New Public Management

NEW PUBLIC MANAGEMENT
NPM emerged in the 1980s and the term NPM was coined by Christopher Hood in 1991
and used in his paper ‘A Public Managment for all seasons’. It was an attempt to make the
public administration more business like and wanted to improve the efficiency of govt. By
borrowing ideas and managment models from private sector. NPM was an attempt by
public administration to adjust to the neo liberal ideologies which dominated the socio-
economic policies since 1990s. By then, there was dissatisfaction with the new public
administration which was perceived to have brought excess bureaucratisation of the
government. During the interventionist and welfare state of 1970s, public administration,
under the NPA paradigm, was given vast responsibilities to manage almost all the socio-
economic aspects of the nation. Due to this, Public Administration was becoming bloated,
inefficient, complacent, unaccountable, and wasteful. Hence, to make the public
administration tuned to the changing socio-economic conditions in line with the neoliberal
principles, public administration came up with the concept of new public management
(NPM).
NPM was the outcome of the second Minnowbrook conference in 1988. NPM is also
considered as a synthesis of public administration and private administration( business
managment). NPM focused on competition, efficiency, economy, performance
measurement, accountability, and citizen as customer. NPM again brought back the
politics-administration dichotomy by taking Public Administration away from policy
making to program implementation and management of public organisation. NPM created
administration-management dichotomy in Public Administration.
NPM recommended withdrawal of government from all those areas which can be
managed better by private sector. Thus, it suggested retreat of the state/govt. Private
sectors were given prime role in economic management and entry into public service
delivery. NPM signalled coming together of public and private administration. Contracting
out government services, outsourcing, and public private partnership (PPP) became the
norm under NPM.
In a nutshell, NPM was market-based approach and private sector management style in
public administration. NPM aimed for result- oriented, performance, and accountability
driven public sector. It also suggested separation of policy making role and policy and
program implementation role within the public administration; thus, it created
administration- management dichotomy in public administration. Under the NPM the role
of government changed from doing everything itself, that is ‘rowing the boat’ to let private
sector do most of the things under the governments watch, that is ‘steering the boat’. It
emphasised upon the citizen who were the recipient of the services and aims at providing
them better and faster services. For example, having a quasi market structure where
public and private service providers compete with each other to provide productus and
services.
FEATURES OF NPM:-
• Main aim of NPM –achieving 3Es. Efficiency, economy, effectiveness. It adovates

3Es as well as flexibility and responsiveness in administration. For this it requires
structural changes from the rigid, hierarchic, rule based bureaucratic form of
administration to flexible, market based form of public managment.
• The supporter of NPM propose that there should be a special group of managers
(not administrators as they are not experts at skills) called chief executive officer,
who will be experts at skills like negotiation, setting and executing contracts.
• NPM emphasizes on private sector style of management.
• Publis organisation should play an entrepreneurial role to bring 3Es through
methods like performance approaisal, setting targets, cost cutting, responsiveness,
managerial autonomy, flexibility, contracting out, accountability, enabling
competion, IT, quality improvment, decentralisation and downsizing.
• Govt. Should focus on steering rather than rowing. Rather than becoming a doer of
public activities, govt. Should become the distributor of benefits. Separation of
provision and production of public goods by contracting out.
• Citizen friendly and reponsive administration. Greater emphasize on consumerism.
• Increase competition through the introduction of quasi market system and contract
systems.
• Supports reduction in expenses and facilitating income growth.
• NPM is result oriented and objective focused/goal oriented. Secure participation of
people through the decentralization process.
PRINCIPLES OF NPM:-
10 principles advocated by osborne and gaebler in their book Reinventing
Government:
1. Catalytic govt: the govt. Should also concentrate on catalyzing (involve) the
public sector, private sector and voluntary/ non-govt. Sector towards
resolution of societal problems and not just on providing services.
2. Community owned govt.:- the govt should strengthen and empower the citizens, families
and communities to solve their own problems.
3. competitive govt.:- the govt should inject competition among different providers of good
and services by rewarding efficiency and economy. This increases performance and
reduces cost.
4. mission driven govt.:- the govt should be driven by its goal and not by its rule and
regulations. In other words, it involves transforming rule oriented govt into goal oriented
govt.
5. result oriented govt:- the govt should focus on outcomes by setting targets and mission.
6. customer driven govt:- the govt should regard the people as customers. It should meet
and work towards customers and bureaucracy . It involves offering them choices,
surveying their attitudes making services convenient and allowing them to make
suggestions.
7. enterprising govt:- the govt should focus on earning money rather than spending. It
should put its energy into resource mobilisation by using fees , saving, enterprise funds
and so on.
8. anticipatory govt:- the govt should prevent the problems from arising in the first plaxe
rather than cure them after they occur and not just deliver services to meet ends.
9. decentralised govt:- the govt should decentralise authority , i.e. disperse authority from
higher to lower level.
10. Market oreiented govt.: the govt should opt for market mechanism rather than
bureaucratic mechanism.
CRITICAL EVALUATION OF NPM:-
Following are NPM’s benefits:
• Made Public Administration Slim & trim, competitive, efficient- ‘Minimum Govt Maximum
Governance’. • Citizen treated as customer- people got choice, voice, quality service from
govt. • Private sector joined Govt. in public service delivery- better public services •
Performance measurement, program evaluation, output-outcome framework,
rewards/punishment – increased accountability • Reduced govt. spending, wasteful
expenditure, fiscal discipline. • Allowed govt. focus more on core sovereign functions- law
& order, defense, policy making, social justice, environmental issues, regulation, etc
leaving productions and service deliveries mainly to private sector. • Greater use of ICT in
Public Administration – e-Governanc.
Despite such positives, NPM is criticized on many counts. First and foremost criticism is its
excess reliance on market principles and private sector management style which diluted
the publicness and uniqueness of the public administration. NPM performed poorly on
social equity, fairness, social justice, public accountability and public value criteria. Many
criticised that in NPM there is neither anything ‘New’ nor there is anything for public. •
Marketisation and managerialism of Public Administration undermined democratic
decision making, Public value creation, and developmental/welfare role of Govt. • Its focus
on narrow economic objectives (efficiency, performance, cost-cutting, etc) and
impersonal business management practices diluted public spiritedness and uniqueness of
Public Administration. NPM blurred (made hazy) the distinction between public and private
administration.
CONCLUSION:
Despites many benefits and criticism, Today, NPM is largely discarded, overtaken by
newer ideas such as New Public Service (NPS), and Good Governance model. Public
Administration today is trying to regain its ‘publicness’ and uniqueness by going back to its
root of action arm of Govt which is sensitive to societal values and problems and aiming for
creation of Public value.

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NEW PUBLIC MANAGEMENT

• Main aim of NPM –achieving 3Es. Efficiency, economy, effectiveness. It adovates

CRITICAL EVALUATION OF NPM:-

Following are NPM’s benefits:

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