New public management (NPN) is considered a global phenomenon especially during the early 2000s. This practice has been around for more than 30 years now in European public sectors (you can read about it here). Its management practices and techniques come chiefly from the private sector.
New public management Definition
NPM falls under management philosophy category which was utilized by governments beginning in the 1980s to revise the public sector at that time. The term is actually used to define the reforms in public sector throughout the world. NPM is currently described as deliberate changes made to the structures and procedures of organizations belonging to the public sector.
NPM is simply a theory regarding the recent paradigm changes on how to govern the public sector. This first started in the United Kingdom and later spread to the United States. Other countries that followed suit were Australia, New Zealand, Scandinavia, and nations in Continental Europe. This type of management is considered a part of the executive revolution that continues to affect many parts of the world to different degrees.
To be clear, NPM is not meant to replace the old frameworks that have been in existence. Rather, this adds a fresh approach to the authority of the public sector such as contractualism. Though the practices of public administration are still around, its theories and methods are considered out-of-date which is why NPM was created to meet the needs of the rapidly changing communities.
Why New public management Emerged
New public management is said to have developed because of the belief that greater market orientation can lead to more cost-efficient transactions and procedures made by governments. The goal here is to make sure that there are no negative consequences related to other considerations and objectives while implementing new public management practices.
Based upon the choice of the public as well as managerial schools of thought, NPM was developed. This was to enhance the public sector’s effectiveness and the authority that the government has on it. With NPM, it is possible to achieve a change in attitude as believed by so many of its supporters.
The principal idea of NPM is to create a public system that works in a way that is similar to the private sector. This is why there are modern authors that describe NPM as a mixture of disaggregation, competition, and incentivization. Nevertheless, its emergence is believed to be connected with the changed role of the government and the growing demands of the people for good governance methods around the world.
The Catalysts for Big Public Management Reforms
The reforms are caused by different elements including a combination of social, technological, political, and economic factors. Countries that turn to this route have either experienced or are experiencing fiscal and economic crises. These set off the hunt for efficiency and ways that would allow them to cut the expenses on delivering various public services. The state of the public led to questions about the role and competence of certain institutions. Hence, they follow the NPM route.
Meanwhile, in developing countries, the changes made in public management and administration developed because of external pressures as well as the structural adjustment agenda. There are many other reasons why new public management reforms took place. Among them are the dominance of neoliberal ideas, information technology development, and the growth and utilization of international management guides as reform advisors.
In some cases, new public management can be very beneficial but there are also limitations when applying some of its elements to crisis states. This is why the new public management approach is never viewed as a panacea for public sector problems. However, if governments in crisis are able to carefully select and adapt to some of the elements of NPM, this practice may prove to be quite advantageous.