New Public Management - Essay Example

?Full and section number of New public management (NPM), has its processes and management techniques taken from private sector and is found to be a global phenomenon to which many nations are converging. New public management activities focus on public management and ignore the traditional public administrations system. Crucial factors of new public management include different types of decentralizing management in public services. For example, financial control, delegation of budgets and formation of autonomous agencies. Other factor includes extensive use of markets and competition in providing public services. For example market-type mechanisms like contract giving. New public management also includes high emphasis on performance, maximization of outputs and great level of customer orientation. New public management developments include several economic, political, social and technological factors. Countries that adopt new public management are found to be witnessing fiscal and economic crises. This has resulted in the attempts to increase efficiency and reduce the cost of providing public services. The crisis encountered by the welfare state created several doubts about the role and institutional nature of the state. In many developing countries, developments in public administration and management have been accelerated by external pressures. Moreover, these reforms have happened in the background of structural adjustment programs. Other factors of new public management developments include pre-eminence of neoliberal ideas that existed in the late 1970s and the deployment of efficient international management advisors and consultants on various reforms. Other factors in new public management include the development of information technology. For developing countries, new public management developments include great emphasis on proper governance and lending conditions. Earlier, new public management was considered as a phenomenon of developed countries, typically Anglo-Saxon, phenomenon. In the 1990s we have seen applications of different alternative of new public management practices in few developing economies and transitional economies. Downsizing and user fees are introduced in several countries, for example African countries. These activities are related to different structural adjustment works. Autonomous agencies included in the public sector are formed in certain countries. For example, the autonomous hospitals in Sri Lanka, Ghana and Zimbabwe. In Uganda and Ghana we found the hiving-off of excise and customs and revenue divisions to create executive agencies. Performance contracting as well as contracting out have been the major policy options in different crisis states. Contracting out has been considered as a tool to develop SOEs, state-owned enterprises. This provided more operational freedom to SOE managers while making them responsible for the performance of the enterprises. Grants, sanctions and rewards are implemented for the performance enhancement of enterprises. Performance contracts are introduced in different sectors like agriculture, transport and telecommunication. Countries like India, Bolivia and Ghana have implemented this. Contracting out is put into practice in the various sectors. Delivery of public services including road maintenance, waste management, laundry services, catering services, health services and other urban services are contracted out. In Zimbabwe we find the contracting out of different public services. Even though the adoption of new public management practices appear to be beneficial in certain cases, they have certain limitations to be applied in come crisis states. In Brazil and few other African countries new public management have brought cost savings while contracting out public works like road maintenance. However these techniques bring certain limitations in few states. The inefficiency of new public management in such countries reveals that there are institutional problems and other issues that bind the restrictions on implementation. The capacity concerns involve the application of monitoring and reporting systems and the ability to coordinate a network of contracts. The concerns also include the tough governance and institutional environment that would restrict implementation capacity. Even though the new public management cannot solve all the problems of the public sector in crisis states, it can eliminate several crucial issues. Selective and careful adaptation of certain elements to few chosen spheres will help. New public management is considered as one of the most prominent international trends in public management. It is considered as a good managerial approach that is completely result-oriented. New public management is expected to improve the quality of public services. It is also intended to increase the efficiency of governmental operations. New public management further makes policy implementation very effective. New public management implemented the benefits of service effectiveness and cost efficiency to different sectors of public management. New public management made governments focus on the efficient production of different services. New public management removed the centralized hierarchical organization structures and introduced the decentralized management. New public management restructured the public sector. It further reduced the size of the public sector, for example, new public management fully reorganized the central civil services. Towards the middle of 1980s, majority of the western countries understood the importance of new public management. Administrative structures of these countries realized the influence of reform program of new public management. The circumstances were such that they needed public sector reforms. Improved productivity, public expenditure reduction and public sector cut-backs were the requirements of the public sector. These reforms were introduced in several western countries. Australia, United Kingdom, Australia and the United States were the main countries who implemented these reforms. In the United Kingdom a fundamental change of administrative set up started as early as 1979, in the period of the Thatcher government. Using a mechanism known as 'Prior option Review' the processes in different departments were analyzed to understand their utility and efficiency. Several notable administrative reforms were performed in the United Kingdom. Using the financial management initiative, steps were undertaken for financial delegation. This is done through a cost analysis. Understanding the needs of multiple service agencies, several new executive agencies were set up. These agencies were called New Step Agencies. These were meant for discharging a special sequence of activities, as in a business process. A system of 'Citizens' Charter' was set up in 1991. This scheme encouraged public agencies to formulate, publish and implement well defined service standards. Public services like garbage collection and street sweeping were contracted out. These set up was initiated in UK as early as 1992. In the United States new public management reform agenda was brought under AI-Gore Report 1993 in NPM (National Performance Review). This report contained the fundamental ideas of entrepreneurial government. These reforms were introduced to create a performance based administration culture and practice. This typical administration culture was customer-oriented and focused on cost-effectiveness. There happened several notable reforms in the United States. Cutting Red Tape by decentralization; eliminating all unnecessary rules and reforming budgetary process. Customer-orientation was done by destroying all government monopolies. New market mechanisms were introduced and customers were empowered to raise their opinion. Employees were also empowered do that they give better results. Employees were given training and entrusted with greater responsibilities. They were also provided with excellent working environments. The core activities of the government were revisited; activities were restructured for making it run in a cost-effective manner. All unnecessary activities and tasks were avoided by the government. Coming to the case of Australia we see that new public management reforms brought significant changes. The activities of State were decreased and new market mechanisms were introduced. These new market mechanisms interfered in the public services. New Public Management brought new reforms in the New Zealand also. Customer service-orientation and performance-orientation were achieved through different measures. Government commercial enterprises underwent significant changes. The relationship between public servants and government was improved. This resulted in the overall improvement of public services. Coming to India we find that the nation could not escape from the effects of liberalization, privatization and globalization. The social and economic conditions of India are completely different from that of the Western countries. The reform activities of New Public Management were introduced in India by the year 1992. Reforms were intended to bring responsiveness and efficiency in governmental affairs. The economy was liberalized and deregulated in several ways. Private agencies were supported through several activities. Several steps have been taken to reduce unnecessary government activities. Public administration activities were improved with the help of information and technology. Right to Information Act brought transparency and responsiveness and encouraged the participation of general public in administrative system. Non-governmental organizations and other citizens groups were allowed to participate in the administrative process. State governments also took various measures to make citizens involve in the administrative practices. Japan is an example of the typical implementation of new public management. The Administrative Reform Council of Japan proposed several new measures while implementing new public management. Reorganization of agencies and central ministries, formation of cabinet office, decentralization, change of national agencies to independent administrative units, civil service reform and appointment of officers like deputy ministers are some of the measures proposed by the Council in Japan. Many developing countries have implemented new public management reforms. Some of the popular examples include the total quality management experience of Malaysia, the comprehensive streamlining of Chilean education in the internal market structures, and the results-oriented management proposals in Uganda. Public sector reforms in Sri Lanka are a typical example of new public management system. The term new public management appeared in the 1990s. The term explained the public sector reforms conducted in countries like New Zealand and UK. It was explained as a conceptual instrument meant for structuring the changes associated with the management and organization of government. The major principles of new public management include customer-oriented services, decentralization of management powers, emphasis on output control and set up of market mechanism. In the United Kingdom increased pressures made the government to address economic problems, high prevalence of unemployment, and the inefficiency of public services. The government boldly introduced comprehensive changes. New public management thus became popular in UK. In the United States, the Clinton administration adopted the same principles as they also experienced problems in the civil service, similar to what UK experienced. The government under the slogan ‘reinventing government’ adopted new public management strategies. ‘National Performance Review’ of Al Gore (1993) is a proof for America’s acceptance of new public management reforms. Problems like sudden external environmental changes and accumulated debt demanded a management change in the public sector. The World Bank, the OECD, and the IMF have been proposing new public management reforms around the world. New public management soon started spreading to different countries. New public management has brought revolutionary changes in the countries where it was employed. New public management has been successfully implemented in Australian public sector. The system has become dominant both state and federal levels in Australia. The new public management approach give importance to the application of private sector management practices in the public spheres. Upgrading competitive pressures, monitoring performance, cost-cutting, and strengthening the powers of managers are some of the practices that have been implemented in the public sector. In the matter of labor management, Australian public sector has witnessed several new initiatives. Individual employment contracts, performance-based salary, decentralized wage bargaining and total quality management are some of the steps taken by Australian public sector. They have also taken much effort to bring workplace improvements to public sector also. These workplace reforms have given new life to the previously routine public sector jobs. These jobs have become rewarding because of new training facilities and application of new technology. Application of new public management reforms has improved the performance of labor sector in Australia. Australian public service employees have also been highly benefited by the application of new public management in their sectors. Decentralization of managerial assignments has been done for proper workforce management. Individual departments and agencies have witnessed better human resource management through excellent workplace policies. Ethical issues and conflicts have been better managed under the new system. Work sector have also seen probity in labor practices and managerial dealings. A responsible spending of public money is yet another result of implementation of new public management services in Australian public sector. Australian community also witnessed a just and fair delivery of services. Developing countries have experienced different types of public sector reforms. Governments of these countries have experimented several reform methods. In the 1980s, nations experienced multilateral pressures, budget deficits and various other issues that made them address cost and size of government with respect to private sector growth. All these led to the formation of new market-driven mode of government in developing countries. This encouraged reforms in public sector also. In the 1990s developing countries attempted hard to bring up the public sector. Governments started targeting the efficiency and effectiveness of public sector. They began strategies to check corruption, which was a major problem in developing countries. Measures like new public management have been undertaken to improve the public sector. Several government entities have been privatized, commercialized and given for contracts. Government organizations and government services have been restructured for better outcomes. New public management with its concepts like entrepreneurial government and market-based public administration has been adopted by nations across the world. New public management ensures better government with less expenditure. New public management brings fundamental changes in the administrative system. It has influences the power relationships between the major players in the government body. New public management therefore demands great attitudinal changes from the part of the bureaucrats. New public management reforms greatly depend on the good will of the politicians. Ministers decide the reforms that need to be implemented. More and more governments are choosing new public management systems to revive their public sector. New public management has become a global phenomenon to which several nations are converging. References Pollitt, C 1993. Managerialism and the Public Services: Cut or Cultural Change in the 1990s? 2nd ed, Oxford: Blackwell Publishers. Quah, J S T 1999. 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A., (1999)The New Public Management Approach and Crisis States,UNRISD Discussion Paper No. 112. September 1999. Nolan, B. C. (2001)Public Sector Reform: An International Perspective, New York, USA, Palgrave. Read More