RETHINKING PUBLIC SECTOR DEVELOPMENT: IS NEW PUBLIC MGT (NPM) A PANACEA OR DILEMMA?  INTRODUCTION  Definition  Core Drivers  Features  Theoretical roots  Selected application: New Zealand, African countries Nigeria and Zambia  Strengths/Achievements of NPM  Weaknesses of NPM  Panacea of dilemma? Conclusion & Recommendation 17/06/20161

NPM MODEL Is NPM the answer to sustainable development? What is NPM?  Re-organizing the public sector from a traditional Weberian bureaucratic model to a market –oriented public sector.  Application of:  institutional economics such as the public choice theory, Principal/Agent theory and Transactioncoststheory  managerialism or private sector styles of management to the public sector such as focusing results and flexibility  When? In the 1980’s, among OECD Countries 6/11/

CORE DRIVERS OF NPM:WHY NPM?  Economic and fiscal stress  Inefficiency of the Weberian model of bureaucracy/traditional public  Self-serving bureaucrats  Political and ideological factors  Enhanced civic awareness of citizens  Change agents/think tanks  Information technology  Lending policies of the Breton Wood institutions - SAPs in developing countries 17/06/2016 3

COMMON FEATURES  Customer focus, value for money, accountability  Contracting-out/outsourcing, user fees, PPPs, privatization  Downsizing, lean government, mean government  Explicit targets, measurement of results/ performance mgt  Results, output-outcome based budgets, accrual accounting  Strategic approach  Decentralization, disaggregation of units, Separation of purchaser (financial) from provider (organizational)  Discipline in resource utilization (human resources/financial) 17/06/2016 4

THEORETICAL ROOTS OF NPM  Institutional Economic theory  Public choice theory – promote bureaucratic pluralism/curtail direct provision  Principal/Agent theory –separate provider & purchaser, create contractual relationships  Transaction cost theory - introduce market testing/competition to lower transaction costs  Private sector principles  Managerialism: results, flexibiity, trategic approach 17/06/2016 5

NPM IN NEW ZEALAND  RADICAL REFORMS & BENEFITS:  Creation of agencies – disaggregation of units  Clarity of objectives  Freedom to manage – managers responsible for results  Accountability  Effective assessment of performance  Adequate information flows  More efficiency, and fiscal control  MAJOR CHALLENGE:  lack of co-ordination. Fragmentation has occurred because of the creation of many different agencies  INTERVENTION:  Rebuild or reassert the centre - Whole-of- Government (WOG)- strengthening vertical and horizontal communication. Is this the return of the old model? 17/06/2016 6

NPM IN AFRICAN COUNTRIES  Nigeria: Return of democratic governance in 1999  restructuring the civil service -down-sizing and right-sizing regime  creation of autonomy in public organizations  An attempt to incorporate modern technology - E-governance.  budget implementation tie to specific goals, and objectives, or programme  commercialization and privatization of SOEs 17/06/2016 7

NPM IN AFRICAN COUNTRIES  ZAMBIA  From the1990s  PRIVATIZATION  Commercialization of SOEs  PSRP – Rationalization of structures, rightsizing/downsizing, decentralization  Shift from input(line – item) budgets to (output/outcome) budgeting  National Decentralization Policy  Corporate governance/Board of Directors eg school Boards  PPPs  E-vouchers (FISP)  Formulation of citizens’ charter - on-going 6/11/

NPM IN AFRICAN COUNTRIES: MAJOR ACHIEVEMENTS  Rationalization of structures, rightsizing/downsizing, decentralization  Embracing e-governance  Introduction of user fees /efficiency, customer orientation 6/11/

NPM IN AFRICAN COUNTRIES: MAJOR WEAKNESSES  Emphasis on professional management in public sector is yet to be achieved eg: recruitment practices  Laying of explicit standards and measures of performance is not properly and regularly enhanced. Fixed jobs subsist  A shift to greater emphasis on output controls /results is a challenge because a result of cultural affirmative practices in our administrative system eg centralized decision making  A shift to disaggregation of units in the public sector organization has not been properly done (huge government depts)- political will  A stress on greater discipline and parsimony in resource use has not been achieved: inflated costs of contracts/corruption  Partial rather than strict application of NPM - ‘old wine in new bottles’  Developing institutional frameworks: political &legal framework 6/11/

NPM: STRENGTHS AFRICAN  SAPs led to efficiency but sustainability –a challenge  Reduction of public deficits BUT retrenchment packages “reversed” the gains in efficiency  Rightsizing  Job losses, high unemployment levels from SAPs and e- government 6/11/

NPM: DILEMMAS  DILEMMAS:  contention that contractual production is always more efficient than direct bureaucratic production is not borne out in evidence  customers and citizens are not the same  Public sector fundamentally different from the private sector  NPM tends to challenge the very goal and core values/high ethical standards of public administration: equity, university, prestige of the public sector.  Too much state vs too small state/lean government in developing states What happens when there is market failure? Government intervention through price controls, direct provision.  E-government risks 6/11/

CONCLUSION  NPM MODEL: A PANACEA TO PUBLIC SECTOR PROBLEMs?  It is a partial solution – efficiency, customer focus, democratic administration.  However,  There are dilemmas- lean state tends to undermine the development role of the state particularly in developing countries  Core values of the public sector are challenged by NPM  Recommendation: apply “softer version” of NPM BUT harsh measures like privatization should be applied cautiously and as a last resort 17/06/

THANK YOU 6/11/