Public Sector Management

New Public Management: Meaning,

Principles, and Features

By
Ahmed-Nor Mohamed Abdi
 Specific Learning Outcomes
By the end of the chapter, Student will be able to:
Define the concept of NPM
Enumerate the Osborne and Gaebler listed 10
features of a new type of government.
 Describe the pprinciples NPM
List the Christopher Hood’s seven doctrinal
components of NPM
Explain the Nicholas Henry’s five fundamentals’ or
five A’s of NPM
Discuss the implications of the New Public
Management
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 Meaning and Concept of New Public
Management
 New Public Management or NPM is an approach that
seeks to build an administration by implementing
flexibility, transparency, minimum government,
de-bureaucratization, decentralization, the
market orientation of public services, and
privatization.
 It is a paradigm shift from traditional public
administration to New Public Management.
 NPM makes a citizen-friendly administration from
a rigid, hierarchical, disciplined bureaucratic
administration that needs to make weak public
administration strong and effective.
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 NPM is also defined as a process in which the
liberal market principles of efficiency and
economy are implemented in public sector
management for making public sectors more
effective.
 New Public Management is also known as
Managerialism, Market-based Public
Administration, Entrepreneurial Government, etc.
 So it is easy to identify that NPM
emphasizes three Es for reforming public sectors.
1. Efficiency
2. Economy
3. Effectiveness

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

Exponents of New Public Management

 The term “New Public Management” was first coined
by Christopher Hood in his book ‘A Public Management for
all Seasons?’ in 1991.
 He described NPM as a ‘Marriage of opposites’, one of
which is the new institutional economics and the other is ‘a
set of successive waves of business-type managerialism’.
 Due to NPM, Some terms such as managers, service
providers, customers, etc, are beginning to gain importance
in the public administration discussion.
 NPM was mainly intended to improve public service,
measure and improve performance, reduce red tape and
cost with more public participation
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 The book Reinventing Government: How the
Entrepreneurial Spirit is Transforming the
Public Sector by Osborne and Gaebler, published
in 1992, takes this new trend of public
administration, the New Public Management,
much further.
 Osborne and Gaebler listed 10 features of a new
type of government.
1. The new government is committed to ensuring that citizens can
access products and services from a variety of sources and to
maintain healthy competition between the various product and
service providers.
2. It empowers the citizens by limiting the bureaucracy.
3. The work of an organization is considered as a measure to
measure the success of various government organizations.
4. This government is governed by specific goals, not by laws.
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5. This government sees citizens as consumers and looks for
many alternatives.
6. This government believes that prevention is better than
cure.
7. This government focuses on how to make money, not just
spending.
8. This government wants decentralization of authority and
believes in participatory management.
9. This government is more confident in market rules and
procedures than bureaucratic rules and procedures.
10. This government is not only dependent on public
administration to solve the problem. This government
depends on government institutions, non-governmental
organizations, private corporations, etc. to solve social
problems.
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Christopher Hood’s seven doctrinal
components of NPM
 Christopher Hood (1991) introduced the seven
doctrinal components of NPM in his seminal article
“Public Management for All Seasons”
1. Hands-on professional management in the public
sector
2. Explicit standards and measures of performance
3. Greater emphasis on output controls
4. Shift to disaggregation of units in the public sector
5. Shift to greater competition in public sector
6. Stress on private-sector styled of management practice
7. Stress in greater discipline and parsimony in resource
use
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 Principles of New Public Management

The following principles of NPM can be identified

from the above discussion.
1.The main principle of NPM is to emphasize economy,
efficiency, and effectiveness by downplaying the
importance of regulation.
2.Reorganizing the bureaucracy into different agencies.
3.Increase competition through the introduction of quasi-
market systems and contract systems.
4.Expenses reduce and facilitate income growth.
5.Shift to greater competition in public sectors.

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1. NPM emphasizes more on private-sector styles of
management.
2. Managerialism that means the role of the administrator
transforms as a manager.
3. Increasing the flexibility and mobility of
organizational structure, personnel, and working
conditions.
4. Greater emphasis on consumerism. To NPM citizens
are considered as consumers.
5. Secure participation of people through the
decentralization process

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Features of New Public Management

 Although principals can be identified as features.

However, for your convenience, I have highlighted
some of the following features of the new public
management from the above principles.
1. Citizen’s empowerment
2. Decentralization
3. Restructuring of Government organization or sector
4. Goal-Orientation
5. Cost Cutting and facilitates income growth
6. Managerial Support services
7. Secure better service to the citizens
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Citizen’s empowerment
 Empowerment of citizens is one of the major features
of New Public Management.
 NPM assures citizen’s freedom of choice.
 It secures quality services to the citizens.
 Healthy competition among the service and
product’s sectors allow citizens to choose their
service and products according to their needs and
choice.
Decentralization
 NPM focuses on the decentralization of power from
rigid, hierarchical bureaucratic to flexible and dynamic
managerial support systems

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Restructuring of Government organization or
sector
 New public management restructures the
governmental organization or sectors.
 The government divides each of its sectors into
smaller units and assigns responsibilities to the
private sector through contracts.
Goal-Orientation
 Its main purpose is to achieve specific goals.
 That is why NPM more emphasises on the
outcomes rather than procedures and rules.
Cost Cutting and facilitates income growth
The main purpose of contracting out of governmental
sectors is to reduce the cost of the government and secure
maximum income of the government.
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Managerial Support services
 The main purpose of the managerial support services is to
secure citizen’s quality service.
 For this reason the best talent from the market are
hired by offering handsome salary, incentives and other
benefits.
 NPM always suggests skill improving training
programmes for getting maximum outcomes.
Secure better service to the citizens
 It is already stated that the main purpose of implementing
New Public management is to secure citizen’s quality
services.

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 Nicholas Henry’s five fundamentals’ or five A’s
of NPM
 Alertness: Government should improvise the problem
and act before it actually hit the system, not the other way
round.
 Agility: Government should be agile in the sense that it
should be ‘entrepreneurial, open, and communicative’.
 Adaptability: Government should be continuously
engaged in improving quality of its programmes and
services and thereby adjusting with demands.
 Alignment: Government should collaborate with other
government, non-governmental, and civil society
organizations to achieve social goals.
 Accountability: Government should have a clear and
compelling mission that focuses on the needs of the
people
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Patrick Dunleavy’s three component of NPM
 Another leading exponent Patrick Dunleavy has
enumerated three key components of NPM, namely,
disaggregation, competition, and incentivization
 Disaggregation means splitting up public bureaucracy into
smaller components with underlying emphasis on
flattening of hierarchies and ‘flexibilization’ in personnel,
IT, procurement, and so on.
 Competition refers to the competition that NPM seeks to
infuse among the potential providers.
 It includes among others quasimarket, voucher scheme,
outsourcing, compulsory market testing, intra-government
contracting, public/private liberalization, deregulation,
consumer-tagged financing, user-control, and so on .
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 Incentivization favours providing pecuniary-based
specific performance incentives for augmenting
productivity in organization

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Implications of the New Public Management
 Ghuman has identified five broad categories of
administrative reforms:
1. Reorganization and downsizing of government:
 Though NPM does not directly suggest
downsizing of government, however, the elaborate
reorganization and restructuring measures it
prescribes, often lead to slimming of government.
2. Performance-based organization: One of the
direct implications of NPM for public sector
management is to adopt performance as the basis of
organization.
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3. Creation of Senior Civil Services (SCS):
 Under NPM the idea of unified civil service is
rejected by separating policy from administration.
 For effective implementation of policies, NPM
proposed to contract out service delivery functions to
non-governmental or quasi-governmental agencies
and private service providers, saving the major policy-
making functions for core departments to be manned
by seasoned public servants.
 Hence, it recommends forming a cadre of SCS based
on written employment contracts and partly
performance-based pay for effective formulation of
public policies

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4. Adoption of private sector styles of management
practices:
 Another major implication of NPM is the adoption of
private sector managerial practices in pubic sector
management.
 NPM moved from bureaucratic model of Kanter’s
model of flatter (non-hierarchical) and more focused
structure of organizations to an entrepreneurial form of
governance as Osborne and Gaebler (1992) seemed to
have suggested.
 Hence, NPM calls for greater synergy between public
and private sector management.

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5. Customer-driven administration:
 If there is any seemingly positive implication of NPM
on overall governance, it must be the customer-
orientedness of administration.
 NPM, unlike the traditional bureaucratically managed
public sector management, elevates citizen to centre of
discourse.
 Customer’s satisfaction index is considered to be ‘the’
criteria of public service.
 Several procedural innovations like Citizen’s Charter,
citizen’s report card, and so on are invented to reflect
citizen’s choice.

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