New public management, past, present and future

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This literature review uses the work of Ferlie, Pollitt, Hood, Kolthoff, Huberts and Heuvel, Dunleavy, Margetts, Bastow and Tinkler, Jones and Lynn to critically evaluate New Public Management. It examines the most common theories and hypotheses, the methodologiacal problems with any resaerch conducted on NPM and the successes and unintended problems assosiated with NPM. I will also be looking at whether NPM is expected to end or evolve and the theories relating to this.

""There is no clear or agreed upon definition of what New Public Management actually is" - Ferlie et al. (1996)

This quotation by Ferlie et al. in the 1996 book 'The public management in action' suggests that there not much consensus of the definition of new public management. This lack of clear definition has led to disagreement over what New Public Management is and what it should be. It has been agreed that the broad definition is that it is a tool which the government use to control the public sector however there is a distinct lack of agreement when it comes to a more specific definition. One key definition by Pollitt (1993) suggests that New Public Management is based on managerial factors such as increasing effieciency, making labour more productive with the use of targets and allowing managers to manage efficiently, this is clearly a Tayloristic approach and it is based largely on principles found to be the case in engineering and applied to the public sector. I found that Hoods (1991) definition is more comprehensive, he states that there are 7 elements that make up New Public Management. These are: " hands-on professional management in the public sector, explicit standards and measures of performance, greater emphasis on output controls, shift to disaggregating of units in the public sector, shift to greater competition in public sector, stress on private sector styles of management practice and stress on greater discipline and parsimony in resource use" This definition also includes the idea of marketisation and the "primacy of market-based coordination." Kolthoff, Huberts and Heuvel(2006). I think this is one of the best definitions of NPM as it encorporates all of the key components and is much more detailed than Pollitts.

One of the problems with evaluating New Public Management both in the past and in the presently is that as the methodologies that researchers use to evaluate the changes are fundamentally flawed. One of the reasons this is the case is that the period in which NPM is being evaluated, other political and environmental changes can occur and the researcher will not know if it is NPM or the factors that can be attributed to the change (Pollitt 1995). Also there is a problem in what to compare the changes to, it is not practical to compare the pre-NPM and post- NPM after 5 years as the system that was in place before NPM would undoubtedly changed, and it is unknown whether for the better or the worse. Another problem that exists with research done on NPM is the fact that most of the research that has been done has not been independent and taken into account a multi faceted approach. NPM is such a broad topic to research and it would be impossible to research every angle and evaluate it fully. (Pollitt 2000) If research has been commissioned by, for example, the government, they may only commission the researchers to look at a specific area of NPM which is relavent to them, this may introduce bias and may ignore important issues as it is in the government's interest for New Public Management to be labeled a success, then this may affect the type of information that is reported and therefore how much we can generalize from it.

When looking at the past, there are a range of papers about the unwanted side affects that are associated with New Public Management. Such as changing employees motivations because of the over concentration on quantifiable outputs. This has occurred due to outputs being assessed, for example: lowering waiting lists in the NHS, and will affect renumaration for those on a performance based contract. Agency Theory suggests that the stakeholder, in this case the government and the agent for example a manager in the NHS will have the not have the same goals. Agency theory suggests that the agent in this case would act in their own self and become solely focused on meeting the targets set out in their performance based contract compared to their other, no less important duties, that are not quantifiable and are not measured and don't have a target set for them. This in turn has weakened the public service ethos. This shows that New Public Management is not a complete success. It s also important to highlight that the public sector is very different to the private sector and not all of the ideas that work for the private sector can be applied successfully in the public sector. Boston (1996) identified these differences in the two sectors and concluded that the NPM ignores these differences so has limitations in applicability. However there is research by Euske (2003) that shows that although the public, private, and not-for-profit sectors are fundamentally different in many ways, they have many similarities. The similarities present the chance to learn from each other and this is what NPM has done, it has taken ideas from the private sector and used them in the public sector. Hood and Peters (2004) state that: "NPM reformers frequently made much of castigating "one-size-fits-all" forms of beaurocrasy, but NPM reforms often adopted precisely that approach in practice" this shows that while the NPM is attempting to change the beurocratic nature of the previous public sector administration, however NPM itself is beaurocratic and therefore it is contradictory.

NPM can however be considered a success despite these disadvantages due to the cost saving advantages and increased efficiency of the workers, because of the very nature of the NPM there are quantifiable results to measure how efficient and productive staff in the public sector which can help mnagers promote and reward their most productive and efficient staff, although it is important that managers take into account an over all view of the member of staff because of the difficulties I discussed earlier.

While comprehensive reform is still the plan for nations such as Italy, other countries such as Austrailia and New Zealand seem to have turned away from New Public Management and towards critical assessment of the consequences and effects of change both within government and governance systems and for the public and the economy. (Dunleavy, Margetts, Bastow and Tinkler 2005). This paper entitled 'New Public Management Is Dead-Long Live Digital-Era Governance' suggests the New Public Management reform has already been replaced by 'digital-era governance' which is a more holistic approach which is 'needs orientated' and the evolving use of IT in administration processes and decisions. However it can be argued that the 'digital-era governance' that they suggest has replaced New Public Management in itself has problems and is not a comprehensive solution.

However even though New Public Management could be considered unpopular in countries such as the UK and New Zealand and other EU Countries, key New Public Management ideas such as performance indicators and targets are still in place, it therefore could be argued the New Public Management will evolve as appose to become extinct which Jones (2001) suggests as a possible outcome. However there is the argument that the future of New Public Management uncertain, some argue that it is 'dead or dying' (Jones 2001). Hood (1991) states that 'there are plenty of academic precidents in public administration for an analyital perspective to die in in middle age just as it promises to become interesting'. He also stated his belif that NPM would not be around in the next 20 years. However it is important to point out that this was written in 1991 so this source was written 18 years ago, however it should not be discounted purely because of its age and it still could have implications for the future of NPM over the next few years. It certainly not the only source that predicts this fate for New Public Management, Lynns 1998 paper also suggests this. Pollitt also argues that 'that the underpinnings of the NPM's reputation are actually quite fragile' this supports the theory that NPM is not going to continue indefinitely