New Public Management

New public management 1-NPM history and evolution A-Performance measures in historical perspective It might seem that debates on the effectiveness of techniques associated with NPM have at best a very limited historical dimension as most academic commentators have taken the view that NPM, as a programme of public-sector reform, dates from the early 1980s. However, this does not mean that techniques identified with NPM and debates around such techniques do not predate NPM as a reform programme.

To illustrate the operation of public management ‘before NPM’ three examples are used. The following selection criteria are deployed: that performance measures linked to a policy goal and mechanisms designed to ‘improve’ performance in terms of the indicators are used; and that the public-sector programme in which the performance management techniques are applied has substantial population coverage, i. e. these are examples of substantial public-service programmes.

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The examples used are: the attempt to manage performance standards in elementary education following the ‘Revised Code’ of 1862 till the de facto abandonment of the policy in the mid-1890s; the ‘crusade against out relief’ under the Poor Law in England and Wales between circa 1870 and the early 1890s; and attempts to encourage higher acute hospital throughput in the National Health Service (NHS) in the 1950s. The term ‘elementary education’ was used in nineteenth-century Britain to refer to the formal education provided for the working class.

At the point at which the Revised Code was introduced the state provided subsidies to voluntary provision of elementary education (in the two decades preceding the introduction of the Code, central government expenditure on education had quadrupled). Over the period during which the policy operated (to 1895) the number of children in state-regulated elementary schools in Great Britain increased almost fivefold from just fewer than 1 million to 4. million (the total population increased from 23. 7 to 34. 6 million over the same period). Grants were regulated by ‘codes’ and the Revised Code, which was introduced in English schools in 1863, was designed to deal with a perceived deficiency in elementary education. It was argued that teachers devoted excessive time to teaching older children and consequently neglected the instruction of younger pupils in what would be currently called ‘basic skills’.

The ‘performance management’ policy introduced by the Code was to link grant payments to schools with the success of children in examinations in elementary reading, writing and arithmetic, where failure in any of these subject areas, in an examination administered by a government inspector, would result in loss of a substantial portion of the grant. Over the three decades of its operation the policy went through a series of complex modifications.

By the mid-1890s a diverse set of objections to the original concept of linking grant to pupil examination performance engendered a shift to a pattern of inspection which removed the obligatory annual examination and allowed inspectors to base their reports on observation of work in schools. The ‘crusade against out relief’ was a policy which sought radically to reduce numbers on ‘outdoor relief’ under the locally-administered Poor Law in England and Wales from circa 1870 to the early 1890s.

In this period the Poor Law constituted the de facto ‘social security’ system. At the point at which the policy was initiated there were just over 1 million ‘paupers’ in England and Wales: around 4. 5 per cent of the population. Most poor relief was given ‘outdoors’, i. e. without requiring the recipient of support to enter a workhouse, and at the beginning of the ‘crusade’ well over 80 per cent of paupers received outdoor relief. The policy was premised on the assumption that outdoor relief was being given indiscriminately, creating ‘dependence’ on the state.

The appropriate response, it was argued, was to manage outdoor relief by applying highly-restrictive rules following the precepts of various ‘strict’ Poor Law Unions. The key performance indicator was the outdoor pauperism rate (outdoor paupers as a per cent of the population). The overseeing government department, the Local Government Board (henceforth LGB) sought to diffuse ‘best practice’ by publishing ‘data compares the performance of unions’ with respect to this indicator and this was designed to show the gap between strict unions and their lax counterparts.

Such demonstrations were reinforced by LGB circulars and the power of LGB inspectors to attend meetings of Poor Law Guardians. Initially the policy had a powerful impact and numbers on outdoor relief in England and Wales fell by nearly 40 per cent between 1871 and 1878. Further major reductions were, however, not achieved and numbers on outdoor relief fluctuated around roughly 10 per cent plus or minus the 1878 level for the duration of the policy. The end of the policy is frequently dated at 1893. This date is elected because the Local Government Act of 1894 rendered the Poor Law franchise more democratic and LGB policy, in part reflecting collectivist criticism of the basis of the crusade, became more relaxed, thus 1893 was the final year of radical ‘dispauperisation’. The creation of the NHS in 1948 involved a radical shift in population coverage leading to problems in predicting the cost of the Service. This was contributory to major cost over-runs in its first two fiscal years with expenditure exceeding the estimate by 39 per cent in 1948-9.

While this had a number of effects, pressure for control over expenditure was particularly marked with respect to capital investment. It was generally estimated that capital expenditure on NHS hospitals was running at around one-third of the level of the end of the inter-war period in the early 1950s. Universal access created increased demand for hospital care but restraint on capital expenditure meant that the scope for increasing capacity by adding hospital beds was very limited.

This tension generated interest within the Ministry of Health in more intensive use of hospital beds. This interest was exemplified in a detailed discussion in the Chief Medical Officer’s report for 1952. Hospital throughput (officially defined as the numbers discharged from, or died in, hospital per available bed) was conceptualised as a key performance indicator. The report included data contrasting throughput rates in NHS hospitals and also advanced various suggestions for managing throughput.

These included proposals related to the impact of professional practice on throughput and it were suggested that encouraging patients to be ambulant at an earlier stage would allow for earlier discharge. As with the Poor Law crusade, the aim was to construct a standard of ‘best practice’. Thus throughput rates achieved in other jurisdictions (Canada and the United States) were treated as objectives to be aimed at, and recommended practices such as ‘early ambulation’ played an equivalent role to ‘strict’ rules on outdoor relief. There was a substantial increase in throughput in NHS hospitals in the 1950s.

Thus between 1949 and 1960 while available beds increased by 5. 5 per cent the numbers of patients discharged/died increased by 40 per cent. There was no abandonment of an interest in increasing acute hospital throughput but, by the early 1960s, there was a major contextual change. As was indicated above, the emphasis on throughput in the 1950s was strongly related to very low levels of capital investment. In contrast the 1962 Hospital Plan, while arguably delivering a lot less than it promised, did create a commitment to a much larger long-term capital programme

B-New public management definition 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. The main hypothesis in the NPM-reform wave 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.

NPM is represents a new paradigm or not, its attempt to transform the public sector through organizational reforms that focus on results in terms of efficiency, effectiveness, and quality of service appears to fit nicely into the larger, political theory of governance. NPM is: An important aspect of the New Labour legacy a decade after the election of the first Blair administration has been the commitment to ‘reforming’ public services using managerial techniques associated with ‘New Public Management’ (NPM).

Also this commitment has been embodied in institutional changes such as the creation of the Prime Minister’s Delivery Unit and the creation, under the aegis of the Treasury of Public Service Agreements designed to link public funding with explicit performance targets. NPM is the “shift in public management styles” (or public management reform) “consists of deliberate changes to the structures and processes of public sector organizations with the objective of getting them (in some sense) to run better”. 2-Key mechanism of NPM People (political leaders and civil servants) are those who manage public resources by issuing and implementing policies, strategies, programs, projects. People (civil society) are those who benefit from the results as well. That is why people are viewed as the key mechanism of the NPM: people for people. The NPM needs competent and committed managers, which implement policies and provide services to the public in ways that are: • Low cost – economical; • Maximizing outputs within budgets through good work practice – efficient; • Satisfying clients/customers with quality – effective; • Seen as friendly, fair and honest – ethical; Open, keeping the public well informed – accountable (to end users). • Consultative, taking into account priorities of clients (including those of the disadvantaged categories) – responsive. • Adaptable, selecting what appears to generate positive outcomes and giving up what is harmful for the economy, for the society, for the environment – eclectic. 3-NPM changes in structural (hierarchical) changes: 1- Decision making is decentralized, made at the location close to where the business activity is taking place 2-Structures evolve from hierarchical to flat networked -All the elements of the society are connected, 4-communicate with one another Structural change includes: • Retrenchment or downsizing the public sector organizations • Merging or splitting the departments, in order to improve coordination or to sharpen focus and encourage specialization • Privatization • Decentralization • Corporatization or agentification NPM changes 🙁 processes changes): • New financial management procedures • New performance management procedures • Explicit standards and measures of performance • Output controls • Parsimony in resource use Competition • Incentivization • Public value management and public value pragmatism generated by: – networked governance or collaborative government or public-private partnerships or joined-up government • Fostering dialogue with civil society i. e. information, consultation, active participation as a result of – Building open government and a citizen-centered governance i. e. accountability, transparency, openness. Developing a comprehensive legislative or regulatory framework for enhancing transparency and accountability of lobbying.

While process change includes • Hands-on professional management • Private sector styles of management practice but moderation in •Running government like a business • Flexibilization of previous practices in personnel, IT, public procurement and other functions, generated by the disaggregation • The use of market-type mechanisms • Liberalization • Modernization of services delivery mechanisms (e. g. introduction of the government. 4-Core of new public management: Core of “New Public Management” Not what government ought to do. But how to do it better• Sometimes advanced as the best solution to• government’s key problems–Builds on principal-agent models and new institution economic 5- Basic elements of new public management strategies: 1-Strategic Planning From incremental to comprehensive look at Government activities How: devise a plan for future Goal: produce consensus of government’s direction 2-Incentives • From authority and control to markets and results How: – Create semi-autonomous agencies – Write contracts to structure government work • Goal: replace top-down control with bottom-up focus on results 3- Flexibility From rule based to results based accountability • How: employee empowerment, market based incentives • Goal: free employees to do what they know is right Results • From focus on inputs to results • Defining results but how? – Outputs: government activity- service delivery – Outcome: impact of government activity • How: measure, reward results • Goal: fundamentally transform government’s operations 4-Results • From focus on inputs to results • Defining results but how? – Outputs: government activity- service delivery – Outcome: impact of government activity • How: measure, reward results Goal: fundamentally transform Government’s operations 6-civil service paradigm under resulted oriented management 5. 5 Modernisation of Civil Service Management Systems Computerized System of Integrated Personnel and Payroll Management ( known as “Postes Budgetaires”), Under the new personnel management system, as laid down in the Standing Orders, the post has become the central point in management, around which incumbents and salaries revolve. Following this innovation, the Government will put in place a computerized system of integrated personnel-payroll management.

This system is designed to establish a local and country-wide network covering the entire civil service. Its centre will be within the Ministry of Civil Service and Labour, from where it will be connected to the different Ministries, Government institutions and all provinces in the country. This computerized system will help achieve the following: •Day-to-day control of personnel movements; •Efficient control of payrolls and monitoring of posts to be filled; •Forecasting and planning personnel requirements; Adapting better the personnel in place to approved posts, on the one hand, and the same personnel to available budget appropriations, on the other hand. •Getting prompt access to data on civil servants •The way forward •Installing the computerized system of integrated civil service resource management; •Preparing the training programme and training sessions for users of the above system in Ministries and Provinces •Extending the computerized system to the entire public sector 7- NPM benefits and weaknesses: Benefits of new public management:

To quote Hughes, I comment that NPM is based on: a belief in the Primacy of economics, the usefulness of private management methods, and a desire to reduce bureaucracy. It has a more flexible labour market and Emphasize on customer driven change. It is for this reason that NPM can make the Allocation of resource more effective. To borrow Hughes phase, NPM is a Change from an administration and professional bureaucracy to a more managerial and Market-based system after pointing out those words, he goes on to Say, those changes in the machinery of government as the move from policy Administration to policy management.

This clearly shows that NPM is the attempt to implement management ideas from business and private sector into the public service. In Britain the traditional techniques of social administration have been practiced over The past decade and a half its trait is bureaucracy , routinization , focused upon procedures rather than outcomes , and run for the producers rather than for the final consumers . the traditional techniques of social administration have their own problem and on account of the new right thinking .

NPM started to be practiced in the public sector. What are the benefits of NPM? The Strategy of NPM can make public sector practice efficiency and solve the old problems. The features of new public management are the difference between traditional public administration . NPM wants the reduction of bureaucracy and to make organization flexible ,so at the same time it can attain with the three Es : economy ,effectiveness and efficiency . NPM attaches importance to the three Es : ,and achievement measurement and rational strategic disciplines .

NPM also puts emphasis on devolution of responsibility and letting the market handle itself ,accordingly to a focus on competition and market testing makes it clear that NPM has more in common with a dynamic business . is customer –or market-driven ,and is more concerned with managing services and recourses then providing policy advice for ministers . That is to say . NPM pays much attention to monetary incentives , demand led and customer driven ideas .

From this view point ,one may say that the devolved system of financial accountability should help focus resource allocation and decision –making, These results lead us to the conclusion that the NPM increases elements of accountability in the policy process and a more confident and authoritative directive ,for public agencies. It also makes more realistic strategic short- and medium- Term planning in the public sector. The emphasis is to make Governments smaller and more efficient by making greater use of markets, Competition, contracting out, and setting performance targets. The NPM reveals that government’s . oth local and central are urged to provide a satisfactory service to customers. All in all . NPM maybe can help public sector reform and discover the new way to practice. Weakness of NPM New public management (NPM) is one of the most striking international trends in Public administration in the 1980s ,even though there are many different kinds Of definition for NPM , I draw a conclusion to collect the thought in this article. There are four main ideas associated with NPM: first, it is transforming bureaucratic democratically and passive policy into efficient and effective policy, . econd, it brings the business market methods from private sectors into public, in order to make them quasi-markets and based on customer –demands. Third, it manages the increasing expenditure to make the government more economical fourth, it makes the public sectors steer the private sectors. In recent years . NPM trend has sustained influence all over the world and the best known cases are united-kingdom, New Zealand and Australia. I would like to confer the united-kingdom Case of example and try to find weaknesses of the NPM in this article. Over the past few decades’ . considerable number of studies have been conducted on that NPM is good for our government, however larbi (1999) found out that there are some problems with the NPM in united-kingdom. These include the following: • Most of the civil service resistance the decentralized control, even if the Government wants them to do the NPM, they are reluctance with it. •They wants to keep the traditional practice and not to change to another framework, but they also know that NPM is trend •The technical systems do not work very well, sometimes they can manipulate by management.

Then he pointed out that united-kingdom experience with management devolution just changed the exterior to seem like decentralized but the core of the system still Centralized. For example: some of the ministers or top bureaucrats at the central do not like their power to be expropriated. That is say they do not like to be decentralized At all, they just do things perfunctory to let others seem like they are changed. Through some of people do not have good impressions with NPM; we still have to spread the NPM ideas to let more people understand it and can try to find the best way to do with the NPM.

In my opinion, I also find out two problems with the NPM, they are not only with the United-kingdom but also with NPM trend counties. one is about the NPM system: NPM is an effective and efficiency policy and we need to evaluate its work, but now we do not have a complete system to evaluate However if just put our emphasis on its but come rather than its presses, maybe we might have blind sport in it . the other problem I find is about the quasi-market and The customer demands: if the government just gives the things to the needy people that they want, it probably cost a lot of expenditure.

And that will be against the NPM’s economic idea. So far, we have seen some defects with the NPM. Occasionally it is not a perfect idea and still has room for improvement. If we can find out ways to straighten out its problems, maybe NPM can become more mature and suitable for all countries. List of References •Boston, J. Martin, J. Pallot, and P. Walsh, Public Management: The New Zealand Model. Auckland: Oxford University Press, 1996 •Kelly, R. M. 1998. “An Inclusive Democratic Polity, Representative Bureaucracies, and the New Public Management. Public Administration Review, Vol. 58, No. 3: 201-207. •bill coxall, Lynton robins and Robert leach (2003) contemaporary british Politics new york ; palgrave macmillan •MINISTRY OF CIVIL SERVICE B. P. 403 KIGALIB. P. 403 KIGALI •Agranoff, R. , & McGuire, M. (2003), Collaborative public management: New strategies for local governments. Washington, DC: Georgetown University Press •unpan1. un. org/intradoc/groups/public/documents/un-dpadm/unpan040197. pdf •Dunleavy, P. Hood, C. (1994), From Old Public Administration to New Public Management.