bringing the bureaucracy back in
A strong and modernized state
Classical Weberian principles (Rechtstaat) combined with
Result orientation
Citizen orientations, participation
Professionalization of public service

27. The revival of Weberianism
Precise and unambiguous rules, legality
Impartiality, due processes, ethical capital, public ethos
Personnel that distinguish between their interests as private citizens and their duties as civil
servants
Institutional capacity
Merit based recruitment
A salary system which is sufficiently generous to make public officials less susceptible to
bribery
A transparent system of responsibility

28. NPM and Neo-Weberianism
NPM can only work when there is a strong Weberian ethos and trust relations
Introducing NPM reforms in low trust countries is to ask for problems
Weberianism is a good model when trust in public institutions and officials are low
An alternative modernization strategy to market based reform in a low trust situation is to
adopt a neo-Weberian model