Introduction
The desire to continuously improve service delivery to citizens is a challenge faced by most governments across the globe. Governments are put to power by citizens through a democratic process with the hope that it will implement better governing policies that will benefit all and sundry.
Effective and efficient modes of implementing such policies in spite of myriad challenges have to be sought. These changes have inspired new ways of thinking in service delivery. Gow (2005) clearly observes that since the early 1990s, the idea of result-based accountability facilitated the search for alternative forms of service delivery within our parliamentary system.
The world has always been evolving as mankind seeks better ways of accomplishing tasks. Quality improvement is highly desired when delivering services be it in manufacturing, management or administration. On the same note, the concept of total quality management became widespread as focus shifted to satisfying customers.
The approach was successful in Japan where high quality products were being manufactured. This type of management approach has also found its way in public service. Most governments are at crossroads due to insufficient resources. Hence, efficiency is apparently a mandatory requirement for effective public administration.
The objective of introducing such management practices is to improve service delivery. Gow (2007) clearly notes that after five decades of predominant attention to processes, the emergence of management thinking and program budgeting in the late 1960s led to the concern for better results in public management.
Since the early 1990s, the idea of result-based accountability facilitated the search for alternative forms of service delivery within our parliamentary system.
Governments have had to resort to such measures for varied reasons bearing in mind that the New Public Management (NPM) concept was complex in itself from the very beginning making it quite cumbersome to understand and implement all the principles of NPM.
Public management
Schacter (2008) defines public management as activities, structures, processes, procedures, rules, norms and incentives established within the public service that facilitate, monitor and control direct or indirect production by the public sector.
Public outputs may take the form of, among other things, financial support, advice, services, research, information, and training provided to individuals or organizations. Outputs are delivered with a view to realizing the outcomes established by the elected government.
The subject of public management is not new as governments have always sought better ways of service delivery. It concerns itself with efficient utilization of public resources. Most practices are borrowed from the private sector.
It is the belief that private sector practices can be effectively used in public sector that has prompted its widespread application. There are more or less similar temperaments involved in both the private and public sector.
In addition, techniques and skills being used to managed these institutions do not vary significantly except that in the private sector, most problems experienced in the public sector are not common in the private wing (Lynn, 2001).
However, Rainey (1997) notes that some differences exist in the sense that public interest differ from private ones. public officials, because they exercise the sovereign power of the state, are necessarily accountable to democratic values rather than to any particular group or material interest, and the constitution requires equal treatment of persons and rules out the kind of selectivity that is essential to sustaining profitability.
Despite such concerns there are valuable practices in the private sector that can be successfully used in public management. Moreover Mingus (2007) observes that at the end of the day any system of government will eventually witness acts of corruption and abuses of power on the part of individuals, organizations, and political parties.
The entire public sector and the modalities of controlling it through effective management is all enshrined in public management policy. Motivation and guidance are key elements in this respect.
Therefore, institutional guidelines and rules are pertinent in any public sector largely due to the large number of people being served at any given time (Barzely, 2007). With such tools available at its disposal the government is able to influence lives of its citizens in a big way.
New public management
In recent years, government organizations have shifted their operations to become results oriented. This approach places more emphasis on measurable outcomes other than traditional lethargic ways of operation.
These ideas are deeply rooted in the private sector where efficiency and effectiveness are the guiding philosophies.
Free and Radiffe (2005) call for a shift in the traditional interests of governments and bureaucrats on inputs and process toward results and performance. Such paradigm shifts have found application in many parts of the world. For example in the mid-1980s and 1990s, New Zealand radically reformed its public sector.
Changes included corporatizing and privatizing state owned enterprises; introducing performance related individual contracts for senior staff; increasing departmental management autonomy; changing financial management and reporting requirements, including moving from input-based to output based reporting; a move to strategic planning for the government; and departmental decoupling, including promoting policy-operations and funder-provider splits (Goldfinch, 1998).
This movement has received much attention by public administrators and scholars. Although administrative theory is apparently the key ideal of NPM, it may also be perceived as a reform movement since it entails restructuring of old systems and structures for the sake of improving productivity (Roland, 2001).
However, there are those who argue that NPM has been largely consumed by the urge to control and self interest.
Mingus (2007) defines new public management as shorthand for applying the private sector or market-based techniques to public services.
This managerial approach to governing incorporates ideas ranging from establishing internal competition to increase bureaucratic efficiency and focusing on outcomes measures, to contracting out traditional public services or outright privatizing traditionally public functions.
NPM can be traced from the 1980’s when governments realized that bureaucracy was slowing down their efficiency. Moreover, it is also plausible to note that business restructuring was already a reality way back in 1980s when most governments realized the need of revamping the business by adopting the most recent and up to date models.
Nonetheless, this early realization may not have been fully beneficial in some countries where implementation phase was poorly executed (Hess & Adams, 2007).
This approach to public management borrowed most ideas which were initially being used in private sector. Strategic asset management, accrual accounting, output-based budgeting, benchmarking and competitive tendering have been adopted in NPM as the right ideals when managing public institutions.
Although these practices have been found successful there is considerable debate on whether they can cater for public interests. Additionally, a non-partisan interest which has been lost or is evidently absent has led to difficulty in solving modern day management problems in public institutions (Hess & Adams, 2007).
Worse still, the problem or weakness is not merely confined within smaller regions; it is a global phenomenon. Thus, developing, adopting and implementing broad policy implications is of great importance if NPM is to positively impact management in the public domain.
Mingus (2007) poses whether or not NPM brings a package of values into public-sector organizations that ultimately allows private interests and greed to supersede the public interest, broadly conceived.
Elements of new public management
New public management was implemented in various forms. The most visible changes introduced included public private partnerships, privatization of public enterprises and downsizing of government workforce size. These changes were aimed at introducing efficiency in public sector service delivery.
Although public management is practiced with public interest at heart it is not uncommon for it to fall prey to vested interests. Such interests like politicians self interests, pressure groups and private interests at times derail implementation of effective public management.
Introduction of new ideas will always face resistance and introduction of new public management was no exception (O’Flynn, 2007).
For example one scholar has argued that NPM has been subject to ongoing and fierce debate in the academic literature because it challenged conventional thinking and brought together a range of practices, policies and theories rather than proposing some coherent theory (O’Flynn, 2007). Despite such challenges there have been successes of NPM.
At the end of the 20th century, a post bureaucratic paradigm of public management was firmly embedded in many countries reflecting the outcome of the suite of reforms intended to enact a break from the traditional model of public administration (O’Flynn, 2007).
These reforms have been happening in many areas of public sector management with different approaches being chosen. Management of public enterprises like private sector companies has been implemented and resulted in many failures and successes. Some public enterprises that were making losses have been transformed into cash cows for the state.
O’Flynn (2007) describes some of the measures introduced which included corporate planning based on central goals, comprehensive program budgeting, management improvement programs, contract employment for managers; central auditing and performance monitoring of individuals. The key aims were to empower public servants and increase managerial quality.
NPM received much enthusiasm in New Zealand where measures introduced included corporatizing and privatizing of state owned enterprises; the introduction of performance related individual contracts for senior staff; increasing departmental management autonomy; changing financial management and reporting requirements, including moving from input-based to output based reporting; moving to strategic planning for the government; and departmental decoupling, including promoting policy-operations and funder-provider splits (Goldfinch, 1998).
With NPM concepts such as monitoring, evaluation have evolved to become a standard practice. In every government department people are given specific targets which they have to achieve which is commonly referred to as performance contracting.
In order to measure achievement, performance indicators have been devised to benchmark performance. Reward within public sector is now pegged on these indicators.
Another element of NPM has been private public sector partnerships. This is an arrangement where private and public sectors bring together resources and expertise to improve service delivery.
This is a symbiotic relationship where public sector benefits from expertise in private sector and ensures resources are optimally used for benefit of all. Besides this the recruitment of public sector managers is more rigorous and based on merit. This is done to attract the best people for the job and ensure the person hired has the ability to do the work.
Competition is another pillar of NPM. The introduction of competitive tendering led to the perception that public managers would be able to deliver value for taxpayers’ money.
Political patronage in awarding of government contracts would be eliminated. All these measures were aimed at improving quality delivery to citizens who are now regarded as clients.
Benefits of new public management
NPM has had its proponents and critics. On one side of the debate are its staunch supporters who believe market based techniques would bring efficiency and effectiveness.
On the other hand are skeptics who feel NPM was introduced without any consideration of the way public sector is organized. In this group, there are those who feel that market based approach is too narrow to achieve public interests. Despite these debates, NPM has some associated benefits.
To begin with, it is important to realize that private sector is profit driven and while some practices may fit in public sector, others may be unacceptable altogether. An overriding concern in private sector is efficiency, where focus is on results.
If such a measure is introduced in public sector its benefits are immense. However efficiency has many dimensions and some like downsizing of staff may not be acceptable to politicians. Perhaps an area where efficiency has worked well is in hiring of public managers. Competitive sourcing as opposed to political patronage has arrived in public management.
An important benefit that NPM brought to public management is accountability. Public servants are expected to uphold to higher level of ethics and values that serve public interests. Such servants are expected to deliver value for taxpayers’ money.
Such performance has to be measured continuously to ensure specific objectives are achieved. These objectives are defined in terms of specific indicator outcomes.
Another benefit brought by NPM is performance contracting. This ensures that whatever people are hired to do is measured to ensure effectiveness of government policy. Monitoring and evaluation has evolved almost into an industry on its own.
Most government departments have setup evaluation teams whose mandate is to measure progress and achievement of government objectives.
Security of tenure and performance rewards provided to public service employees increases motivation and productivity. Employment and salaries were done in a more open and fair way. With such incentives overall effectiveness of public service improves as employees are more confident in the way they interact and carry out their duties.
An important element of NPM has been market liberalization where there is no monopoly in provision of services by state corporations. This has had mixed results, some positive and others negative. On a positive note service delivery to customers has improved.
This has been brought about by competition for customers so state corporations have to measure up to the competition. Another positive outcome has been increased profitability of state firms. With sound management practices these firms are profitable ventures and present a revenue stream for governments.
Risks of new public management
The introduction of new management practices will apparently lead to failure. Perhaps, an area where skeptics of NPM have found its shortcomings is the manner in which it was introduced without any risk management strategies (Schacter, 2008).
The old bureaucratic management was found not optimal and a new approach in the name of NPM was introduced. There was no forward thinking on problems that may arise in implementation of NPM.
Notably erosion of public interest has been a major concern. Such a risk management framework would have anticipated and mitigated some of the problems associated with NPM.
With new changes to be introduced a considerable investment was required. Since such changes would not result in instantaneous improvements patience was necessary if output was to be felt. With huge investments many expected short term gains.
However such short term gains could not be realized. It would have been better if NPM was introduced as a long term project.
The need to change conventional bureaucracies was also an important step in the entire New Public Management initiative. As such, transparency in governance ass well as result-oriented focus was perceived to be an integral constituent of NPM.
However, this may not be a reality if public managers fail to be effective enough when discharging their duties. On the other hand, perceiving NPM as a way of governance has greatly eroded its practical meaning.
It is imperative to note that most governments across the world have implemented the principles of NPM in a bid to restructure and streamline services being offered (Noordhoek & Saner, 2004).
However, orders of necessity has not been adequately addressed by the principles of NPM thereby discrediting the entire concept as being fruitless as far as public administration is concerned (Hess & Adams, 2007).
Market based principles may not at best serve public interests and there is need for government intervention to restore discipline.
Minogue (2000) claims that fundamental values of public service organizations have been undermined by competition and the NPM, by limited resources, conflicts between individual demands and public interest, the erosion of accountability and responsibility due to fragmentation, and increased risk-taking (Christensen & Per, 2001).
In an effort to introduce efficiency downsizing of public sector workforce has been a key element. This has been coupled with restructuring of government departments with some being abolished and others set up.
With shift to being results oriented monitoring and evaluation departments have to been setup and tasked to continuously measure results. For abolished departments staff has to be redeployed or sent home. For such citizens NPM is a bitter pill to swallow.
Achieving results was a major pillar of NPM. To measure delivery of results indicators had to be constructed. In an attempt to measure achievement each objective needed an associated indicator. This brought about multiplicity of indicators some of which are hard to interpret.
This confusion causes skepticism on whether real results are being achieved or people just focus on numbers. The overly obsession with numbers can miss out an important like public benefit.
Government has a large and complex interconnected structure and measuring its effectiveness is difficult. This is in contrast with private companies which have fewer and are better structured. This is an important difference architects of NPM missed out on.
Moreover, small governments have also been part and parcel of NPM since they are extremely interested in devising ways and means of improving the growing government in order to catch up with big players in the global arena (Hess & Adams, 2007).
The enthusiasm with which NPM was received in the 1980’s has slowed down with identification of some of its shortcomings. Honestly government needs to be efficient in its service delivery but some aspects of NPM have failed. To move forward a new way of thinking that incorporates NPM is needed.
Although it is not clear if NPM is coming to an end visible signs of its decline have started surfacing. Some countries have rejected NPM and are seeking alternative ways of improving service delivery. A case study of Switzerland gives a clear example of how NPM has been managed so far.
The administrative reforms that have been initiated by NPM in this country have been stopped by parliament. This has occurred even though such restructuring programs have been in implemented for some time now (Noordhoek and Saner, 2004).
A major reason for the decline of NPM is that these practices were entirely brought to public sector without a clear understanding of differences that exist in public and private sectors.
O’Flynn (2007) clearly points out the wholesale application of private sector models and the failure to pay heed to the interconnected and interdependent nature of the public sector.
Objectives and the need to exist of the two sectors are different. Whereas the private sector is an exclusive club of profit minded individuals the public sector exists for representation of all and to ensure equitable distribution of resources.
Improving public organizations does not stop with the end of NPM. On the same note, an alternative such as ignorance of the conventional way of managing pulic institutions may not work at all. Old mechanisms of managing public institutions may have lacked some authenticity.
However, conceptual restart is indeed necessary if the modern institutions will be productive. Attaining this requirement in management of public institutions may be aggravated by distrust. Hence, the ability to build rational concepts as well as good relationship among all stakeholders in public institutions is important (Noordhoek & Saner, 2004).
Conclusions
There is no reason why the government can be excused for inefficient service delivery. Even skeptics of public management will agree that there is need to search for a system of government that can efficiently deliver services to the citizenry.
The bureaucratic government was found ineffective and NPM was proposed as a panacea. NPM involved application of market based techniques in public sector. The idea was to bring private sector effectiveness and efficiency to public sector.
The idea found widespread following in the 1980’s when governments were experiencing dwindling revenues to support public programs.
In recent years realization has emerged that wholesale application of market based techniques is not a panacea to public administration. To begin with there are fundamental differences in the organization and objectives of public and private sectors.
Private sector is profit driven often involving a small group of people with vested interests. In the private sector the end justifies the means and that is why they are results oriented organizations. On the other hand public sector is driven by public interest and incorporates values like democracy, equity and representativeness.
In NPM, an expert group of people is given the responsibility of making decisions. In such a setting it is not possible to identify whether they represent public interest or their personal interest. This goes against values of democracy, equity and representativeness.
This approach to decision making is oblivious of the fact that there are many stakeholders who need to be incorporated. In such a decision making strategy there is no consultation of potential beneficiaries which is unlike in private sector where interested parties are consulted before a decision is arrived at.
A key point that was missed in the implementation of NPM is that public sector involves a larger number of stakeholders. A key point that arises from this discussion is that the process of decision making in public sector will be slower than in the private sector.
Privatization of state firms was a key element of NPM. Perhaps this is an area where the greatest success of NPM has been felt. Under bureaucratic management there was no regard to results and merit. Public corporations had no regard to quality of service delivered and often most were unprofitable ventures.
Besides this most held monopolies in economic sectors. NPM introduced liberalization and the state had to opt out of business. Most of the state owned firms lost monopoly and they had to compete with private sector companies for clients and business.
The newly privatized firms had to change their methods of hiring and service delivery. Associated with such changes was perky remuneration of chief executives and introduction of sound management practices. These firms were able to improve service delivery and profitability.
Measurement, if it is to be feasible and useful, requires simplification, particularly when one is dealing with a subject as large and complex as the quality of public management at the level of a national government (Schacter, 2008).
A key objective of introducing NPM was to set objectives and ensure these objectives are achieved to produce results. For such a process to be effective constant monitoring and evaluation was required. Clear definition of what is to be measured and how it is to be measured is difficult and expensive. Indicators have to be constructed and at times interpretation to conclude whether results are being achieved is difficult.
Furthermore the costs of setting up monitoring and evaluation teams are high which goes against the concept of NPM of efficient governments. Such a development is counterproductive as it increases the costs of operation in private sector.
A common philosophy of NPM was that a citizen is a client. This is the focus in private sector where companies strive to continuously satisfy their clients which it was hoped would also be achieved in public sector. However there are differences between a citizen and a client. These differences are pronounced in the duties and responsibilities of a citizen.
NPM in its wholesale application was felt it would eliminate inefficient governments. Scholars and practitioners’ of public administration did not realize incompatible differences exist in public and private sector.
Some elements of NPM have been undoubtedly successful while others have totally failed. A new system of government administration needs to be sought.
However it will not be reinvention of the wheel as NPM provides some basis. Key features of NPM that have been successful include privatization of state firms, public private partnerships and competitive hiring and tendering.
With identification of shortcomings of NPM there is another movement that advocates for public value. Hess and Adams (2007) argue that a new paradigm for thinking about government activity, policy-making and service delivery may emerge bringing with it important implications for public managers.
For citizens these developments may not be very encouraging. Scholars and practitioners of public administration will be hard pressed to justify continued investment in initiatives that do not seem to work.
Perceived or real inefficiencies in the public opinion will continue to haunt scholars and practitioners as they strategies on the best way to improve public administration efficiency. Moreover governments will be under more pressure to justify increased public expenditure on improving efficiency.
In the public value paradigm, public managers have multiple goals which, in addition to the achievement of performance targets, are more broadly concerned with aspects such as steering networks of providers in the quest for public value creation, creating and maintaining trust, and responding to the collective preferences of the citizenry in addition to those of clients.
Such goals dovetail well into the idea that the dominant focus for managers shifts from results to relationships in the public value paradigm (Hess &Adams 2007).
For scholars and practitioners of public administration, governments and citizens these are challenging times. NPM brought some efficiency gains but some elements failed. Implementation of NPM had substantial public investments and its initial dismal performance may not inspire much public confidence in future public administration improvement initiatives.
The need for efficient government will not end with lack of confidence in NPM. Scholars will continue to seek for ways of improving efficiency. Administrators will have to weigh costs and benefits of efficiency improvement programs before they commit public resources.
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