The Politics of Bureaucracy An Introduction To Com... - (10 The Politics of Public Management)

Chapter 10
The Politics of Public

Management
The New Public Management 326

Participatory Government 330
The Second Wave of Managerial Reform 333
Accrual Accounting 340
Strategic Management 341
E-governance 343
The Rest of the World 344
Continuing Reforms 345
Copyright © 2018. Taylor & Francis Group. All rights reserved.
323
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T h e P o l i t i cs o f B u rea u crac y
The bulk of this book has tended to use terms such as “public administration”
and “bureaucracy” to describe what occurs in the public sector as public policies
are implemented, as well as to describe the public employees who perform those
tasks and the structures that they inhabit. To many people in government and in
academia those terms would appear almost hopelessly outdated. “Public manage-
ment” has become the more common phrase in contemporary parlance to describe
this component of the public sector (see O’Toole and Meijer, 2014). The changes
that have occurred within the public sector in most countries are, however, a good
deal more than semantic. The change in terminology implies a substantial trans-
formation in the manner in which the public sector operates, and the way in which
scholars and practitioners have come to think about delivering public services.
While it is difficult to identify exactly when the shift from public administra-
tion to the concept of public management occurred, the phrase “New Public Man-
agement” (NPM) has become central to describing and understanding what has
been happening in government. Christopher Hood (1991) describes this term,
and this practice, as beginning during the 1980s, in part reflecting the large-scale
transformation of the state in most Western countries, motivated by politicians
such as Margaret Thatcher and Ronald Reagan on the political right. The concern
with improving performance in the public sector has not been the sole preserve of
the right, however, and in some cases such as New Zealand it was driven instead
by parties on the political left (Scott et al., 1990) or in Finland by broad “rainbow”
coalitions.
The use of the word “new” does indicate that people had talked about man-
agement in the public sector previously; in particular, several public commissions
in the United States and in Canada had emphasized the need for improving the
quality of management in the public sector (Sutherland and Doern, 1985; Arnold,
1998). Further, to many people performing the tasks of running large public organi-
zations the distinction between public administration and public management was
irrelevant. Both terms meant to them that they had to bring together human, finan-
cial, and legal resources in order to deliver some sort of service to the public. Still,
by the 1980s and 1990s the emphasis on management was becoming dominant,
and “administration” came to be considered an old-fashioned concern with formal
organization and law rather than emphasizing efficiency and performance.
Using the concept of the “New Public Management” to describe what has been
happening in the public sector also implies that there is a single pattern of behavior
that can be described in this manner. In reality, however, a variety of administra-
tive changes have been implemented in the public sector. The dominant pattern of
change in government reflects movements toward a market-based public sector,
and this pattern has become the conventional interpretation of NPM. The market-
based models of NPM assume a generic style of management, with their advocates
considering that running public and private sector organizations are virtually iden-
tical tasks. Further, the model tended to assume that public sector employees were
involved in their organizations primarily for financial reasons rather than for either
a sense of public service or the desire to be involved in a (in some societies at least)
highly prestigious occupation.
Other changes in public management have been motivated more by a par-
ticipatory style of change – “liberation management” in Paul Light’s terminology –
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T h e P o l i t i cs o f P u b l i c M anagement
stressing the importance of involving members of the lower echelons of the public
organizations in decision making within those organizations. This participatory
style also seeks to involve clients and even the general public more directly in the
public sector. Further, other forms of reform in the public sector stress the need to
reduce the level of domination of government by formal rules, and to replace those
formal restraints on managers with greater discretion. That discretion is intended
to enable public managers to exercise their talents and to produce more effective
and efficient public services through management.
All of these reforms of public management have stressed the capacity to
make government perform its fundamental tasks better, and following from the
initial round of change, whether more managerialist or more participatory, has
come an increased emphasis on performance management in the public sector.
Performance management implies the use of formal means for measuring how
well individuals and organizations are doing their jobs (Bouckaert and Peters,
2004). Those measurements are, in turn, to be related to the rewards that the
individuals and organizations receive through the budget process. If, in the words
of the National Performance Review (Gore Commission) in the United States,
government is supposed to “work better and cost less,” then we will have a better
chance of knowing how well it is working and perhaps also know how much it
costs to produce the goods and services that are being generated through the
public sector.
Also, the phrase “New Public Management” implies that there was an old
public management, and indeed there was. This approach to managing in the public
sector is often referred to as “scientific management,” and had its heyday during
the 1930s and 1940s. In the United States the publication of the Brownlow Report
in 1939, with its principles of management derived from scholars such as Gulick
and Urwick (1936). In Britain and other countries analogous academic and official
reports emphasized the existence of principles that could enable the public (or
private) manager to run an organization effectively and efficiently (see Self, 1973).
These principles subsequently were questioned and largely debunked by decision-
making approaches to management (Simon, 1947), but the old public management
did influence behavior in public organizations for decades.
This chapter will discuss the alternative models of administrative reform, and
the role of these reforms in shaping management, within the public sector. This
discussion will reflect two waves of change, as implied above. The first wave imple-
mented changes in the managerial and participatory styles mentioned above, and
produced often quite fundamental changes in governing. Those changes in turn

created a new set of managerial problems for the public sector so that one change
was soon followed by an additional set of changes. The second wave has tended to
focus more on the performance of public organizations, as well as on finding ways
to bring the political leaders who had to some extent been devalued during the
initial changes back into the center of governing.
Although in this chapter I will focus primarily on the way in which public
services are delivered and the way in which people working for government are
hired, fired, and motivated to perform their tasks, it is important to understand that
the New Public Management is more than just a set of ideas about the bureaucracy.
Rather, NPM is also to some extent a set of ideas about how government as a whole
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should operate. These ideas involve transforming how citizens relate to govern-
ment, as well as the ways in which political officials interact with the administrative
personnel of government. Both of these dimensions are especially important for
the management of the public sector in a democracy. Thus, to some extent a theory
of public management is a theory of governance, and directs our attention at the
ways in which altering any one aspect of the public sector may have significant
consequences for the remainder of the system.
The New Public Management
What has come to be known as the New Public Management did not emerge from
any single theory or statement of how to run the public sector better, but rather
emerged from different strands of thinking about governing. What these ideas and
approaches all shared was a sense that something was wrong in government, espe-
cially within the public bureaucracy, and had to be changed. The various scholars
and practical reformers involved in the process differed, however, in what they
considered the root cause of the problems in the public sector and therefore dif-
fered in what the most effective solutions for the problems of the public sector were
likely to be.
Some of the ideas discussed here are identical to those discussed above with
respect to administrative reform. In this chapter, however, we will focus attention
on the impact of these ideas on the manner in which personnel and programs within
the public sector are managed. For example, the emphasis in this chapter will be on
performance management and the manner in which various techniques for meas-
uring and reporting performance can be used to motivate employees and provide
government with guidance for changing its programs. In addition, the managerial-
ism of initial reforms produced the need to find instruments to coordinate public
programs and to make government reform in a more coherent manner.
Markets and managerialism. The dominant approach to reforming public
management has been based on market principles and the ideas of generic manage-
ment. The heartland of this pattern of reform has been the Anglo-American democ-
racies, with New Zealand usually being described as the prime example (Boston,
1996). These ideas have also been adopted with substantial vigor in some of the
Nordic countries, especially Finland (Christensen and Laegreid, 2007). Whereas
public administration had been considered by most people in and out of the public
sector to be something substantially different from business management, the

managerialist strain of thinking about the public sector argues that “management is
management,” although Graham Allison famously argued that “public and private
management were alike in all unimportant respects.” The assumption guiding
generic management is that the same principles that can motivate employees to
do their jobs efficiently in business organizations will also motivate individuals to
do their jobs well in the public sector. This view of management takes the private
sector as the model of good management and seeks to extend the use of those ideas
into government.
In more general terms generic management has argued that government
organizations may not have to provide many of the services that they have in the
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past, and that many of these activities can be provided more efficiently by private
organizations. Some of those private organizations may be for profit and others not-
for-profit, but either can perform better in many situations than can government
organizations. In the now famous words of Osborne and Gaebler (1991) govern-
ments should “steer and not row.” The argument is that government is better at
setting general direction for the society than it is in actually implementing those
ideas and, therefore, privatizing many operations should produce a more effective
government, that delivers services at a lower cost to the taxpayer.
This potential for private involvement may be as true for social policy as well
as the economic activities of government, and social policy delivery now often
involves numerous voluntary organizations. These organizations are often more
effective in delivering social services because they can be less “bureaucratic” than
public organizations. That relative informality is valuable when dealing with clients
on the margins of society who fear formal authority. As immigrants, and many
illegal immigrants, have become an increasingly important component of the social
service population, for example these new clients are generally less threatened by
voluntary or even market-based organizations than they are by purely public sector
service deliverers.
One of the most fundamental principles advocated by the managerialist
approaches to the public sector is “let the managers manage.” The assumption
behind that argument is that if government is able to recruit or retain high-quality
managers, and if those managers are given the latitude to direct operations within
their own organizations, then the public sector will perform better than it would if it
remained dominated by political considerations and traditional bureaucratic admin-
istration. As managerialism has moved on, the emphasis has become “making the
managers manage,” and using a number of instruments to apply pressure on man-
agers to make them and their organizations perform better.
In organizational terms, when government cannot, for whatever reasons (see
Thynne, 2005) transfer the service delivery functions to the private sector the usual
choice proposed by the New Public Management has been to create autonomous
public, or quasi-public, organizations to provide these services (see Bouckaert and
Peters, 2004). As noted in Chapter 4 some countries such as Sweden have used the
model of “agencies” for centuries as a means of delivering public services. These
organizations remain within the public sector but are to some extent independent
of direct ministerial control, and are empowered to make most decisions about
implementing their programs on their own. As well as creating the autonomy for
service delivery this pattern of organizing the public sector also tends to have each
agency providing a single service, in contrast to larger, multi-service departments
that have been typical for most governments. The concentration on the single
service then enables governments to understand better the costs of each service,
and also to determine ways of managing those services better.
As well as being based on the concept of generic management the manage-
rialist strand of thinking within the New Public Management is also based very
clearly on competition as the best means of ensuring higher quality and lower costs
for public services. As I have argued elsewhere (Peters, 2001) the fundamental
diagnosis of what is wrong with government in this approach to the public sector
is that government services have been monopolies, and therefore the service
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roviders have had no incentive to improve their services, and especially no incen-
p
tive to lower their costs (funded through general taxation in most instances). The
obvious solution to the problem of monopoly provision has been to create some
form of competition.
As well as emphasizing competition among organizations, the market
approach to public management also stresses competition among individuals as
a core value in good management. In traditional patterns of personnel manage-
ment in the public sector individuals working for government had no incentive
to perform their tasks in the most efficient and effective manner. Traditional civil
service systems (see above, pp. 00–0) were more concerned with ensuring perma-
nent employment for the staff, and with insulating the civil service from political
influences, than they have been with the actual performance of public tasks. The
basic logic of the civil service system was that so long as an individual performed
at a minimal level then he or she was doing well enough to retain their jobs.
Governments have also demanded that their service organizations, and many
of their internal activities, “market test” their services, and the costs of those serv-
ices, against the options available from the private sector. For example, rather than
necessarily hiring cleaners for public buildings government can put these services
out for competitive bids. For example in the United Kingdom, there was a program
of “compulsory competitive tendering” during the Conservative governments in
the 1980s and 1990s (Shaw et al., 1994). The public sector organizations that had
been supplying those services could bid for this work also, but they would not nec-
essarily win. That practice of requiring bidding lowered some costs, and it also had
the effect of forcing all the elements of the public sector to be much more aware of
their costs, while without such market competition they did not have to think much
about their efficiency. The Blair government replaced that Tory program with one
entitled “Best Value,” that attempted to assess the quality of the services provided
relative to their costs, with an underlying comparison to the private sector (Higgins
et al., 2004).
In addition, if real competition cannot be created for services, then some sur-
rogates for markets must be created. One common strategy has been to create
internal markets and to use contracts to bring together “purchasers” and “provid-
ers” within government itself. For example, in a health service such as the National
Health Service in the United Kingdom (and later in a number of other health care
systems) the purchasers are area health authorities who need to provide services
to their citizens, while the providers are hospitals. The hospitals, instead of simply
working on a budget and providing services to all who appear, must bid on various
parts of the total health service market. As is assumed for real markets that can be
created for services, the assumption of the advocates of internal markets is that
these quasi-markets can enhance the efficiency of services.
Ideas of promoting excellence in public organizations have been associated
with the ideas of market testing and developing greater efficiency in the public
sector. Total Quality Management was introduced in the first Bush administration
in the United States, with similar ideas promoted in the Antipodes, in the United
Kingdom, and then spreading across the remainder of Europe. The pursuit of quality
at the initial stages often focused on the potential competition between public and
private providers. The Conservative governments of Thatcher and Major required
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“compulsory competitive tendering,” and local governments had to accept bids

from the private sector for many of their functions that had been performed by
public servants. Those public employees could also compete for the contracts, and
often were successful, but there had to be competition.
While the ideas of generic management may appear logical at first glance,
there are a number of significant questions about this approach to public manage-
ment. First, we know that especially for people in the higher ranks of government
the evidence (see Chapter 3) is that people do not go to work for government
because of the financial incentives, yet financial incentives are manipulated as the
principal means of motivation within this form of management. Further, although
changes in civil service systems have made the range of possible rewards for indi-
viduals greater, there are still not the possibilities for governments to use extremely
high levels of reward to attract the “best and brightest” when these rewards are
compared to those available in the private sector.
The other problem in personnel management that the generic approach
raises for government is that it tends to devalue the career public service. The idea
of a cadre of public administrators who remain in office while politicians come and
go has been a mainstay of the public sector for some time. These civil servants
were able to ensure some continuity in policy and also had the expertise to help
more amateur politicians make and implement policy. The civil service also has
tended to embody the ideas of service, although the stereotypes often have been
of arrogant and indolent “Sir Humphreys” who serve themselves more than they
serve the public, or their nominal political masters.
As well as the problems involved in motivating and managing public employ-
ees, the generic approach to public management presents some more general
problems for the organization of the public sector. In particular, the emphasis on
privatizing services and downsizing the public service delivery capacity of govern-
ment makes governments dependent on actors beyond their direct control. Thus,
a reform designed to improve the quality of service delivery may, in fact, lead to
poorer, or certainly more variable, services. In some ways variability may be desir-
able, if one believes that citizens should have rights to choose what they receive
from government and how they receive those services. One of the principal justi-
fications of the market model has been that it enhanced the capacity of citizens to
make their own choices about public services, and that this will improve both the
efficiency of government and the involvement of citizens. On the other hand, gov-
ernments also deliver services that citizens may have the right to expect by virtue
of their citizenship and for those services equality should be a real concern.
Further, there are real questions whether contracting improves the quality
of the services being provided. The idea of parceling out a good deal of work in
the public sector to contractors conflicts with another style of contemporary man-
agement – building strong teams within organizations as a means of motivating
workers. Contractors who do not really belong to the larger organizational team
may be less likely to provide the quality services needed. For example, some critics
have argued that the problems of cleanliness that National Health Service hospitals
in Britain have faced are in no small part a function contracting out the work to
firms that are not primarily in the health care sector and who therefore are less
likely to be motivated by the ethos of medical care.
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Advocating contracting and other forms of private sector management also

implies that these instruments are suitable for the socioeconomic and cultural
contexts in which they are being applied. To be able to utilize contracting there
must be firms willing and able to provide the services required, an assumption that
does not appear to be supported in many countries with poorly developed private
sectors. Thus, for many less-developed countries the public sector may continue
to be a source of modernization, unless and until private sector organizations are
better developed and become capable of offering the needed services more effec-
tively. Further, in many societies the private sector may not have the legitimacy of
the public sector in delivering important public services.
Finally, and perhaps most importantly, the demands for accountability and
public service make working in government fundamentally different from working
in the private sector. Indeed, being a manager in the public sector is substantially
more difficult than is managing in the private sector (Allison, 1986), given those
demands and the transparency with which decisions must be made. Working in
government is “managing in a goldfish bowl,” and also implies managing without
the latitude for dealing with personnel and finances that a manager would have in
the private sector. Despite those constraints, managers in the public sector tend to
be paid substantially less than if they worked for a private sector organization and
enjoy substantially less public respect (see Chapter 3).
The dominant emphasis on efficiency in the public sector embedded within
the market approach is manifested in a variety of other ways. One of the more
common of these mechanisms has been developing improved means for delivering
services to the public. For example, “one stop shops” have become common means
for delivering a range of services that once required citizens to go to a number
of different offices, often repeating the same information on numerous forms.
This service delivery improvement has been implemented for the social serv-
ices, enabling citizens to get a range of services from a single office – for example
Centrepoint in Australia (Halligan, 2004). The same method also has been imple-
mented for regulatory policies, enabling businesses to get all the licenses required
for opening with a single stop, or perhaps even a single form.
In summary, the market approach to governing and the use of a concept of
generic management has been the dominant approach to improving public manage-
ment. This approach is based on a number of very fundamental assumptions about
the way in which government works, or can be made to work. These assumptions
have been adopted with substantial conviction by administrative reformers, and to
some extent have been successful in improving the quality of public sector perform-
ance. It would be difficult to argue that government does not work more effectively
in most industrial democracies in 2005 than it did in 1985, or even 1995. But those
improvements in efficiency have been purchased at some cost to other important
values in government, such as accountability and organizational memory.
Participatory Government
The major alternative to the market-based approach to managing the public sector
has been a more participatory concept of governing. Whereas the market-based
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approach assumes that the root of most of the problems in government is the
monopoly that the public sector holds over many goods and services, advocates of
this approach to governing argue that the principal problem is hierarchy. The typical
government organization has been structured as a hierarchy, with the employees at
the bottom having limited control over policy, or even over how they do their jobs.
Likewise, the relationship between governments and their clients has tended to be
hierarchical, especially for clients of social services who are in a dependent rela-
tionship with the public sector and the civil servants administering programs.
The idea of making government more participatory is hardly new. The basic
concept of democracy is that what happens in government should be determined
by the citizens. Further, since at least the 1930s organizational theorists have
been arguing that more involvement by employees will in the end be associated
with greater productivity by the workers (see Roethlisberger and Dickson, 1939;
Argyris, 1964). Involvement gives the employees some stake in the organization,
and also enables them to use some of their own knowledge about the services
being administered and about the clients to make the programs work better. We
have known for some time that street-level bureaucrats are crucial for the success
of social services (Lipsky, 1971; Meyers and Nielsen, 2012) as well as regulatory
(Bardach and Kagan, 1982) programs, but the influence of these workers often
has been considered illegitimate. For the advocates of more participatory govern-
ment this role for the lower echelons of government is now not only legitimate but
crucial.
The role of citizens as direct participants in the process of formulating and
implementing policy has been less legitimated in the literature on public adminis-
tration, especially in Anglo-American democracies. Certainly mechanisms such as
public hearings and public enquiries have existed for some time, and advisory com-
mittees for agencies have been used for decades in a number of countries (Kvavik,
1970; Barker and Peters, 1993). The mechanisms tend to be episodic, and have
their agendas determined by government. The concept of more continuous and
autonomous role for actors in civil society is, however, less familiar. Unlike the
countries of Northern Europe (see Chapter 3) the role of corporatist links between
state and society has never been very strong in the Anglo-American systems, but
the participatory reforms of the past several decades have moved public adminis-
tration in that general direction.
The concepts of empowerment (Welch and Wong, 2001) and citizen engage-
ment (Goetz and Jenkins, 2001) have been at the center of the participatory reforms
of public administration. The idea has been that the clients of public organizations
should be empowered to have a greater influence over those programs. Further,
government should become more open to the full range of social interests and use
networks as mechanisms to legitimate programs, as well as to deliver some pro-
grams. While conventional politics has been open to popular influences primarily
only at the time of elections, with the elected representatives being insulted from
the public between those elections.
It should be obvious that management in the public sector from a partici-
patory perspective will be different from that following an NPM perspective. If
the lower echelons of the public sector are empowered they are able to make
more of their own decisions and, therefore, will not require the level of immediate
331
s upervision that is found in a traditional administrative system. This reduced need

for supervision can reduce the size of the public sector by eliminating a number
of middle-management positions. For example, during the Clinton administration
in the United States the implementation of the National Performance Review led
to a significant reduction in public employment. Similarly, in Canada, the reform
process called PS2000 contained a very strong participatory element and tended to
shift power and resources to lower-level civil servants.
As well as flattening public organizations management using participatory
ideas enables the lower echelons of the organization to have greater influence over
policy. Again, in the United States the idea of “reinvention” was a means for the entire
organization to consider the programs being administered and the ways in which
they could perform their tasks more efficiently and effectively. While still bound by
legal sanctions many organizations were able to redesign their programs and find
innovative means of achieving public goals. These ideas again are not entirely novel,
with ideas such as quality circles having been used in government for some time.
What has been different, however, is the extent to which public employees at all
levels are becoming involved in managing their own organizations.
Whereas in the market model citizens were able to have some policy choice
individually by using vouchers or other market mechanisms they are able to influ-
ence policy by more collective and political means when there are participatory
changes in government. In particular, participatory governments involve citizens
and organized social groups in shaping the administration of policies, and often the
basic policies themselves. For example, in the Scandinavian countries education,
housing, and other social services are often managed by the clients of the pro-
grams themselves. Schools are managed by committees of parents and teachers,
within the regulations established by educational authorities. Likewise, the man-
agement of social housing projects can be heavily influenced by the clients (Sören-
son, 1997).
Even when not concerned with the management of individual facilities,
management in the participatory model of public management has involved more
chances for the public to influence decisions and to shape the direction of public
policy. The fora created for participation, e.g., public hearings, and the ability of
administrators to determine the agenda and scope of participation may be criticized
as not being authentic forms of public involvement, but in most cases these have
been sincere efforts to enhance the role of the public in shaping administration.
Further, the creation of more participatory instruments on the output side of the
public sector has added greatly to the capacity of the public to hold organizations
directly accountable (see below).
The participatory approach to governing is generally conceived as being
more democratic, given that citizens have a continuing opportunity to influence
government. While those opportunities for participation are important for the
participants, they may produce local democracy but also undermine some other
aspects of democratic control over policy. For example, the individuals and groups
concerned with a policy may be able to influence it for their own benefit, but that
may cost taxpayers more money, or may undermine equality across the political
system. Again, ensuring that democracy is coupled with responsibility is the con-
tinuing challenge for contemporary government.
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The Second Wave of Managerial Reform
The first wave of reform – meaning that associated with the New Public Manage-
ment – was directed at increasing the efficiency of government in many adminis-
trative systems, and also toward enhancing the capacity of citizens and employees
to influence government. While these were certainly important improvements in
administration, they were purchased at some cost to other important values in gov-
erning. Further, the initial changes in administration generated the capacity for
additional change. The traditional system of hierarchical government was effective
for some years, but the adoption of many of the ideas of the New Public Manage-
ment have led governments to rethink how they can best organize the public sector
and motivate the people who work there.
If the first wave of managerial reform was designed to let the managers
manage, at least one dimension of the emphasis on the second wave has been on
making the managers manage. That is, while the first wave tended to assume that
managers wanted to make their organizations be more effective, whether for per-
sonal gain from their own contracts or simply because they were committed to
doing the job well, the emphasis on performance in the second round of reforms
has placed increased pressures on managers – and the other members of organi-
zations – to perform well and to produce high-quality public services at a good
“price.”
As well as making the managers manage, the second wave of reform has
tended to emphasize the need to manage together. That is, while the first wave was
successful in improving management within individual organizations reforms in
the subsequent wave were faced with the problem of numerous successful organi-
zations that did not cooperate adequately to govern the society in a more coherent
and coordinated manner. The first wave had succeeded in fragmenting government
even further than it had been, so there was a need to put it back together.
Performance management. The first round of reforms focused on enhanc-
ing quality in government, but did so primarily through promoting competition, or
empowering managers and letting them manage their organizations. As govern-
ments became increasingly concerned with quality, and the ability of the public
sector to deliver its services in both an efficient and more humane manner, the
natural question became: How do we know that government is performing better?
Therefore, to be effective as a means of improving services in the public sector,
performance management must develop the means for measuring adequately the
amount and quality of services that are delivered (see De Bruijn, 2002). Further, in
a participatory political environment, measuring performance involves understand-
ing the level of public satisfaction with services as well as the objective quality of
the services. Experts may agree that a program is performing well, but if citizens
do not believe so, then it is difficult to argue that the program is doing what it
should.
A shift to performance management was a shift from “Let the managers
manage” to “Make the managers manage.” While much of the first round of reform
was concerned with managerial freedom the subsequent round has emphasized
new forms of constraint, although the constraints are now ex post rather than ex ante.
That is, the principal concern for controlling managers is how well they produce
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outputs and outcomes expected from their programs, not how much money did
they spend or how many personnel hours were absorbed. Performance is a differ-
ent type of constraint, but it does place pressure on managers to produce and to
justify what they are doing.
A concern with measuring performance and measuring the outputs of govern-
ment is hardly novel. For example, during the 1960s the implementation of program
budgeting (Novick, 1967) and the development of policy evaluation (Freeman et al.,
2004) both produced a need for more objective measures of government output
and the desire to assess the quality of public programs. Important analytic steps
were made at that time in the development of indicators of programs and their
performance, and at least some governments invested heavily in policy analysis.
For example, most of the social programs adopted as a part of the Great Society
in the United States mandated spending at least 10 percent of the total budget for
evaluation, and the Dutch government created the Netherlands Scientific Council
on Scientific Government. Also, during this period many government accounting
offices changed from being simply financial auditors to being more policy analytic
and advising government on how best to spend its funds not just on the legality of
those expenditures (Leeuw et al., 1994).
As important as those earlier achievements in assessing policy perform-
ance were, they were limited in comparison to the more recent developments in
performance management. The more contemporary approaches use a variety of
means for establishing measures of performance, and devising standards for ade-
quate performance. They then attempt to relate those measures to the budgets of
the organizations in question, and to use these measures as an alternative form of
accountability for the organizations. Rather than focusing on the exceptional errors
that any individual or organization can make, and using those errors to score politi-
cal points, there has been some shift toward assessing how well organizations are
performing on an average basis.
The emphasis on performance management has also extended beyond organ-
izations, and is used very extensively now to assess the performance of individuals
working in the public sector. As noted already, the first rounds of change in the
public sector attacked the dominance of civil service systems and their assumptions
of tenure in office for adequate performance, as well as their uniformity of rewards
within single grades of the personnel system. Uniformity and the permanence of
the staff have been replaced with attempts to measure individual performance and
to punish and reward individuals differentially, depending upon their contributions
to the success of the organization.

Part of the problem in measuring both individual and organizational perform-
ance is that it is difficult to establish the connection between what individuals do in
their organizations and the actual performance of their agencies. A good manager,
or a good employee at the very bottom of the organization, may do their job well,
but that may be incapable of overcoming faulty program design, or the poor per-
formance of other key actors. Likewise, poor performance by one or more poor
actors may be compensated by the quality of the rest of the organization. There-
fore, any simple assumptions about performance must be examined carefully.
Again, performance management is hardly a new mechanism for manage-
ment in the public sector, as governments began limited efforts at differential
334
rewards, especially for senior officials, during the 1970s. Interestingly, govern-
ments have begun with the top of the organizations, rather than with the bottom.
While the workers such as clerks or secretaries performing relatively standardized
jobs might appear to be a more appropriate place to begin this program, the very
top of the civil service – with jobs such as policy advice – was chosen. This reflected
in part the need to have this level of the organization committed to the process
before lower echelons could be brought into performance management.
One of the most important instruments used for the performance manage-
ment of individuals are performance contracts (Heinrich and Choi, 2007). When a
manager, for example, assumes responsibility for a program he or she will negoti-
ate a contract with the superiors specifying objective goals to be achieved within a
year or some other time period. At the end of that period the individual is rated on
how well those goals were reached, and rewarded or perhaps terminated. In this
contracting arrangement the individual involved has some control over the levels
of achievement to be demanded, and negotiations are used not only to establish
goals but also as a means of better understanding the organization and its collec-
tive goals. The contract may also go beyond specific policy objectives to specify
changes in the management style implemented within the organization.
To make performance management more than a hollow exercise in measure-
ment and rhetoric, some consequences must be attached to poor performance,
and some rewards attached to good performance. For individual-level performance
those consequences can be rather clear – and can range from firing or demotion
at one end, to promotions and large financial rewards at the other. This approach
to differential rewards for public employees goes against the long-established
patterns of uniformity and equality among public employees, but has become an
increasingly common way of rewarding and disciplining those employees, and
interestingly has become accepted even in countries such as Sweden and Norway
that have strongly egalitarian cultures.
Although the basic idea of performance management and differential rewards
and punishments for individual employees has become widely accepted, there are
a number of alternative approaches to distributing those rewards. The fundamen-
tal difference is between systems that provide one-time bonuses and those that
change the base pay levels of individuals for a more extended period of time. On the
one hand, governments can make a sum of money available each year that can be
distributed among individuals who are rated as having performed particularly well
during the preceding year. This recognizes performance during the year, but does
not create long-term obligations to pay the individual more. On the other hand,
focusing on less dramatic contributions on a year-to-year basis by employees may
build higher average performance in the organization.
One of the interesting, and seemingly perverse, characteristics of pay-for-
performance systems is that they tend to be implemented more frequently for
higher-level officials than for the lower echelons of government. At first glance one
might think that the opposite would be true. The work of senior public officials –
advising political leaders, managing large and often complex organizations, and
dealing with other organizations and with interest groups – is relatively difficult
to measure objectively. On the other hand, the work of lower-level employees is
often repetitive and substantially easier to measure. Some of the difference in the
335
treatment of these two groups of employees arises from their employment con-
ditions with senior officials more commonly now on short-term contracts while
lower-echelon employees remain in civil services systems, and additionally often
have union protections.
Other means also are used to measure individual performance in public
organizations. For example, some organizations employ so-called “360” evalua-
tions. in which the individual in question is rated by people above, below, and on the
same level. How well does this individual perform in working with peers, with sub-
ordinates, and with superiors? This can be a rational tool to determine rewards and
retention, but it also can be a useful tool for the individual being rated to improve
his or her performance. On the other hand, this methodology is very subjective
and relies on the willingness of the participants to make often difficult judgments
of coworkers. At the top of the civil service, where there are rather few employees
who will often have to work with each other for years, making those judgments
and reporting them can actually jeopardize performance rather than enhance it.
Further, subordinates – despite attempts to ensure anonymity – may not feel suf-
ficiently secure to make negative statements about their superiors.
Although performance management of individuals has obvious benefits for
the public sector, there are also a number of questions that must be considered when
evaluating the overall consequences of this change. One is the obvious measure-
ment question raised above, especially when performance management is applied
to top-level officials. How can the evaluators know that he or she is really doing a
good job? Other employees in the organization may not like them very much, but
is that a sign of strong leadership, or is it a fundamental flaw in their performance?
Also, what role will politics play in the assessment of top public officials who must
work on a regular basis with ministers and political appointees? Will those officials
be judged on the basis of political compatibility or on the basis of their capacity to
perform their jobs?
One of the most vexing problems in the use of performance management is
relating individual performance to organizational performance. If an organization
performs well, how much of that good performance is a function of the work of
the leadership? Or to what extent is the positive outcome more a function of the
performance of the rank-and-file members of the organization? There are cases
in which organizations that perform well do so despite their management, and
others that even extremely skilled leaders would have a difficult time making work
well. And even below the top of the organization to what extent should individual
employees be rewarded for collective performance as well as individual perform-

ance? There may be no right or wrong answers that can hold for all organizations to
questions like these. For example, if one of the principal challenges to an organiza-
tion is building some sense of common destiny and unity, then it may be appropri-
ate to provide more collective rewards. On the other hand, if managers perceive
there is a great deal of variance in performance within the organization it may be
more appropriate to focus on differential rewards to individuals based on their own
performance.
Organizational performance. The individual level of performance is cer-
tainly important for managing within organizations, but the organizational level may
be more important for citizens. First, organizational performance affects citizens as
336
taxpayers, given that the more efficient public organizations are, the less money
they will require to produce the same services, or conversely the more services
they can produce with the same amount of money. Next, as the recipients of serv-
ices, citizens should be better off if the quality of those services is higher. Further,
citizens should be better satisfied with government and individual organizations if
those services are more efficient and effective.
Following from the above, the organizational level of performance has at least
three dimensions that should be considered by managers and analysts: efficiency,
service quality, and citizen satisfaction (see Bouckaert, 2000). The problem for man-
agers and for government more generally is that these three dimensions may not
vary together, and in fact often will not. In particular, for many social services in par-
ticular, the more efficient a service is, the less likely citizens (at least the clients of the
program) are to be satisfied with that service. Citizens may want personal attention
and not to be treated as just another client, and that sort of service requires more per-
sonnel and more money. Likewise, although experts may identify aspects of service
quality they consider important citizens may have very different ideas and, therefore,
improved professional service quality may not equal improved citizen satisfaction.
While it is difficult to deny that organizational performance is important for
government, it is more difficult to measure and to incorporate into the routines of
policy making. Measuring efficiency is perhaps the most difficult challenge to gov-
ernment, given that to be able to capture the concept of efficiency managers need
to be able to measure outputs rather directly, and in terms of dollars and cents,
and then relate those to the inputs of money, personnel, and equipment. Although
that level of measurement would be nice to achieve, in reality few public programs
can be measured so clearly and unequivocally. How, for example, do we measure
the value the outputs of defense programs, or economic regulation? Given those
constraints, governments typically must employ approximations of efficiency and
quality as guides for action.
One of the more common forms of approximating efficiency and quality meas-
urement in government is to benchmark those services. At its simplest benchmark-
ing involves measuring performance of a public organization directly against the
performance of other public organizations or programs that are considered compa-
rable. In the first instance, a list of comparable organizations has to be established,
and then a set of variables that can be used to assess performance can be utilized
by the evaluators to determine how well the organization in question is performing
its tasks. This comparison can be done at the level of individual organizations –
hospitals, schools, universities – or it can be done more broadly for types of public
organizations.
This use of comparability is a useful substitute for the absence of clear abso-
lute standards for most public services. We might want all students to be success-
ful, and we certainly want no one to die while in the hospital, but in reality those
absolute standards are difficult if not impossible to obtain. So long as the compari-
sons are made carefully, and with some consideration of the inherent difficulties
of comparing different organizational, or even national settings, then some assess-
ment of the performance of a school or a hospital can be made. The assessments
become more difficult, however, when less tangible services of government, such
as regulation or even defense, are considered.
337
There are also other mechanisms for benchmarking organizations. For

example, instruments such as the “balanced scorecard” have been developed as
methodologies that can be used in a variety of organizations to assess their per-
formance, and the performance of their management. In addition to the “balanced
scorecard” ISO 9000 has been developed as a means of assessing the performance
of organizations. This methodology, like most performance management mecha-
nisms, has its roots in the private sector, and the private sector bias is perhaps more
evident here than for the others.
As performance management has become more sophisticated in the public
sector, additional ideas for measurement have been added to the simpler attempts
to measure the performance of organizations. One of these ideas has been “value
added,” or a systematic attempt to identify not just the performance of the organiza-
tion on some absolute or relative scale, but also to judge what the organization actu-
ally contributed to that observed performance. For example, in education, it is well
established that the children of better-educated parents will do better in school, on
average, than do children of less well-educated parents. Therefore, a school in a
middle-class neighborhood should get no particular credit if its students perform
better. Rather, government should attempt to measure the actual contribution of
the school to that performance.
Assessing performance is difficult enough in any form, but the concept of
value-added places an additional burden on the measurement capacity of govern-
ment organizations. What would the performance had been had the public organi-
zation not been as good, or as bad, as it is? For education we may be able to predict
performance on the basis of parental education, or other individual or community
attributes, but for many other areas of government that capacity for identifying the
sources of performance are not as readily identifiable. For example, social welfare
programs do not have anywhere as much of a predictive capacity for success or
failure, but a manager will still want to know how well the individual program was
performing.
In addition to organizational measures of performance that attempt to
assess the quantity and quality of outputs by the programs, another approach to
coping with performance management is to focus on the evaluation of the clients
of a program, or the public as a whole. This approach is democratic and based on
market-based ideas such as “serving the customer” but also poses some real prob-
lems for government. For example, who are the relevant clients? This may be clear
for education or for health, but some programs such as tax collection or prisons
present more interesting problems.

At the level of the individual service facility, benchmarking through “league
tables” can be used to provide consumers of those services some guide about the
quality of the services they are receiving. These league tables rate all similar facili-
ties in an area, and are widely distributed to the public, generally by being pub-
lished in newspapers. This process of “naming and shaming” is intended not only
to be a means of identifying well-performing and poorly performing organizations,
but also as a means of producing action for change. The assumption is that citi-
zens will see how good or poor their children’s school is, or what their chances of
dying in their local hospital is after different types of surgeries. The assumption is
that making this information available to the “customers” of public programs will
338
produce political mobilization that will in the end improve the quality of the serv-
ices provided. That assumption may be valid for middle-class citizens but may be
less viable for the less-affluent and less-educated citizens who may be most in the
need of improved services.
While benchmarking and league tables are useful approaches to the problem
of operationalizing the performance of public organizations, they also have several
weaknesses. The most important of these weaknesses is that it assumes that the
benchmarked organizations have the same conditions of production as do the ones
to which they are being compared. So, for example, if a school is not performing
well, is this a function of the absence of parental support, poor initial preparation
of the students, or is it indeed a failure on the part of teachers and administrators?
Given the interaction of social and economic variables with the policy decisions
of government the validity of benchmarks and league tables must be questioned
unless careful analysis is available.
A second level of coping with the question of organizational performance is
to develop a set of indicators that can assess the performance of those organiza-
tions and use those indicators to determine on a more absolute basis how well
organizations are performing their tasks (Erkkilä et al., 2016). In many cases the
standards that are established in this type of exercise are arbitrary. For example,
any tax program may have an optimal level of evasion possible for taxpayers –
there is a point after which it costs more money to detect evasion than can be
recovered from the taxes that are lost to government. In the best of all worlds
the performance indicator would be to reach that optimal level of performance,
but since that level is generally unknown, simple surrogate measures have to be
developed.
Choosing indicators for the performance of a public sector program may be
arbitrary, and it is also often a negotiated process between the control organiza-
tion and the organization responsible for delivering a service. Few central agen-
cies responsible for implementing performance management programs want to
impose measurements on public organizations without some involvement from
those organizations. The control agencies in the center of government may have
their own ideas about what the appropriate indicators are for the programs, but
unless those indicators are “owned” by the functional programs their legitimacy
will be limited, and the impacts on performance will also be limited. Without that
legitimacy any system of performance management is likely to remain politically
contested by the involved organizations, rather than a means of moving manage-
ment and service delivery ahead.

The process for choosing indicators to implement the Government Perform-
ance and Results Act of 1993 (GPRA) in the United States is an important example
of how to select the necessary indicators for a performance management system.
Each of the organizations in the federal government was required to propose a set
of indicators and a suitable initial level of performance. The US General Account-
ability Office, an organization serving Congress (see Chapter 5), was then charged
with examining those proposed indicators and negotiating with the agency (and
to some extent with the Office of Management and Budget) to produce a final list
that would serve as the basis for assessing performance. Although the USGAO did
not accept many of the first drafts of performance indicators, the opportunity to
339
produce a list in cooperation with the agencies generated wider acceptance of the
process (Radin, 1998, 2006).
The GPRA experience, like most other examples of using performance indi-
cators, has tended to produce increasingly high levels of performance required to
be considered satisfactory. If, for example, the Social Security Administration had
as one of its indicators to reduce the error rate in Supplemental Security Income
payments to 10 percent in one year, then they would probably be expected to reduce
it to 8 percent the following year (see USGAO, 2010). When challenged about the
seemingly low initial requirements for organizations in his performance system,
the then director of quality programs in the Hong Kong government noted that
this was a conscious strategy. The initial standards were sufficiently low that no
organization could refuse to participate in the program, and once they were in the
standards could be raised unremittingly year after year.
The education program entitled “No Child Left Behind” in the United States
(McDonnell, 2005) adopts a more individualistic perspective on the fundamental
process of identifying failing organizations in the public sector. This program of
the Bush (Junior) administration is a federal intervention in public education that
identifies failing schools, based on the performance of individual students in those
schools. If a school fails to meet national standards in reading and mathematics
student scores for two consecutive years the parents are permitted to remove their
children and to place them in other schools in the district, or perhaps move the chil-
dren to other districts with financial support from the school district. This program
can be seen as a first step toward providing school vouchers to parents, but also
places pressure on schools and school districts to improve their performance. Like
all programs of this sort, however, there has been a notable effort for schools to
“teach to the test,” rather than to teach more fundamental content. In particular,
critics argue that programs based on standardized tests seriously undervalue skills
such as problem solving and writing. In part for these reasons the Obama adminis-
tration modified this program extensively, albeit maintaining the general commit-
ment to performance.
Accrual Accounting
Another of the important second wave reforms in the public sector has been the shift
toward accrual accounting and to some extent accrual budgeting. While account-
ing practices may appear to be an arcane subject that would only tally the results of
performance, rather than have any real impact on how well government performs
its tasks, in reality the manner of accounting can have a major impact (Chan, 2002).
The typical means of accounting in the public sector has been on a cash basis, so
that money is counted as it comes in through taxes and fees, or is spent on the
range of programs that governments deliver to the public. That method of account-
ing may have been viable when government was providing a limited range of serv-
ices and had few complex financial relationships to the private sector.
As government has become more complex, provides a much wider range of
services, and has more of an impact on the economy as a whole, effective public
management involves a better understanding of public finances. Accrual accounting
340
has been introduced into a number of governments, including longer-range commit-

ments and sources of income in public sector accounts. For example, governments
have a number of liabilities that extend far into the future – interest on debts, pension
obligations, maintenance of public building – and also have capital assets that have
an extended life and value (Chan, 2003). Therefore, to understand the nature of the
public sector, it is argued, these longer-term commitments and assets need to be
included in the balance sheet, just as would be expected of a corporation. This is in
marked contrast to the traditional government budgeting that focused on the annual
budget, and only to a limited degree on the capital budget.
While the changes in government accounting appear to make a good deal of
sense and should enable government to make better financial decisions, there are
also some problems in shifting to a mode of reckoning public money that is based
so much on a private sector model. First, the management and policy implica-
tions of some accounting categories may not be the same in the public and private
sectors. For example, public debt and private debt may not be the equivalent. Even
though public debt has to be serviced, i.e., interest must be paid to bond holders,
there may never be a real day of reckoning as there is for private firms, especially
for large countries with viable economies. On the other hand, although some long-
term implications of assets and liabilities may not be the same, governments tend
to operate more on an annual basis than do many firms. This concern with the
annual budget is less for financial management than for accountability reasons, so
that any system of public accounts must be able to blend those two demands for
management in government. Further, the directions of government may change
more rapidly than do those of a firm, so that the longer-term dimension of accrual
accounting may not be as meaningful.
Strategic Management
The reforms of the public sector discussed in Chapter 9 have had a number of impacts,
both positive and negative, on the public sector. One of the more important negative
consequences has been the fragmentation of the public sector and consequent diffi-
culties in coordination (Bouckaert et al., 2009). Governments have adopted a number
of programs that are attempting to remedy the coordination problem, and some have
become rather successful in balancing the demands of decentralized implementa-
tion with the need for central steering and control (see Peters, 2004a). In particular,
presidents and prime ministers have been developing enhanced capacity to generate
coherence among programs and organizations in the public sector.
Although achieving greater coordination certainly would be a positive
outcome for governments, it is often merely a reaction to problems that already
have been created. In addition, coordination often is achieved through the lowest
common denominator, so that the coordination that is achieved among programs
is simply through avoiding conflicts with one another, rather than creating more
positive cooperation among those programs. The real need for governments, and
especially for the top leadership in governments, is to move beyond simple nega-
tive forms of coordination to more prospective forms of collaboration, and a stra
tegic sense of policy choices that must be made.
341
Given the necessity of moving government forward with a strategic sense

of its future policy needs and opportunities, and changing capacity of the public
sector, a stronger sense of strategic management has been identified by many
governments as a necessity development (see Ferlie, 2004). Although now it often
is considered desirable, the search for greater strategic management capacity in
government often contradicts the pattern of reform that had been implemented
during the past several decades. In particular, the search for strategic management
appears to require some return to centralization, and an increasing capacity for the
central decision makers (presidents and prime ministers) to provide direction to
the machinery of government as a collective enterprise.
As management reforms of the past few decades now move toward greater
concern with strategy and fundamental policy choices, the extolling of the central
role of manager, and with that the denigration of politicians, must be reversed.
Managers and the reforms of the late twentieth century did indeed enhance the
capacity of programs and organizations in government to deliver their services to
clients more efficiently and more effectively. But that enhanced performance was
bought by reducing the role of central policy direction and coherence. Politicians
in democratic systems sensed the need to reimpose the democratic legitimacy over
policy, and governance more generally. Further, politicians have a special role in
the need to develop broader strategic concerns about the future of policy.
To be successful, strategic management will have to progress beyond the
institutional conflicts between politicians and bureaucrats and develop mechanisms
for integrating the needs and skills of the two groups. In particular, strategic effec-
tive management involves linking the broad system goals that may be developed
from the center of government to the more specific goals of the individual agencies.
One interesting example or moving toward strategic management is New Zealand
that, early in its extensive administrative reforms, developed a issues management
system that required the identification of “key results areas” and “strategic results
areas.” The former were at the level of the department or program, while the latter
were at a broader, even government-wide level. For example, the government’s
policy for sustainable development is stated as a system-wide goal, but most of the
departments in government have some relationship to making the policy success-
ful (see Bianchi and Peters, 2016).
The Finnish government has continued its active reform policy also with a
form of strategic management and integration of programs. In the early twenty-first
century the Finnish government adopted a system of “program management” in
which each incoming government must identify as a part of its coalition agreement
four or five key programs that they will pursue during their time in office. For
example, the government that came to office in 2004 decided to focus its atten-
tion on employment, entrepreneurship, citizen participation, and the information
society. These four programs cut across most of the existing departments in gov-
ernment, and required those existing departments to identify what they could con-
tribute to the success of those cross-cutting programs (see Peters, 2004a). Although
the political government had identified these systemic goals, they have still had to
overcome the commitment of individual ministers and their civil servants to the
particular programs of the individual departments, a typical problem of any move
toward greater coordination.
342
Although advocating strategic management in the public sector appears to

make good sense as a means of coping with the demands of governing, this style of
governance also places substantial demands on the public sector. Governments in
the industrialized democracies may have the analytic capacity to be able to perform
this type of analysis, and to be able to plan in an environment that is relatively pre-
dictable. For the less-developed countries, the need for making strategic choices
may be even more pressing. These governments have the need to make difficult
choices about allocating extremely scarce resources among a huge number of com-
peting demands, but may not have either the analytic capacity or the stable environ-
ment that could facilitate making those decisions.
E-governance
Finally, management in the public sector is being altered, and may be altered even
more fundamentally in the future, by information and communications technology
(ICT). As was true for several of the other management changes in government the
use of technology has been increasing for decades, but the pace of change has been
accelerating over the past several decades. These changes are usually referred to
as “e-government,” although that one term contains a range of different formats for
using the available technology. Most of the changes brought about by ICT affect
the manner in which government and society interact with one another, although
some aspects of technology also impact on the internal management of the public
sector.
A wide range of relationships between government and society are being
affected by the introduction of ICT. On the one hand citizens now have means of
contacting officials (both political and administrative). On the other hand, informa-
tion technology can also be important in service delivery, and in enabling citizens
to manage much of their own policy needs, reducing thereby administrative costs
(and public sector employment). Both of these uses of technology are likely to
improve citizen satisfaction with government as well as enhancing the actual per-
formance of these tasks.
When electronic means are used to enhance service provision in the public
sector, one of the most important elements has been the capacity of citizens to
perform many tasks for themselves. For example, completing many routine forms
that might have required a clerk in an office to take the information now can be
done online. This ability to use electronic means of dealing with government pro-
cedures not only would save money for government but it also allows those forms
to be filed any time of the day or night. Citizens can also file their taxes online,
and that capacity may make the actual process of paying taxes, not the transfer of
money, more palatable.
One of the important uses for information technology and e-government
is reducing the level of corruption in government. Among its many other virtues
e-governance improves the transparency of the operations of government, and this
simple access of the public to many internal operations of government may make
it more difficult for civil servants or politicians to engage in corrupt activity. For
example, in both South Korea and Romania (both countries with a substantial histories
343
of political corruption) the public procurement system has been put online. With
this electronic system both ordinary citizens and all the firms bidding for contracts
can see what the tenders actually were. This visibility of the bids makes it more
difficult to award contracts on a preferential basis such as family or political connec-
tions. Indeed, one of the most general benefits of e-government is the capacity to
make the public sector more transparent so that citizens can observe what govern-
ment is doing and hold it more accountable.
The Rest of the World
I have been discussing managerialism in the public sector primarily in the context
of the affluent, democratic countries of Europe, North America, and the Antipodes.
There are as indicated here and in earlier chapters substantial differences among
these countries in the ways in which they have interpreted and implemented the
“New Public Management.” Those differences are important, but compared to
the implementation of these ideas in much of the rest of the world, and indeed the
opportunity to attempt to implement them the differences may actually be rather
slight. Again, however, I should not attempt to lump the remainder of the world into
a single box either, and there are important differences in the extent to which public
management has been accepted and been successful outside the OECD “Club.”
Assuming the less-affluent countries wanted to implement any or all of the
versions of New Public Management mentioned above, they would face a number
of important constraints. The most important of those constraints would be the
absence of a strong private sector – either for profit or not for profit – that could
supplement the work of the public sector. Both the market model and the more par-
ticipatory versions of public management discussed above rely upon actors outside
the public sector for their success. If there are no firms prepared to do the “rowing”
for government then governments will have to do it themselves, and indeed in many
less-developed societies the public sector may be more capable than the private
sector of performing the tasks. Likewise, the absence of a strong civil society will
make the development of a more participatory approach less viable.
The additional problem for many of the less-developed countries is that if they
were to move toward a more managerial form of administration their links with their
societies will not support efficiency but rather may undermine it. Clientelism and
neo-patrimonialism (Kobayashi, 2006) are common features of the public sector in
many less-developed governments so attempts to involve society will tend only to

reinforce the dysfunctions associated with those patterns rather than promoting
good governance. Likewise, any attempt at deregulating government internally by
permitting greater freedom in personnel or procurement policies would merely
be a recipe for reinforcing and funding that clientelism. Of course, we also need to
remember that in context these patterns of links between State and society may be
considered as functional, or more functional, as managerialism or even traditional
Weberian administration.
In addition to the problems that may exist in the private sectors in many less-
developed countries, the public sectors may have problems of their own. Managing
in the style advocated in the New Public Management requires a range of skills that
344
are not often found in traditional public administrators. Many of the less-developed
countries have maintained the highly legalistic administrative styles they inher-
ited from their former colonial rulers, and have used that formality as a means of
maintaining power, as well as means of appearing to conform to the values of good
administration. While again, when seen from the perspective of outsiders, the for-
malism of administration can be a barrier to good governing, it does use the com-
petencies available in the civil service and it may be able to provide for legalistic if
not highly innovative implementation of programs.
Enumerating these problems, however, should not be taken to minimize
the capabilities of many public sector actors in less-developed countries. We have
already noted (Chapter 2) that public evaluations of the performance of the bureauc-
racy in these countries is not as bad as journalistic accounts, or accounts from
many international organizations, might have one believe. Indeed, given their con-
tacts with the donor community and the continuing pressures for modernization
and for reducing corruption these organizations may be among the most efficient
in the underdeveloped countries. Further, given some of the pitfalls of manageri-
alism already discussed it may be desirable for these administrative systems to
continue to build rather old-fashioned bureaucracies and then move toward New
Public Management.
Continuing Reforms
The continuing patterns of reform in the public sector, and the increasing emphasis
on effective management in government, have fundamentally altered the nature of
governing in most industrialized societies. The formal, rational–legal bureaucratic
system that was the basis administration in the public sector has been replaced
by management systems that in many cases resemble management in the private
sector. In other cases the principal emphasis in managerial change has been on
democratizing the administrative system and encouraging change through the
involvement of citizens and clients, as well as the lower-level employees of the
organizations.
Those initial changes in the public sector produced the need for subsequent
rounds of managerial change in the public sector, especially an increased emphasis
on performance. Some of the concern with performance began contemporaneously
with the market and participatory approaches to managing in the public sector,
and the market model indeed implies a concern with “serving the customer.” That
initial emphasis on improving service provision led rather naturally to the stronger
emphasis on performance now found in many governments. This emphasis on per-
formance is found now in many governments in less-developed governments as
well as in the more affluent democratic systems (Bresser Pereira, 2004). While the
less-affluent systems can have lower expectations about the performance of their
governments, they can still use these techniques to improve the services being
delivered.
In addition to the emphasis on performance in the public sector there is an
increasing emphasis on the capacity of government to act in a more coordinated
and strategic manner. Achieving coherence and coordination is important, and has
345
been one of the perennial concerns in public management (see Seidman, 1998;
Christensen et al., 2007), but it is may be only a preliminary step toward moving
government to a more strategic sense of its tasks. That is, the public sector has
returned to being concerned with establishing priorities at the center and then
using those priorities to guide the behavior of the organizations within the public
sector. For public management to achieve its promise for enhancing the govern-
ance of societies it will have to enable governments to do more than react to prob-
lems. The need therefore is to make government more of a strategic actor that can
identify its major goals and align actions across the range of public organizations to
achieve those ends.
As important as these changes have been, and continue to be, in government,
they are almost certainly not the end of reform and the enhancement of the mana-
gerialism of organizations in the public sector. Governments do now perform more
efficiently than in the past, but there are still efficiency gains possible, perhaps
most importantly through information technology. The rather brief discussion
of e-governance above represents what may be the tip of an iceberg for means
of enhancing the efficiency and responsibility of government through electronic
means. Further, the emphasis on efficiency that has been dominant in most gov-
ernments for the past several decades will have to be supplemented with increased
concerns about democracy and participation, and the capacity of public administra-
tion to be a principal locus for democratic action.
The other question that must be raised about the reforms of the public sector
is the extent to which there is some virtue in returning to the rational-level form of
bureaucracy. This is especially true for the less-developed countries, and for coun-
tries emerging from decades of control by hegemonic political parties, e.g., the
former communist systems. Many of the international donors continue to push the
managerialist agenda in these countries and want an immediate adoption of the
market-based style of management discussed above. The absence of an institution-
alized civil service system and the values of service and probity that go with a well-
functioning civil service, however, continue to pose a significant challenge to good
governance in those societies that have not had the opportunity to create values of
neutrality and personal accountability among their public employees.
346

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Chapter 10

The Politics of Public

The New Public Management 326

produced often quite fundamental changes in governing. Those changes in turn

The New Public Management

sector to be something substantially different from business management, the

“compulsory competitive tendering,” and local governments had to accept bids

Advocating contracting and other forms of private sector management also

s upervision that is found in a traditional administrative system. This reduced need

The Second Wave of Managerial Reform

to the success of the organization.

employees be rewarded for collective performance as well as individual perform-

There are also other mechanisms for benchmarking organizations. For

present more interesting problems.

ment and service delivery ahead.

has been introduced into a number of governments, including longer-range commit-

Given the necessity of moving government forward with a strategic sense

Although advocating strategic management in the public sector appears to

The Rest of the World

many less-developed governments so attempts to involve society will tend only to

You might also like

The Politics of Bureaucracy An Introduction To Com... - (10 The Politics of Public Management)

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Original Description:

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Copyright

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The Politics of Bureaucracy An Introduction To Com... - (10 The Politics of Public Management)

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Chapter 10

The Politics of Public

The New Public Management 326

produced often quite fundamental changes in governing. Those changes in turn

The New Public Management

sector to be something substantially different from business management, the

“compulsory competitive tendering,” and local governments had to accept bids

Advocating contracting and other forms of private sector management also

s­ upervision that is found in a traditional administrative system. This reduced need

The Second Wave of Managerial Reform

to the success of the organization.

employees be rewarded for collective performance as well as individual perform-

There are also other mechanisms for benchmarking organizations. For

present more interesting problems.

ment and service delivery ahead.

has been introduced into a number of governments, including longer-­range commit-

Given the necessity of moving government forward with a strategic sense

Although advocating strategic management in the public sector appears to

The Rest of the World

many less-­developed governments so attempts to involve society will tend only to

You might also like

The New Public Management 326

s upervision that is found in a traditional administrative system. This reduced need

has been introduced into a number of governments, including longer-range commit-

many less-developed governments so attempts to involve society will tend only to