New Public Management: 10 Key Principles

New Public Management (NPM) is an approach that focuses on applying private sector management principles and practices to improve the efficiency and effectiveness of public sector organizations.

In simpler terms, it means using business-like techniques in government to make things work better.

NPM emerged as a response to the belief that traditional government bureaucracies were often slow, inefficient, and lacked accountability.

The idea behind NPM is to introduce market-oriented strategies and management methods to make public services more responsive, cost-effective, and customer-focused. It is a paradigm shift from traditional public administration to New Public Management.

NPM makes a citizen-friendly administration from a rigid, hierarchical, disciplined bureaucratic administration that needs to make weak public administration strong and effective.

NPM is also defined as a process in which the liberal market principles of efficiency and economy are implemented in public sector management for making the public sector more effective.

New Public Management is also known as Managerialism, Market-based Public Administration, Entrepreneurial Government, etc.

So it is easy to identify that NPM emphasizes three Es for reforming public sectors. These Three Es are-

Efficiency
Economy
Effectiveness

Table of Contents

Exponents of New Public Management

The term “New Public Management” was first coined by Christopher Hood in his book ‘A Public Management for all Seasons?’ in 1991. He described NPM as a ‘Marriage of opposites’, one of which is the new institutional economics and the other is a set of successive waves of business-type managerialism’. Due to NPM, Some terms such as managers, service providers, customers, etc, are beginning to gain importance in the public administration discussion.

The book Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector by Osborne and Gaebler, published in 1992, takes this new trend of public administration, the New Public Management, much further.

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Origin of New Public Management

To better understand NPM, let’s discuss how it originated with the help of the following points.

Weak Public Administration
Important Administrative Reforms in the West
Minnowbrook Conference II (1988)
Reinventing Government

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1. Weak Public Administration

The developmental public administration that developed in developed countries from the 1960s onwards weakened in the late 1970s. This administration was mainly run by the government. The Development administration almost failed to give sufficient socioeconomic outcomes. Corruption and opacity were the main reasons behind the weakness of that public administration. So there was a need for a new kind of administrative system.

Must Read- Development Administration: Meaning, Features, And Challenges

2. Important Administrative Reforms in the West

There are some reforms in Western countries for quick recovery of administration. These reforms were largely influenced by New Rights Philosophy. This is one of the main sources for the rise of New Public Management.

New Right philosophy focuses on the free market, individual liberty, libertarianism, supply-side economics, monetarism, Thatcherism, Reaganomics, etc. It was first introduced by Margaret Thatcher (Former Prime Minister of the United Kingdom) and Ronald Reagan (Former US President).

The result of this economic reform is reducing the role of government. And the implementation of this requires a radical change in public administration. And that change is the new public management.

3. Minnowbrook Conference II (1988)

Another landmark step in the rise of the NPM was the Minnowbrook Conference II in 1988. As mentioned earlier, the 1980s saw some significant changes in the US political system under President Reagan. Some changes in state authority can be observed under the influence of neoliberalism.

On the one hand, there are some changes in the work of the government, the responsibilities and work of the government are reduced to some extent, on the other hand, the scope of private work is increasing. The conference is organized to analyze the form of public administration in the changed circumstances.

The main issues that arose from this conference on the transformation of public administration depended on these three principles.

de-bureaucratization,
democratization, and
decentralization

These policies further strengthened the path of the NPM.

Must Read- New Public Administration: 4 Major Landmarks, And Principles

4. Reinventing Government

As mentioned earlier, Osborne and Gaebler are two of the notable names behind the rise of NPM. Their famous book ‘Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector,

The following is a list of the 10 features of a new type of government in this new context they have mentioned that have further strengthened the path of New Public Management.

The new government is committed to ensuring that citizens can access products and services from a variety of sources and maintain healthy competition between the various product and service providers.
It empowers the citizens by limiting the bureaucracy.
The work of an organization is considered a measure to measure the success of various government organizations.
This government is governed by specific goals, not by laws.
This government sees citizens as consumers and looks for many alternatives.
This government believes that prevention is better than cure.
This government focuses on how to make money, not just spending.
This government wants decentralization of authority and believes in participatory management.
This government is more confident in market rules and procedures than bureaucratic rules and procedures.
This government is not only dependent on public administration to solve the problem. This government depends on government institutions, non-governmental organizations, private corporations, etc. to solve social problems.

This new thinking, the new kind of discussion that developed as a result of the discussion of the new type of government, is known as the New Public Management (NPM).

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Principles of New Public Management

The following principles of NPM can be identified from the above discussion.

The main principle of NPM is to emphasize economy, efficiency, and effectiveness by downplaying the importance of regulation.
Reorganizing the bureaucracy into different agencies.
Increase competition through the introduction of quasi-market systems and contract systems.
Expenses reduce and facilitate income growth.
Shift to greater competition in public sectors.
NPM emphasizes more on private-sector styles of management.
Managerialism means the role of the administrator transforms into a manager.
Increasing the flexibility and mobility of organizational structure, personnel, and working conditions.
Greater emphasis on consumerism. To NPM citizens are considered as consumers.
Secure participation of people through the decentralization process.

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Features of New Public Management

Although principals can be identified as features. However, for your convenience, I have highlighted some of the following features of the new public management from the above principles.

Citizen’s empowerment
Decentralization
Restructuring of Government organization or sector
Goal-Orientation
Cost Cutting and facilitates income growth
Managerial Support services
Secure better service to the citizens

1. Citizen empowerment

Empowerment of citizens is one of the major features of New Public Management. NPM assures citizens’ freedom of choice. It secures quality services to the citizens. Healthy competition among the service and product sectors allows citizens to choose their services and products according to their needs and choice.

2. Decentralization

NPM focuses on the decentralization of power from rigid, hierarchical bureaucratic to flexible and dynamic managerial support systems.

3. Restructuring of Government organization or sector

New public management restructures the governmental organization or sectors. The government divides each of its sectors into smaller units and assigns responsibilities to the private sector through contracts.

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4. Goal-Orientation

Its main purpose is to achieve specific goals. That is why NPM emphasizes outcomes rather than procedures and rules.

5. Cost Cutting and facilitates income growth

The main purpose of contracting out of governmental sectors is to reduce the cost of the government and secure the maximum income of the government.

6. Managerial Support services

The main purpose of managerial support services is to secure citizens’ quality service. For this reason, the best talent from the market is hired by offering handsome salaries, incentives, and other benefits.NPM always suggests skill-improving training programs for getting maximum outcomes.

7. Secure better service to the citizens

It is already stated that the main purpose of implementing New Public management is to secure citizens’ quality services.

Conclusion

In conclusion, although the New Public Management was formed in protest of the excessive power of the bureaucracy, it also involved the limitation of state power and the expansion of the market system. The effects of liberalization, a market economy, and globalization have been felt by the developing countries and there have been some changes in the welfare character of the state. But the question remains as to how necessary a completely neo-liberal system and NPM are for developing countries.

However, it is true that the NPM has been able to free the modern administration a lot from the undue discipline, rigidity, red tape, and sluggishness of the bureaucracy.

Let me share with you what you have learned from “New Public Management: Meaning, 10 Principles, and Features“.

References

CHAKRABARTY, BIDYUT KANDPAL PRAKASH CHAND. PUBLIC ADMINISTRATION IN A GLOBALIZING WORLD: Theories and Practices. SAGE INDIA, 2012.
Osborne, D. and Gaebler, T., Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector, Adison-Wesley, Mass, 1992.