New Public Management (NPM)

New Public Management (NPM) is both a political theory and a type of political policy based on the idea that governments should operate more like private businesses. The concept, which arose around the 1970s, quickly spread around the world and became a major fixture of global politics by the 1990s. NPM differs somewhat by country, and its exact definition may likewise differ among theorists. However, the main tenets of this system include making governments more transparent and focused on citizen interests, giving government officials more flexibility and stricter goals and accountability standards, and promoting competition and cooperation with private organizations. These reforms are meant to increase the efficiency of governments and make them serve citizens more effectively.

Background

Over the course of history, most countries in the world developed two distinct sectors of society. One is the public sector, which includes the government of a country and all its various levels and forms. The other is the private sector, which includes everything else in the country, such as privately owned businesses and households. In most countries, these sectors work side by side but remain mostly independent. Traditionally, public leaders and private leaders have observed different goals and methods of administration, or running their organizations.

Until the 1960s, most countries followed traditional forms of public administration. In the following decade, however, many people began to question the way world governments were operating. The rapid cultural, political, economic, and scientific changes of the twentieth century made many people reconsider political traditions.

Many people thought that the public sector had become inefficient: governments were too large and wasteful, their decisions were irrational, their leaders were too prone to corruption, and their concerns no longer reflected those of the common people. Meanwhile, they believed that the private sector had developed more efficient and useful methods of operating that would be of great benefit to all and that incorporating private methods into public matters could bring great improvement to governments.

In the United Kingdom and parts of the United States, leaders began experimenting with new political ideas and governmental structures based more on private-sector ideals. Their experiments inspired similar changes in New Zealand and Australia. From there, even more governments began attempting reforms, until most of the countries involved with the Organisation for Economic Co-operation and Development (OECD) were redesigning their traditional policies. Other major international organizations, such as World Bank and the International Monetary Fund (IMF), also embraced these ideas.

Many of these reforms were based on philosophies such as managerialism (the belief that professional managers are needed as leaders) and public-choice theory (ideas relating to the way people use voting to make important decisions). Although countries adopted these ideas in different ways, as suited to their circumstances, these reforms shared several common elements. In the 1990s, academics studying the phenomenon of the previous decades termed the new movement in government "New Public Management."

Overview

NPM is not a single set concept but rather a multifaceted international movement that has been adopted in different ways by different people. In general, it has attempted to make public governments operate more like private businesses by focusing more on results and serving the people of the country. To do this, most examples of governments following NPM concepts have adopted some similar principles.

One major principle is that of making governments more transparent and accountable. This means taking away any structures that make it hard for ordinary citizens to see what government leaders are doing. It also involves making government leaders aware of the goals and performance standards that they will be expected to pursue and publicly answerable for their successes or failures. In that way, they are treated much more like business employees who are tasked with meeting certain goals and can face censure for not doing so.

Another principle involves expanding and sharing government powers and responsibilities. Instead of concentrating power on one or a few people, NPM pushes for decentralization, in which more leaders are empowered to make decisions in more flexible ways. Instead of making government agencies responsible for all tasks, NPM allows for competition among public agencies and increased communication and cooperation with private organizations.

These and other reforms aim to seek out and reward the most qualified people and groups that can do the best work fastest and most affordably. They also allow these people and groups more powers and flexibility to achieve their goals, for which they will be held accountable. In theory, these reforms not only improve the government but also make it more focused on the will of its constituents. Over time, new additions were made to NPM techniques, largely based on developing private-sector business concepts such as human resources, organizational culture, and the need for excellence.

NPM was firmly established around the globe by the 1990s and has continued to develop into the twenty-first century. Public-sector reforms attempt to keep governments as efficient, effective, and reliable as possible during constant cultural, economic, and scientific changes and the increasing trend toward globalization.

Despite the nearly worldwide embrace of NPM ideas, NPM has faced criticism. Some critics point out that the whole movement assumes that the private sector is somehow superior to the public sector, which may not be as true as originally believed. Not every business concept from the private sector is necessarily applicable or helpful to the public sector. In addition, some critics have pointed out that the idea of giving government officials more flexibility and incentive to produce results may lead to its own forms of corruption, as leaders may use unethical means to meet (or falsely claim to meet) their goals.

Bibliography

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