New Public Management: Global Trends and Implementation

Introduction: NPM as a Global Phenomenon

According to Hood (1991), New Public Management (NPM) has come to represent a global phenomenon. This paper examines the main trends in the worldwide NPM movement since 1991 and considers in which countries NPM has proven to be most successful. Bissessar (n.d.), in the work entitled "The Introduction of New Public Management in Small States," writes that in the 1980s "many countries worldwide attempted to reform their public bureaucracies by replacing the traditional system of Public Administration with what Hood (1991) commonly referred to as New Public Management (NPM)." It was apparent that the ideological justification for introducing NPM was based on the doctrines of the "new right," which placed increasing reliance on market forces and called for a reduced role for the state. The introduction of NPM was thus a universal movement that emphasized competition between service providers, a new mix of reform involving state and market, decentralization, freedom of choice to citizens, and new managers who were "free to manage" (Bissessar, n.d.).

New Public Management promised, "both in academia and government, a cheaper and better government," which came with "the added bonus of politicians being spared the daily humbug of administrative detail. By adopting a new philosophy of administration, politicians would increase their capacity to exert control over the public sector" (Boin, James, and Lodge, 2005). According to Boin, James, and Lodge, "The NPM philosophy has a miraculous quality to it, if only because it promises to reconcile the irreconcilable: less red tape, higher performance, and full accountability. Whilst there are many different definitions of NPM, the core of NPM is easily summarized. Politicians formulate clear targets and specify the various outputs that must be produced. They contract with agents of implementation. Freed from traditional forms of oversight associated with Weberian bureaucracy, these agents will employ their expertise to fulfill the prescribed policy aims" (2005).

Bissessar notes that reforms in many countries were being pursued "with varying degrees of enthusiasm and some governments were adopting one set of policies while other governments focused on other features" (n.d.). Hood (1991) held that the shift from an administrative model to a management model could be attributed to several interrelated imperatives, which he linked to what he termed four mega-trends (Bissessar, n.d.). The first trend emerged from the need to slow down or reverse the growth of government, particularly in areas such as staffing. The second trend was the shift toward privatization and semi-privatization. The development of automation was cited as the third trend, and governmental cooperation represented the fourth (Bissessar, n.d.).

Boin, James, and Lodge state: "Debates about the 'New Public Management' have dominated the disciplines of public administration and public management since the early 1990s (Hood, 1991; Pollitt, 1993). The term has been used in a variety of ways, referring to 'market-based administration' (Lan and Rosenbloom, 1992), decentralized methods of organizing production (Hoggett, 1991), 'the hollowing out of the state' (Rhodes, 1994; Saward, 1997) or 'reinventing government' (Osborne and Gaebler, 1992). These terms reflect both the fear and the excitement that observers have brought to the discussion table" (2005).

Osborne and Gaebler (1992) argue that a core element of the NPM perspective is the belief that the job of politicians is not to "row" the boat but instead to "steer" the boat of public service management. Boin, James, and Lodge elaborate: "This is, in essence, a return to the once classic division between the domains of politics and administration. In this classic perspective, politicians are responsible for making critical decisions; administrators are the experts in implementing them. Politicians should not be engaged too much in micro-management, whereas administrators should refrain from becoming too preoccupied with the political dimensions of their work" (2005).

A second element holds that "administrators should be given much more room to exercise their judgment and to apply their expertise in the implementation of policy. In the NPM line of thought, politicians suffer from the illusion of control: they think that they can micro-manage the policy process. Politicians must learn to trust implementing agents, providing them with authority, discretion, and funds to do the job" (Boin, James, and Lodge, 2005). A third element emphasizes "the continued belief in the pillars of democratic governance: political control and accountability" (Boin, James, and Lodge, 2005). These three perspectives "leave the problem of bureaucratic autonomy to be resolved in practice. The premise of increased discretion and the emphasis on output performance management combine to increase the autonomy of a policy sector. Too much autonomy, however, may give rise to 'runaway' bureaucracies. The right mixture of control mechanisms should prevent this from happening, or so we may deduce from NPM thinking" (Boin, James, and Lodge, 2005).

NPM Differently Implemented Across the Globe

The islands of the Commonwealth Caribbean are comprised of a cluster of nations that were previously under colonial rule and, "apart from a shared history, each of these islands also has a distinctive socio-economic order which has been largely determined by the experiences of slavery" (Bissessar, n.d.). These countries are presently concerned with maintaining a stable democratic system of government, a healthy economic climate, and, with the imposition of structural adjustment conditions in the 1980s, attracting new investment (Bissessar, n.d.). During the post-independence period, many Caribbean countries used the funding of large public services and sectors to justify "their ongoing policy to cater to the wide-ranging development needs of their societies" (Bissessar, n.d.). It was noted, however, that while public services and sectors had expanded in size, there was also an increased expectation of efficiency in these sectors.

There were criticisms that governments had used public sectors as "vehicles for patronage" (Bissessar, n.d.). While committees were formed to examine these criticisms between 1960 and 1980, the reforms actually implemented in these sectors were minimal in nature. It has been suggested that public sector reform in the Caribbean was constrained by a number of factors. Caiden (1991), as cited in Bissessar, suggested that "the history of the country, the geography, and even the culture of the public sectors were critical obstacles to reform" (n.d.). Wilenski (1986), also cited by Bissessar, argued that "the greatest impediment to reform was the lack of political will," though lack of political will appeared to be only part of the problem (n.d.). Mills, as cited by Bissessar, contends that public servants were unable to take decisions because they had been trained by colonial administrators to adhere steadfastly to rules and regulations. The argument has been made that while there were always internal push factors, it was globalization — and the external pressures it brought — that was primarily responsible for the reforms introduced in the 1980s and 1990s in many Caribbean states (Bissessar, n.d.).

Bissessar writes that "globalization is not a single phenomenon. Some writers consider globalization as an economic logo, while others contend that contemporary globalization is wholly exaggerated and that the forces of internationalization depend on the regulatory power of national governments to ensure continuing economic liberalization" (n.d.). Other writers have argued that various internal forces were also influential, including: (1) changing population structures, which meant that the demands placed on public services had to change; (2) mounting criticism of the way in which services were delivered (Hood, 1991); and (3) declines in domestic economies (Bissessar, n.d.).

Globalization and Internal Drivers of Reform

The Caribbean Commonwealth experience suggests that a number of internal factors were responsible for pushing toward reform, but that these were secondary to the largest driving force behind the introduction of NPM: "the external pressure of globalization and, more particularly, the conditions imposed by the International Lending Agencies in the 1980s" (Bissessar, n.d.). La Guerre (1994), as noted by Bissessar, observes that "the structural adjustment conditions that were accompanied by these loans were not confined to the economic sphere alone but also impacted on the public sector as well. Indeed, apart from the regulatory policies to be implemented, it was argued that the public sectors in the various countries should be reduced and service delivery was to become more efficient. It was also suggested that standards and measures were to be introduced and that governments should contract out services that had become too costly. In essence, it appeared that the conditions introduced by the lending agencies were very much in keeping with the general doctrines of NPM that had been introduced in the developed countries" (Bissessar, n.d.).

Furthermore, it was believed that attracting other potential investors would force governments to "introduce efficient and standardized systems of administration" (Bissessar, n.d.). The evidence showed, however, "that the choice of 'new' methods of management had become a regional fad. Indeed, the universality of NPM could not be disputed" (Bissessar, n.d.). New Public Management had been introduced in many countries, including the United States, the United Kingdom, New Zealand, and Australia, and "was accordingly considered a more than appropriate model for the Caribbean and Latin American states as well" (Bissessar, n.d.).

There were, however, various differences in the models of NPM being introduced in each of these countries. Bissessar states that "variations in the extent to which NPM had been adopted in many countries was not a new phenomenon" (n.d.). Hood (1996) notes that "some countries have placed more emphasis on ideas than other countries, and NPM styles have even varied within the same 'family groups' of countries" (Bissessar, n.d.). In Australia, the UK, and New Zealand there was a tendency toward decentralization of personnel management "to line departments away from central personnel agencies," whereas no such move had been made in Japan, where the National Personnel Authority was actually strengthened in the 1980s (Bissessar, n.d.). Similarly, while countries such as Denmark, New Zealand, and Sweden had adopted pay-for-performance policies, Germany had not followed suit.