New public management theory

New Public Management (NPM) is a theory that emerged in the 1980s and 1990s, which aimed to reform the traditional public sector by introducing private sector management practices and principles. The core idea of NPM is to make the public sector more efficient, effective, and responsive to citizens by adopting a more business-like approach.

Key features of NPM:

1. Managerialism: NPM emphasizes the importance of professional management and the role of managers in achieving organizational goals.
2. Decentralization: Decision-making is decentralized to lower levels of government or to autonomous agencies, allowing for more flexibility and responsiveness.
3. Market-oriented: Public services are designed to be more market-like, with a focus on competition, choice, and customer satisfaction.
4. Performance measurement: NPM emphasizes the importance of measuring performance and setting targets to improve efficiency and effectiveness.
5. Privatization: NPM encourages the privatization of public services, either through outsourcing or contracting with private providers.
6. Downsizing: NPM often involves reducing the size of the public sector workforce to increase efficiency and reduce costs.
7. New public service values: NPM emphasizes the importance of values such as customer focus, efficiency, and effectiveness, rather than traditional public service values such as equity and social justice.

Theoretical underpinnings of NPM:

1. Public choice theory: NPM draws on public choice theory, which assumes that public officials act in their own self-interest and that government is prone to inefficiencies and corruption.
2. New institutional economics: NPM is also influenced by new institutional economics, which emphasizes the importance of institutions and incentives in shaping economic behavior.
3. Managerialism: NPM is rooted in managerialist thinking, which emphasizes the importance of professional management and the role of managers in achieving organizational goals.

Criticisms of NPM:

1. Neoliberalism: NPM has been criticized for promoting neoliberal ideology, which prioritizes market principles over social welfare and public goods.
2. Privatization: NPM's emphasis on privatization has been criticized for undermining public services and increasing inequality.
3. Managerialism: NPM's focus on managerialism has been criticized for neglecting the importance of democratic accountability and public participation.
4. Inequity: NPM's emphasis on efficiency and effectiveness has been criticized for neglecting the needs of marginalized groups and exacerbating social inequities.

Examples of NPM in practice:

1. Privatization of public services: Many governments have privatized public services such as water, energy, and transportation.
2. Contracting out: Governments have contracted out public services to private providers, such as cleaning, maintenance, and security services.
3. Performance-based budgeting: Many governments have adopted performance-based budgeting systems, which allocate funds based on performance targets.
4. Agencification: Governments have created autonomous agencies to manage public services, such as independent regulatory agencies.

Overall, NPM has had a significant impact on the public sector, but its effectiveness and equity have been debated.