New Public Management is a management philosophy used by governments since the 1980s to modernise the public sector. New Public management is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. The main hypothesis in the NPM-reform wave is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.
There has been a significant change in the role of government in different societies, during the late 20th Century. The term ‘New Public Management’ was coined by Christopher Hood in 1991. In the same way another contributor is Gerald Caiden. Some notable scholars contributing to NPM are P Hoggett, C. Pollitt, R Rhodes, R. M. Kelly, P. Aucoin and L. Terry. According to Richard Common, NPM is used as acronym (short form) to describe a vast range of contemporary administrative changes. NPM has become a very popular concept.
THE CONCEPT OF NPM/MEANING
The NPM approach has been defined in the early 1980s by Garson and Overman as “an interdisciplinary study of the generic aspects of administration….a blend of the planning, organising and controlling functions of management with the management of human, financial, physical, information and political resources
Contemporary reforms are reorienting governance towards management philosophy. It implies high level of organisational effectiveness. It also relates to the capacity of the centre of power of political and administrative system to cope up with the emerging challenges of the society. It refers to adoption of new values of governance to establish greater efficiency, legitimacy and credibility of the system. In simple terms the NPM can be considered as citizen-friendly, citizen caring and responsive administration.
New Public Management has three constructive legacies for the field of Public Administration -
(a) a stronger emphasis on performance-motivated administration and inclusion in the administration cannon of performance oriented institutional arrangements, structural forms and managerial doctrines fitted to particular contexts;
(b) an international dialogue on and a stronger comparative dimension to the study of state design and administrative reform; and
(c) the integrated use of economic, sociological and other advanced
conceptual models.
NPM is result-oriented and objective focussed. It believes in flexible arrangements in organisation personnel, terms and conditions of employment, and so on. It is prescriptive and descriptive. Its driving mattos are the ‘Three Es’— economy, efficiency and effectiveness. It advocates pruning the public bureaucracy and reduction in the functions of the modern state. It, thus, believes in privatisation.
The NPM aims to achieve a great deal of structural adjustments and a new type of state intervention to seek cooperation and help from community organisations and empowerment of citizens. It attempts to limit the role of the state, including downsizing bureaucracy, devolution of authority, cost-reduction, contracting out some of the operative functions of government, developing and designing result-oriented appraisal system and commercialisation as well as market orientation of the government activities. This is to be supported by effective accountability through open reporting system. The administration has to be moved from rule to result orientation, from system to enterprise, obedience to reward, inaction to action, centralisation to decentralisation and from duties of administrators to the rights of citizens. Broadly the NPM aims at entrepreneurial role of public organisations with a market based public administration resulting in effectiveness and economy in the functioning of public organisations.
Some of important approach are:
1. Downsizing the bureaucracy: Downsizing of the public apparatus and the narrowing down of the number of employees it employs.
2. A process of debureaucratization: Debureaucratization process includes increasing the efficiency of the process and not merely the quantity of output. The properly functioning governmental systems must act in a systemic manners and should therefore start implementing approval of processes.
3. Decentralisation of the decision making: A process of decentralisation transfer of decision making processes closer to the citizens or in the managerial parlance, the clients. The decentralisation process heightens the competitive environment, as it allows employees and managers at all levels more freedom of action, initiative and creativity, gives them authority they never had in the past, and reduces bureaucracy in the sense that the need for numerous approvals for actions comes down.
4. New managerialism: Emphasis on New Managerialism includes the use of processes of business management within governmental branches. It is important to employ managers who have professional-managerial proficiencies and to make sure that their obligation is to the output and performances.
5. Privatisation: Privatisation is almost naturally connected with the NPM, as it hands over managerial responsibility (or sometimes also ownership) from organisations, which have been completely public, to the business bodies, which act within the conditions of competition and free market.
6. Performance evaluation: In order to improve products and services, the public sector organisations must formalise standardization and measuring processes to supervise them in the orderly manner over time and to try and present a continuous and consistent tendency towards improvement.
