Unit-II

NEW PUBLIC MANAGEMENT

Meaning

New Public Management is the new reform strategy being widely accepted by all kinds of
administrative system all over the world. It is a new combination of ‘public’ and ‘management’ -
a combination of concepts taken both from ‘public administration’ and ‘business management’.
It aims at 3Es- efficiency, economy and effectiveness. New Public Management aims at adoption
of management techniques developed and successfully tested in the private sector for the
efficient, economical and effective functioning of Public Administration as an instrument
of ‘collective problem solving’.

The new public management has emerged out of Thatcherism (Britain - the first country
which initiated the privatization of public enterprise) in the 1970s and Reaganism (USA) of the
1980s.
The word ‘New Public Management’ was coined by Christopher Hood and used in his
Paper ‘Public Management for all Seasons’ published in 1991. The book entitled ‘Reinventing
Government’ by David Osborne and Ted Gaebler, published in 1992, heralded the birth of New
Public Management.

‘New Public Management’ is also called as ‘Managerialism’ (by Pollitt), ‘Market - based
Public Administration’ (by Lan and Rosenbloom), ‘Entrepreneurial Government’ or
“Governmental Market’ (by Osborne and Gaebler) and ‘third way’ between public administration
and private administration (by U.A. Gunn).

Goals of New Public Management

David Osborne and Ted Gaebler prescribed the following ten principles of entrepreneurial
governance:

1. Catalytic Government: The government should concentrate on catalyzing the public

sector, private sector and voluntary/non-governmental sector into action to solve the
societal problems and not just on providing services. Thus, the government should engage
itself in steering rather than rowing.

2. Competitive Government: Competition among government agencies must be

encouraged. Competition should be injected into the governing process by encouraging
bidding for tasks, internal rivalry among sub-units and competition among services for
clients.

3. Community Owned Government: The government should strengthen and empower the
citizens, families and communities to solve their own problems.

4. Mission - Driven Government: The government should be driven by its goal and not by
its rules and regulations. In other words, it involves transforming rule-oriented
government into goal-oriented government.

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5. Results-oriented Government: The government should find outcomes (results) by
encouraging target achievement and mission directed efforts. It should measure the
performance of its agencies mainly in terms of outcomes and not inputs.

6. Customer Driven Government: Clients should be viewed as customers. They should be

given choices. Public agencies should be client - friendly. Employees must be suitable
trained in customer contact. There should be introduced test marketing and suggestion
forms.

7. Enterprising Government: Government’s image of being a mere spending mechanism

must change. It should not just spend money, but earn it as well. It should invoke the
device of user fees, shared savings, enterprise funds, entrepreneurial loan pool, and
internally competitive profit centers.

8. Anticipatory Government: On the analogy of ‘prevention is better than cure’, public

agencies should not just deliver services to meet needs, but prevent needs from arising.
Examples are fire prevention, anti - smoking campaign, preventive maintenance etc.

9. Decentralized Government: Centralized agencies and institutions should become

decentralized. The traditional hierarchical structure should be abandoned, viding way to
devolved authority, teamwork, participatory management, labour management
cooperation, quality circles and employee development programmes.

10. Market Oriented Government: Government should not attempt to achieve its ends only
by command and control, but also by restructuring market. Examples could be subsidized
health insurance, incentives for dispersal of industries from city area etc.

Thus, the influence of New Public Management has been quite significant. The policies
of developing and developed countries are being increasingly influenced by New Public
Management. The responsibilities of public administration and the executive branch of the
government are being confined to facilitating, leading and catalyzing changes to achieve more
with limited financial resources and fewer personnel.