Much was made of the ‘New Public Management’ (NPM) model in the 1980s and early 1990s. But has it ever been appropriate for the politicised public sectors of many developing countries? This article for the International Review of Administrative Science argues that NPM has had limited results, particularly in developing countries, where it has rarely been applied. However, it has positively affected debate.
While the NPM model is difficult to define, it indicates a management culture that emphasises the importance of the citizen or customer and accountability for results. It reflects decentralised authority by offering alternative service delivery mechanisms with a market orientation. In practice, this has often led to the creation of semi-autonomous agencies for service delivery operating on contractual arrangements. Its aim is to improve operational efficiency and the responsiveness of bureaucratic agents to political principles. Early proponents suggested it could replace other management strategies for policy implementation. But this has not proved to be the case, especially in developing countries which lack the type of government needed to make NPM work.
Evidence suggests that, contrary to early expectations, little NPM has taken root in developing countries. Hierarchical bureaucracies have not been replaced by chains of inter-linked contracts, although NPM-style reforms have been applied in sectors such as water and health. The main problems are that:
- There is almost no evaluation of NPM outcomes on which to judge its success.
- The analysis that does exist suggests that the impact of NPM is mixed: in some cases, there have been efficiency improvements, but reforms can be costly and even decrease accountability.
- For NPM to function, citizens must have expectations of service quality from government, but in developing countries these are low. Even if the public were to complain, governments are constrained by donor demands.
- Many developing country governments do not have the public service culture – predictable resources and credible staff regulation and policy – required for effective contract-like arrangements.
- NPM has had only a marginal impact in all countries, meaning that in developing countries this may be below a quantifiable level.
- Where governments do not have the incentives or capacity to address poverty and provide better services, NPM is no more able to bring about change than old-style public administration.
Despite its disappointing results, NPM has probably left a helpful legacy. It has added to managerial choices within the public sector. In addition, it has demonstrated that, for public management reforms to work, governments must be capable in terms of basic public sector disciplines and motivated by public expectations. To help achieve these conditions:
- ‘Incapable but motivated governments’ could be subject to more sophisticated mechanisms, such as providing the public with budget information.
- Meaningful indicators of government effectiveness could also be developed to improve the performance of this kind of government.
- With ‘capable but unmotivated governments’, such as in the former Soviet Union, restructuring of monopolistic economic interests is necessary to create public expectations about state-provided services.
- It may be useful to focus on a specific area – delivery of local services, for example – before widening out reforms to the whole public sector.
- ‘Incapable and unmotivated governments’ will require a fresh approach, which could combine strengthening local voices and local government.
