New Public Management

ESSENTIAL CHARACTERISTICS OF NEW PUBLIC MANAGEMENT AND ADMINISTRATIVE REFORMS THAT NEED TO BE ADOPTED TO STRENGTHEN PUBLIC ADMINISTRATION IN AFRICA

CHARLES E. MHINA (Reg. No. 200808114) MPA (Public Policy & Admin)

February, 2008

A Term Paper submitted to the Department of Political and Administrative Studies for the partial fulfilment of the course MPA 601: Foundation of Public Management and Institutions

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INTRODUCTION:

This paper attempts to explore the essential characteristics of New Public Management (NPM) and administrative reforms that need to be adopted to strengthen public administration in Africa. It begins with an overview of the Traditional Public Administration. It proceeds by defining NPM and giving an insight on the context within which it emerged. The paper goes on to explore essential characteristics of New Public Management. Thereafter, it recommends administrative reforms that need to be adopted to strengthen Public Administration in Africa and the challenges in implementing them. It concludes with a summary of key issues and suggestions posed in the discussion.

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AN

OVERVIEW

OF

THE

TRADITIONAL

MODEL

OF

PUBLIC

ADMINISTRATION:

Public administration refers the aggregate machinery (policies, rules, procedures, systems, organizational structures, personnel, etc.) funded by the state budget and in charge of the management and direction of the affairs of the executive government, and its interaction with other stakeholders in the state, society and external environment.

It also refers to the

management and implementation of the whole set of government activities dealing with the implementation of laws, regulations and decisions of the government and the management related to the provision of public services.

Public administration is defined by several writers as the use of managerial, political, and theories and processes to fulfil legislative, executive and judicial governmental mandates for the provision of regulatory and service functions for the society as a whole or some segment of it (Hughes 2003:8 quoting Rosenbloom 1986). Hughes adds that Public administration refers to the academic study of the pubic sector, and that the particular theory dominant for most of the twentieth century is the so called the ‘traditional model of public administration’ (Ibid).

Public administration denotes the institutions of public bureaucracy within a state: the organizational structures which form the basis of public decision-making and implementation; and the arrangements by which public services are delivered.

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Public administration as both theory and practice began in the late nineteenth century. The underlying principles for the traditional model of public administration include the Max Weber’s theory of bureaucracy, Frederick Taylor’s theory of scientific management and Woodrow Wilson’s principle of separation of politics from administration. This is supported by Hughes connotation that public administration theoretical foundations mainly derive from Woodrow Wilson and Frederick Taylor in the United States, Max Weber in Germany, and the North-Trevelyan Report of 1854 in the United Kingdom (2003:17). It is characterized by; administering under the formal control of political leadership, based on a strictly hierarchical model of bureaucracy, staffed by permanent, neutral and anonymous officials, motivated by the public interest, serving any government part equally, and not contributing to policy but merely administer those policies decided by the politicians (Ibid).

Although it is now being replaced by the so called New Public Management, the traditional model of public administration remains the long-lasting and most successful theory of management in the public sector. It is only that in recent times, its theories and practices are now considered old-fashioned and no longer relevant to the needs of a rapidly changing society.

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DEFINITION AND THE CONTEXT WITHIN WHICH THE NEW PUBLIC MANAGEMENT EMERGED:

New Public Management is a management philosophy used by governments since the 1980s to modernize the public sector. New Public management is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. Based on public choice and managerial schools of thought new public management seeks to enhance the efficiency of the public sector and the control that government has over it. The main assumption in the NPM-reforms is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.

New Public Management reflects a change in attitude. It is a term that refers to reforms that occurred in the public sector. The idea was to make the public system function like the private sector. NPM is defined by some modern authors as a combination of disaggregation (splitting large bureaucracies into smaller, more fragmented ones), competition (between different public

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agencies, and between public agencies and private firms) and incentivization (on more economic/pecuniary lines).1

New Public Management has variously been defined .as a vision, an ideology or (more prosaically) a bundle of particular management approaches and techniques (many of them borrowed from the private for-profit sector) (Pollitt, 1994:1). NPM is thus seen as a body of managerial thought (Ferlie et al., 1996:9) or as an ideological thought system based on ideas generated in the private sector and imported into the public sector (Hood, 1991, 1995). However, some observers have critically suggested that the term, New Public Management (NPM) is a fallacy. They argue that having been in the forefront of public management discourse for over three decades it can hardly be regarded as ‘new’ today (Argyriades, 2002). More controversially they have suggested that to the extent that NPM undermines core public sector values, it is not really about public management but an attempt to displace public administration as a distinct social science sub-discipline and field of practice (Farazmand, 2002).

The emergence of New Public Management (NPM) is associated with the changed role of the state and the growing demands for good governance practices worldwide (Sharma, 2007:4). New Public Management reforms stem from neoliberal ideology, which prioritize market over the state and establishes a goal to run government as a business. NPM reforms shift the emphasis from traditional public administration to public management. The inadequacies of the traditional model of public administration are the determinants for the rise of the new public management. Such inadequacies became apparent in the period between 1970s and 1980. It is thus argued that by comparing outputs with inputs, hierarchical structures are not necessarily the most efficient of organizations. Bureaucracy may be ideal for control but is usually slow in moving; work standardization may entail the cost of innovation. The model of political control was inadequate, illogical and always problematic, in assuring genuine accountability. The so called one-best-way of thinking was criticised of being problematic. The theory of bureaucracy in no longer universally seen as providing the technical efficiency and also tends to be undemocratic. From the economic point of view some scholars posed a criticism, which Hughes (2003) refers to it as the ‘public choice critique’, of the whole idea of

1

Dunleavy P., Margetts H. et, 'New public management is dead: Long live digital era governance', Journal of Public Administration Research and Theory, (July 2006).

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bureaucracy as something that took away individual freedom and was inefficient compared to the market.

New public management reforms have been driven by a combination of economic, social, political and technological factors in both developed and developing countries. A common feature of countries opting NPM reforms has been the experience of economic and fiscal crises, which triggered the quest for efficiency and for ways to cut the cost of delivering public services. The crisis of the welfare state led to questions about the role and institutional character of the state.2

It is now becoming evident that in most developing countries

particularly in Africa, reforms in public administration and management have been driven strongly by external pressures and have taken place in the context of structural adjustment programmes. Other driving forces of NPM related reforms include the supremacy of neoliberal ideas from the late 1970s; the development of information technology (also referred to as egovernment in the public sector); and increased use of international management consultants as advisors on reforms. Other remarkable factors which I consider to be most influential in the case of developing countries include lending conditionality and the increasing emphasis on good governance by the donor agencies.

The wind of change toward market reforms and political pluralism that was sweeping across most of the Western world in the 1980s, and the collapse of communism, sent important messages to most developing countries in crisis that they should also reform. The New Public Management reforms have been impressive because they spread globally within a short period of time. The reception and adoption of the new public management reforms across the globe is not uniform. Up to the 1980s, NPM was broadly seen as a developed country, particularly Anglo-Saxon, phenomenon. However, by 1990s applications of variants of NPM techniques and practices in some developing countries have been noticed.

2

Larbi, G. A., September 1999, The New Public Management Approach and Crisis States, UNRISD Discussion Paper No. 112.

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ESSENTIAL CHARACTERISTICS OF NEW PUBLIC MANAGEMENT:

The essential characteristic features of New Public Management have been stipulated differently by different writers in Public Administration. Key elements include various forms of decentralizing management within public services (e.g., the creation of autonomous agencies and devolution of budgets and financial control), increasing use of markets and competition in the provision of public services (e.g., contracting out and other market-type mechanisms), and increasing emphasis on performance, outputs and customer orientation.

NPM is characterized by its emphasis on reduction and deregulation of bureaucracy, employing market mechanisms or semi-market entities to conduct government action, devolution of responsibility downward and outward in organizations, and energizing the workforce to think in entrepreneurial terms (Carroll 1998:402).

New Public Management avow to fix the problems of government such as low public confidence in bureaucracy, waste, poor programme design and performance deficit. Hodge argues that NPM is grounded on two intellectual themes namely; institutional economics and managerialism (Hodge 2006:38 quoting Lynn, 1996).

Institutional economics proposes

disaggregating public bureaucracies and the use of competition while managerialism includes an emphasis on private sector management techniques, hands-on-professional management and performance measurement (Ibid. p.39).

Sharma analytically asserts NPM as a new paradigm which seeks to implant a new approach in the traditional public administration for enhancing efficiency, productivity, improved service delivery, and accountability (2006:4).

In a precise summary form, he argues that NPM

advocates de-bureaucratization, flexibility, innovation, reliance on the private sector, creation of an enabling environment for private enterprise growth, and use of means other than public bureaucracy for service delivery through contracting out and outsourcing. He adds that NPM advocates offloading and down sizing, or rightsizing, public private partnership, competition and reliance on market forces. It also advocates empowerment, emphasis on results, public participation, decentralization, greater emphasis on productivity-enhancing measures and use of modern information and communication technology, and e-governance (Ibid. p.130, quoting Bertucci et al. 2003; Hughes, 2003; Kaul, 2000).

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Compared to other public management theories, NPM is more oriented towards outcomes and efficiency through better management of public budget. It is considered to be achieved by applying competition, as it is known in the private sector, to organizations of public sector, emphasizing economic and leadership principles. New Public management addresses beneficiaries of public services much like customers (another parallel with the private sector) and conversely citizens as shareholders.

NPM is characterized by its emphasis on reduction and deregulation of bureaucracy, employing market mechanisms or semi-market entities to conduct government action, devolution of responsibility downward and outward in organizations, and energizing the workforce to think in entrepreneurial terms (Carroll 1998:402)

There is a general consensus among many scholars that New Public Management asserts that the market, not the government, is the best allocator of resources; individuals are the best judges of their own welfare; and that the private sector management techniques could be useful to improve government performance (Hodge 2006, Hughes 2003).

However, there is a

disagreement with the idea that individuals are the best judges of their own welfare basing on the belief that in some cases individuals can not best judge on their own welfare; and of such the government has to make judgement on behalf of her citizens for the provision of merit goods and protection of their wellbeing.

New public management reforms are expected to support the wider societal reforms including economic and political reforms aimed at liberalizing the economies and polities of the developing countries. There are expectations that such reforms may help to alleviate poverty. However, the World Bank confesses that Africa is one of the few regions of the world where the commitments to halving world poverty by the year 2015 are not likely to be realized (African Development Bank, 2002).

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ADMINISTRATIVE REFORMS THAT NEED TO BE ADOPTED TO STRENGTHEN PUBLIC ADMINISTRATION IN AFRICA AND THE CHALLENGES IN IMPLEMENTING THEM:

The future of public administration lies in the institution of measures aimed not only at reaffirming the developmental role of public administration and upholding its core values, but also at reconfiguring public service organizations into open, participative, knowledge-sharing, innovating and results-oriented service-delivery systems.3 Even the United Nations measures to revitalize Public Administration today differ from earlier ones in terms of the emphasis given not only to the application of ‘business’ and ‘customer satisfaction’ techniques - a carryover from the early days of New Public Management - but also to the entrenchment of fundamental public service values and ethics. Public Administration Reform can be very comprehensive and include process changes in areas such as organizational structures, decentralization, personnel management, public finance, results-based management, regulatory reforms and several others as discussed hereunder:

Decentralization: In many countries, decentralization provides the context in which administrative reforms interventions are taken up. A major drawback with many decentralization initiatives is the lack of administrative capacity of the public administration at the local levels and the absence of accountability lines of this administration to the local people. For decentralized government to succeed there needs to be a centre to enable it; thus attention must focus on, for example, fiscal transfer mechanisms; mechanisms for ensuring local level planning and budgeting is informed by and integrated in national planning and budgeting; systems for monitoring and oversight linked to the budget; and appropriate human resource regimes. The common shortfall entailed to decentralization is that; it does not automatically lead to improved developmental outcomes for the poor and other disadvantaged groups; in the absence of effective local accountability frameworks some local officials may divert the funds for personal gain; limited capacity of local governments may hamper local decision making and service delivery.

Downsizing and Restructuring the Government Machinery: There is a need for job-redesigning and reallocation of functions between government departments with the target of reducing the volume of the public service (workforce). This may includes changes in the internal structure of departments, the reallocation of functions 3 United Nations (2005), Public administration and development, Report of the Secretary-General, No. A/60/114.

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within departments, and increasingly, the allocation of functions to bodies other than ministerial departments, with the creation of executive agencies and privatisation of government enterprises. Through privatizing state enterprises, outsourcing and contracting out some of the government functions, the public administration can succeed to downsize and reduce its role into a manageable size. This will then reduce government expenditure while increasing efficiency in service delivery and improving performance. In addition, new tools, notably those based on Information Communication Technology, have opened up new possibilities for coordinating the different branches of government better, and for forging a more direct link between the citizen and government hence reducing dependence on labour capital. However, downsizing the government machinery does not go without criticism and resistances as Sharma argues that, retrenchment of staff in the public service assumes political dimensions and becomes a political issue in democratic countries irrespective of its merit. He adds that some such decisions are difficult to implement due to resistance from the existing Trade Unions (2007:27). The most important concern here should be the government to be efficient, facilitative, and appropriate to its circumstances rather than merely small as we advocate downsizing.

Information and Communication Technologies and e-governance: Building Public Sector capacity in information, innovation, and Technology is crucial in order to seize the opportunities of globalization. Information and Communication Technologies (ICT) provides increasingly powerful process tools that can be deployed to address traditional development problems in innovative ways. Such information technologies as Wide Area Networks and the Internet, can transform government interactions with citizens, businesses, and other parts of government. However, the focus needs to be less on the technology per se and more on the transformation and reorganization of functions and interactions that it permits. By locating service centers closer to clients, customers and partners, e-governance can facilitate better, user-friendly service delivery, improved and economical links with business, and more efficient and rigorous management of government business. For example, community-based computerized kiosks in India provide the basic information, documentation and forms needed for citizens in rural villages, saving people time and money and extending the range of services available locally. African countries can benchmark from the success story of e-governance in India. In addition to enhancing relations with the public, e-government can also improve the internal working of an administration. Introducing Management Information Systems within government departments, for example, can result in improved personnel

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management, cost reductions and improvements in service delivery and government procurement, better management of technical assistance funds and projects, and increased revenue collection. It is the challenge for developing countries to localize this technology and utilize the potential opportunities in it.

To many African countries, Information

Communication Technology development has been a failure in rural communities.

Contracting-out and Outsourcing: a means for public service delivery through sources other than public bureaucracy: Governments in the developing countries can strengthen their public administration by contracting-out and outsourcing non-core activities to the private sector firms. Contracting-out and outsourcing all refer to the process of purchasing goods or services via contractual agreements from private or not-for-profit organizations. The term contracting-out is often used specifically to denote the contracting process targeting the purchasing of goods and services that once were provided by government or thought to be a part of the responsibility of government to provide. The basic idea here is to reduce the activity of the state and to utilize competition as a means of assuring the best price and efficiency. Government should let the private sector provide services while government steers. In both contracting-out and outsourcing, there is a strong need for managing competition by making the private firm bid against each other, with the bidding process resembling an auction where the lowest-priced bid (for provision of service) wins. The World Bank study (2004) concludes that for contractingout to be successful, governments should seek to foster competition in the provider’s market, introduce mechanisms for ensuring transparency in the selection process to avoid corruption, and establish systems for strong performance monitoring.

De-bureaucratization: De-bureaucratization as one of the components of new public management aims to respond to structural deficiencies in the public sector through simplification and redesign of the bureaucratic processes, with the objective of increasing efficiency and improving the ability of these processes to respond to citizens’ needs regarding the provision of public services. It does not mean doing away with bureaucracy, legal framework, rules and legitimate sources of authority, but checking the negative impact of (Weber’s) ideal model of bureaucracy (Sharma Op cit. p.23). Governments in the developing countries (particularly in Africa) need to address and provide remedies to the ailments of bureaucracy such as red tape, excessive paper work,

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unnecessary long procedures, corruption and arrogance of public servants towards clients so as to strengthen their public administration machinery.

Privatization: Privatization as a hub of new public management refers to any means of increasing private provision of what had been thought of as public goods and services. In much of today’s literature, privatization is equated with the total divestiture of goods or services (for example selling off public enterprises). It simply denotes the transfer of ownership of public enterprises to private firm through enterprise sales.

However in its broader spectrum, privatization

comprises all measures and policies aimed at strengthening the role of the private sector in the economy including contracting out, management contracts Franchises, leases, public-private partnership and many other (Sharma, 2007:28). Privatization is sought to increase efficiency, improve productivity, downsize the public sector, promote competition, stimulating the private sector, and relieve the government from loss-making state enterprises. Although many African countries have undergone privatization, the experience revealed that in most cases privatization did not achieve the intended objectives. Corruption during the process of valuation and sale of state owned enterprises was among the barriers for realization of privatization objectives, as Sharma cite the case of Zambia during the last few years where it was demonstrated how economic liberalization and privatization could increase corruption.

Most public enterprises

after being privatized died a natural dearth. In some countries the privatized enterprises changed the business or ceased to produce. This rises the question ‘does privatization better or worsen the performance of state owned enterprise?’ Sharma recommends that the role of government should not end after implementation of privatization plans, but should continue (though in a changed form) to safeguard public interest and monitor the performance of the privatized undertakings and the private sector in general (Ibid, p.29).

Deregulation: Deregulation reduces the legal constraints on private participation in service provision or allows competition among private suppliers for services that in the past had been provided by the government or by regulated monopolies. In recent years privatization and deregulation have become more attractive alternatives to governments in developing countries. Local governments are also privatizing by contracting out service provision or administration. The challenges and constraints on practical implementation of such kind of reform is the nature of relationship between the public sector and private sector. The two are not very much friendly

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and they all deal with each other with distrust perspective. Moreover, deregulation should not be taken to mean going without regulation since that will not mean democracy but chaos.

Creation of Democracy Enhancing Public Institutions: Governments in Africa should increasingly create new institutions, with a clear separation from the formal public administration but with some oversight function, and in some cases as an integral part of it, whose function is to further democratic governance. Such institutions will provide new spaces for political inclusion, for both civil society and the opposition, and arenas in which democratic political culture can be nurtured and promoted. These institutions include ethics or anti-corruption commissions, electoral commissions, and, in post conflict countries, truth and reconciliation commissions. They form part of the rubric of pubic administration reforms because they are an increasingly important part of many public administrations, and because they enhance the public administration by making it more accountable, transparent and open to greater public participation, subject to checks on abuses, and less prone to conflicts.

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CONCLUSION:

The exploration of essential characteristics of New Public Management in this paper revealed that NPM is characterized by its emphasis on reduction and deregulation of bureaucracy, employing market mechanisms or semi-market entities to conduct government action, devolution of responsibility downward and outward in organizations, and energizing the workforce to think in entrepreneurial terms. It was also highlighted that as part of and in support of NPM requirements, several administrative reforms need to be adopted by African countries so as to strengthen their public administration. The recommended reforms include; decentralization, downsizing and restructuring of government machinery, ICT and egovernance, contracting out and outsourcing, de-bureaucratization, privatization and creation of democracy enhancing public institutions.

NPM has not been the great success it was expected to be in developing countries because of the absence of democracy, the absence of the basics of an old public administration discipline which made the introduction of the new elements of informal structures and practices difficult to sell. Most countries had a motive to implement administrative reforms but lacked capability to undertake such reforms in the expected manner. A combination of capability and motive is therefore critical to the success of reform. Clearly, Africa needs to overhaul its administrative systems to make them competitive and democratic.

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