The new public management theory

The New Public Management (NPM) theory is a set of ideas and practices that emerged in the 1980s and 1990s, aimed at reforming the public sector and improving its efficiency, effectiveness, and accountability. The core principles of NPM are:

  1. Managerialism: The public sector should adopt private sector management practices, such as strategic planning, performance measurement, and accountability.
  2. Decentralization: Decision-making authority should be devolved to lower levels of government or to semi-autonomous agencies.
  3. Market-oriented approaches: Public services should be delivered through market-like mechanisms, such as contracting out, privatization, and user fees.
  4. Performance measurement and accountability: Public organizations should be held accountable for their performance through the use of performance indicators and benchmarks.
  5. Human resource management: Public organizations should adopt private sector-style human resource management practices, such as merit-based hiring and performance-based pay.
  6. Citizen-centered governance: Public services should be designed to meet the needs and preferences of citizens, with a focus on customer satisfaction and quality of service.

The key features of NPM include:

  1. Agencification: The creation of semi-autonomous agencies or quangos to deliver public services.
  2. Contracting out: The outsourcing of public services to private providers.
  3. Privatization: The transfer of public assets or services to private ownership.
  4. User fees: The charging of fees for public services to increase efficiency and reduce demand.
  5. Performance-based budgeting: The allocation of funds based on performance targets and indicators.

The benefits of NPM, as argued by its proponents, include:

  1. Improved efficiency: NPM is expected to reduce costs and increase productivity in the public sector.
  2. Increased accountability: NPM is designed to hold public officials accountable for their performance and to increase transparency.
  3. Better service delivery: NPM is expected to improve the quality and responsiveness of public services to citizen needs.

However, critics of NPM argue that it has several drawbacks, including:

  1. Inequity: NPM can exacerbate existing social and economic inequalities by reducing access to public services for marginalized groups.
  2. Privatization of public goods: NPM can lead to the privatization of essential public goods and services, such as healthcare and education.
  3. Loss of public trust: NPM can erode public trust in government and public institutions by introducing private sector values and practices.
  4. Inadequate regulation: NPM can lead to inadequate regulation of private providers, resulting in poor service quality and exploitation of citizens.

Overall, the New Public Management theory has had a significant impact on the public sector, shaping the way governments deliver services and interact with citizens. While it has brought some benefits, its limitations and drawbacks have also been widely recognized.