“New Public Management” Douglas Brown Pols 341 March 2013

“New” Public Management Roots of New Public Management Objectives and Methods of Reform Outcomes and Criticisms The Next Generation of Reform

The Roots of New Public Management Four factors:  An Old Paradigm in Gradual Disarray: 1970s and early 1980s  Political and Economic Changes to old order  Force of new ideas and ideology  Emergence of a new paradigm

1. The Old Paradigm and Its Shortcomings Single, Integrated, Hierarchical Civil Service means delay, inflexibility Overly bureaucratic structure and culture Primary responsibility to Ministers alone State-owned monopolies stifle private initiative Results: Overload, Over-reach, Decline of trust

2. Changing Political and Economic Conditions Economic Decline of 1970s Fiscal Crisis: demands for government spending not matched by revenue growth Globalization: new pressures of competitiveness on both private and public sectors New technologies transform workplaces Neo-liberalism becomes dominant ideology

3. Advances in Theory Public Choice: self interest vs public interest assumptions Budget-Maximizing Bureaucrats Principal-Agent theory Microeconomics and the role of the state Managerialism: erasing the private/public distinction

4. Public Sector Reform as a Political Program Bottom-up USA practice (Osborne & Gaebler): mid-70s on Top-down UK: Thatcher “revolution” since 1979 “Forced” Fiscal reform: New Zealand 1980s, Canada 1990s Global advocacy and adoption:  role of OECD, World Bank, IMF etc.

Key Objectives (OECD 1995) 1.Improving strategic oversight by elected politicians 2.Ensuring greater accountability for set objectives 3.Greater contestability and market competition for the provision of public goods and services.

Reform from Within -- Major Themes Steering, not rowing Devolution & deregulation of operations Managerial contracts Results-based accountability Performance measurement Program review and expenditure restraint

Reform through External Agents -- Major Themes Agencification Out-sourcing Commercialization and privatization Partnerships Creating Internal markets

“Reforming the Culture ” Changing bureaucratic behaviour  customer service  incentive structures  flexibility, creativity, risk-taking Seeking a comprehensive, not piecemeal approach Programmatic, not just budgetary

Reform/ Anti-Reform Coalitions Pro-reform:  Ministers (eg Finance, Treasury Board)  Central Agencies  International Institutions (OECD, World Bank)  Consultants and Academics Anti-Reform:  Public sector unions  some line departments  citizen and interest groups

Overall Claims Made for Reforms economic performance improved public sector productivity increased customer satisfaction attained or improved

Taking On the Assumptions… That the civil service is always self- interested That markets work better That public and private management are the same That politics can be ignored

Other Criticisms Weaker accountability to Cabinet Poorer coordination Capacity problems Equity concerns  public service workers  access and quality of service Damage to Public Service integrity and ethics

Beyond New Public Management? Whole of Government approach “Joined-up” Targets Restore public sector ethics Increase policy-making capacity But, still a continuing need to increase efficiencies, and sustain control

Detail: The Six Tests of Program Review 1. Does the program still serve a public interest? 2. Does government have a legitimate and necessary role? 3. Is the program better done by another level of government? 4. Can the program implementation be best transferred to private or voluntary sector? 5. If government does program itself, can it be done more efficiently? 6. Is the program affordable within overall fiscal restraint?