Derlien, Hans-Ulrich and Guy Peters, B. (1998).

'Introduction: The State at Work,', Public Sector

Employment in Ten Western Countries, Volume 1, Edited by Hans-Ulrich and Germany B. Guy Peters,
Cheltenham, UK: Edward Elgar, at, 1-18.

NEW PUBLIC MANAGEMENT

The international reform movement stimulated by neo-conservative governments in the UK (since 1979)
and the USA (since 1980) was about redrawing the boundaries of the state – towards ‘hollowing out the
state’– basically for fiscal reasons. The accompanying toolkit of reform measures became summarized
under the heading ‘New Public Management’(Pollitt 1991;Hood 1991).Whatever the impact of the
ensuing reforms in the individual country – there is quite a bit of national variation (Olsen and Peters
1996; Peters and Savoie 1998; Pollit and Bouckaert 2000) – they moved public sectors in three directions:

● Privatization of previously public tasks and publicly provided services, in particular in countries with a
large array of public enterprises, according to Osborne and Gaebler (1993) led governments to reconsider
whether they wanted to concentrate on steering or also to engage in rowing. First, many countries
privatized nationalized

Introduction 5

industries that did not produce public goods but, for instance, motor cars or coal. Second, the
reorganization of communication systems in a broader sense, including the public monopolies of
railways, postal services and telecommunications, has taken different forms in different countries and in
different sectors. Privatization’s linkage to the internal market of the European Union is constituted by the
EU’s claim that national markets for public service utilities should be opened for competition from the
outside. Privatization did not, however, always lead to complete selling of government assets to non-
governmental investors. In organizational terms its main implications have been an insistence on the
separation of regulatory tasks from operative tasks. Furthermore, in political perspective the drive behind
these reforms in the EU has also been fiscally motivated. The notorious 1992 Maastricht criteria fixing
thresholds for national debts for entry to the European Monetary Union forced member states to cut back
public debts by selling the ‘family silver’ allegedly hidden in public enterprises or more realistically, by
discharging debts accumulated by the often unruly offspring of the state in the economic sector. For
public services privatization, be it mere corporatization or genuine selling of assets, meant at least a
formal decrease of the size of the public labour force (in budgets and national statistics).

● Decentralization became the second imperative, in both unitary and federal systems. In line with NPM
reasoning the centre sought to hive off political and fiscal responsibility for many public services. In
unitary states this fiscally motivated reform impetus was however complemented by a longstanding
politically motivated drive to grant more autonomy to sub-governments or even to federalize the system.
In the European Union, this trend was fostered by developments under the Single European Act 1987.
The establishment of a committee of the regions induced unitary states to define politico-administrative
units to match the states in federal systems such as Germany and (later) Austria. It saw the federalization
of Belgium and Spain (also prompted in both countries by powerful political forces to grant ethnic and
cultural autonomy to subsystems), decentralization in France and devolution in the UK. Even within
federal systems such as the USA or Germany, national policy attempted to redefine centre–periphery
relations and to turn around a trend that had emerged since 1945 towards ever greater centralization of
rule-making and spending power. Thus we would expect also a decentralization of public employment
and a relative shrinking of central government as an employer.De-concentration,the transfer of

6 The state at work, 1

ministerial personnel to agencies concerned with the implementation of policies (agencification in the
UK) though would not affect the importance of central government as an employer.

● Although NPM was about the confines of the state, its more dramatic influence was on the state’s
internal operations in the public services. Not only would the size of these be affected by privatization but
their structures were also to be at the disposition of policy-makers and reformers. The historical
particularity of the public services and their alleged privileges compared to employment in the private
sector were to be reduced, both on normative grounds and because of presumed efficiency gains from
using private sector personnel management principles. In particular, public bureaucracies with their
closed career systems, with tenured positions and status-related pay schemes were the target of reformers.
To what extent management practices, performance pay and contractualism affected the public service
remained to be seen; previous research indicated differences in the rate of reform and compatibility with
national administrative cultures, with the Anglo-American countries as spearheads.

It can be reasonably assumed that, whatever the strength of these reforms in the individual national polity,
these NPM trends would have an impact on ‘the state’. However, reformers at the time of launching the
reforms, did not have sufficient empirical evidence other than crude fiscal data, nor do we today have an
international empirical account of the outcomes of the attempts to reshape the state. Furthermore, there
are aspects of national public service systems not taken into consideration by reformers such as the ethnic
composition of the service and long-term trends such as increasing part-time employment that
nevertheless deserve closer inspection. It is the aim of this book to take stock of the historical
development of public services, starting long before NPM, to shed light on the most important public task
areas or policy programmes, to illuminate the distribution of public employment between national
government and sub-governments, and to trace the impact of NPM on the public service as a social
system that, in most countries, comprises at least 15 per cent of the labour force.

Menzel, Donald C. (2001). Ethics and Public Management, in Koutsai Tom Liou (ed.) Handbook of
Public Management Practice and Reforms, New York: Marcel Dekker, Inc. PP. 349-364

ADMINISTRATION AS MANAGEMENT: ETHICAL IMPLICATIONS

This chapter has largely assumed that public administration and public management mean essentially the
same thing, i.e., getting the -+job done, and therefore, any discussion of ethics is relevant to either.
During the past several decades, however, the meaning of managing and administering public programs
and organizations has sufficiently changed to make it necessary to rethink what it means to be a public
manager or administrator and to reassess the ethical implications associated with each. But what are the
changes? And where did they come from? The most important changes were the enlargement of
management as an operating concept and practice in public affairs and the diminution of administration as
an operating concept and practice. One might go so far as to say that public administration in its most
traditional fiduciary sense has been cast aside in favor of a public management defined as business
management. Echoes of Woodrow Wilson’s assertion that administration is a field of business
administration? Perhaps. Another important change was the erosion of the meaning of public in public
service.

Where Has the Public Gone in Public Administration?

When institutions of higher education began to recognize the importance of educating men and women
for public service careers, the line between governmental and nongovernmental employment was fairly
clear. Thus the rise of master of public administration (M.P.A.) degree-granting programs was a response
to the need to supply city, state, and national governments with talented and capable administrators. The
M.P.A. degree, however, was supposed to convey more than competency on its holder; it was presumed
that its recipient understood why competent administration was essential in a democracy and why he or
she, in giving competence to administration, was also serving the public interest. Normative commitments
to promoting democratic governance and the public interest explain precisely why a graduate degree in
public administration was not called a master’s degree in government administration (M.G.A.).8
Nonetheless, times change and over the past 30 years it has been increasingly difficult to separate public
sector employment from private sector employment—not to mention the enormous growth of third-party-
sector employment (non-profits and quasi-public agencies). The result, some believe, has been an
unwitting redefinition of the M.P.A. degree to emphasize competency only.

Ethics and Public Management 357

H. George Frederickson in The Spirit of Public Administration (1997) eloquently and persuasively argues
that this approach is wrongheaded and potentially dangerous. A democracy, he contends, requires a
democratic administration, i.e., one in which managers and workers are competent and morally
committed to serving the public. Redefining administration as management poses some risks and prompts
concern with regard to “managerial” ethics, especially the utilitarian views described next.

New Public Management

As noted, the 1980s witnessed a renewal of interest in public sector ethics issues and problems. This
decade also witnessed the steady blurring of private/public sector lines, unending bashing of bureaucrats
and bureaucracy by the media and republican presidents (remember it was Ronald Reagan who quipped,
“Washington is not the solution to our problems; it is the problem”), and a steadily growing belief in the
application of private sector management tools to public sector management problems (quality circles,
total quality management, team building, etc.). Thus, when the former city manager Ted Gaebler and the
management consultant David Osborne published Reinventing Government in 1992, the stage was set for
even more dramatic change in our thinking about administration and management. The “reinvention”
movement, as it is often called, was galvanized when the Clinton administration assumed office. In
October 1992, the administration released the National Performance Review, a document that embodied
the spirit and soul of reinventing government per Osborne and Gaebler, by promising to turn the federal
government into a government that “works better and costs less.” The “new public management” would
require men and women who steer organizations—not row them; empower citizens and coach workers
through teamwork and participation; thrive on and promote competition; reject rule-driven organizations
in favor of mission-driven organizations; seek results, not outcomes; put customers first; foster
enterprising and market-oriented government; and embrace community-owned government. New public
managers (NPMs) are also likely to find the privatization of public goods and services an attractive
alternative and adopt new management tools such as benchmarking, strategic planning, reengineering,
and total quality management as the situation warrants. This new way of thinking about management
casts public managers into the forefront of getting the job done for Americans in an economical and cost-
effective fashion. The era of the administrator who responds to citizen requests and demands rather than
meeting the customer’s needs, fixes problems when they arise rather than preventing them before they
become uncomfortable, and promotes the public interest per the new public administration or some other
value set is over. But what are the implications for ethical behavior and practices under the new public
management?9 Advocates are certainly not encouraging NPMs to

358 Menzel

break the law or engage in unethical management practices or behavior. Rather, they are mostly silent
about the place of ethics or morality in public management.10 This silence has not gone unnoticed and
has caused some observers to worry a great deal about what might be ahead. Professor Larry Terry (1993:
393–394), an outspoken opponent of new public management, believes that NPMs go too far in
embracing entrepreneurial values such as “autonomy, a personal vision of the future, secrecy, risk-taking,
domination, coercion, and a disrespect for tradition.” A colleague, H. George Frederickson (1997: 22),
also worries that NPMs’ acceptance of utilitarianism, much as in years past when the tenets of science
were believed well suited to public administration, will reduce the public interest to the “sum of atomistic
individuals.”A public interest so defined is, essentially, no public interest, only competing interests.
Furthermore, Frederickson cautions against the downside of turning citizens into customers, which may
result in a collective escape from responsibility and diminish civil discourse as individuals and groups vie
against one another to extract promises and favors from government. He is equally concerned about the
effect of the reinvention movement and privatization on public affairs.

Government . . . is being reinvented to put together public-private partnerships, “empower” citizens with
choices, and so on. In sum, it is now fashionable to degovernmentalize on the promise of saving money
and improving services. If previously governmental functions are shifted to the private sector or are
shared, it is a safe bet that corruption will increase. It is no small irony that government is moving in the
direction of privatization at the same time that there is a rising concern for governmental ethics. (1997:
171)

Professor Louis W. Gawthrop (1999) has also been outspoken about the risks of debureacratizing
government and treating public service as merely work. In Public Service & Democracy, Gawthrop
(1998: 17) is unrelenting in his concerns:

We are faced with a new reality in which the citizen has been reinvented into the customer; interest
groups—broadly defined to include private sector contractors, suppliers, and so on—have been re-
designated stakeholders, and, most significantly, public servants have been recast in the mold of
entrepreneurs. In the process of reconfiguring public bureaucracies, however, little attention is being
given to how this new reality conforms to the ethical-moral values and virtues that are deeply embedded
in our democratic system.

This new reality represents a break from the old but no less reassuring reality of the administrator as a
detached, dispassionate rational provider of objective information and advice to elected bosses. Good men
and women with good intentions who allow themselves to be seduced by a sense of duty as competent -

Ethics and Public Management 359

purveyors of neutral information became neither moral nor immoral actors. Rather, they became amoral,
and, in this capacity, they can contribute little to ethical or democratic governance. Notions of faith, hope,
and love, Gawthrop contends, are not “generally recognized as significant components of public
administration in America today. Instead, it is the logic of utility that still provides the basic rationale for
the classical management tenets of efficiency and control” (1998: 87). Despite the enormous influence of
the old and new management realities, Gawthrop is an optimist, not a pessimist, about public service,
ethics, and democracy. A moral impulse, he contends, must suffuse bureaucracy and democracy if the
common good, as promised by a democratic society, is to be achieved. But from where could and should
a moral impulse radiate? From the public? Elected officeholders? Administrators? Gawthrop places his
confidence in administrators if and only if they can break out of “the habits of the self-serving good which
allow public servants to pursue a procedural, quasi-ethical life” (1998: 139). In other words, an ethical life
rooted in procedural correctness—avoiding conflicts of interest, disclosing financial information relevant
to one’s office-holding, and conducting public affairs in the sunshine—is, in Gawthrop’s view, a hollow
ethical life at best. At worst, a procedural, quasi-ethical life produces a “government of persons without
fault, operating in a society without judgment, through the ministrations of a Constitution without a
purpose” (1998: 139). Ethics is morality in action, he believes. It is, therefore, a mistake to separate
morality and ethics, as is often done. Ethics defined only as compliance— “Tell me what is right; what is
wrong; what is legal; what is not permissible”—is also unacceptable. It is imperative that public
administrators and managers understand that ethics is morality in action and that there is a moral
dimension of democracy. One other issue that may be amplified considerably by NPMs is the challenge of
managerial discretion. As John Rohr notes, this is an enduring issue in public affairs that remains an
unsolved problem. Put as a question, “How can a democratic regime justify substantial political power in
the hands of people who are exempt by law from the discipline of the ballot box?” (Rohr, 1998: 6). Rohr
has dared to “solve” this unsolved problem in To Run a Constitution (1986), the oath of office, he asserts,
legitimates a degree of professional autonomy for the public manager and “can keep this autonomy within
acceptable bounds” (1998: 69). The oath of office, he reminds the reader, is more than a mere promise; it
is a morally binding commitment to uphold the Constitution. As such, he argues, it is a “statement of
professional independence rather than subservience” (1998: 72). The oath guides autonomy and deters
public managers from becoming maximizing bureaucrats. As appealing as Rohr’s solution might appear,
it is not without its problems. For example, not all public managers take an oath of office. Public
managers in the U.S. government are, but not all state or local public managers are sworn to uphold

360 Menzel

the Constitution. Then there are public managers who manage nonprofit organizations or organizations
that are quasi-public. These managers may not take an oath as well. Finally, there is the bleak reality that
managers who do take an oath of office do not understand Rohr’s contention that the oath places self-
imposed limits on the exercise of managerial discretion.

ETHICS AND PUBLIC MANAGEMENT IN THE FUTURE

This chapter has presented a historical portrait of the evolution of ethics in public administration and
management in the American experience. Unfortunately, it will remain an unfinished portrait given the
changes in our thinking about organizing and managing public organizations. These changes are in no
small measure exacerbated by the forces of privatization, globalization, computerization, and the rapidly
moving world of information technologies. The threat of the resurrection of the morally mute manager is
real and must be taken seriously. The new public management movement described has yet to define itself
ethically or morally. Or, in the worse case, it has redefined itself as a pernicious brand of moral muteness
that reduces citizens to customers and public service professionals to businessmen and businesswomen
whose major task is to make citizen-customers satisfied with what they want and receive from
government (Frederickson, 1999). This pathway, as Gawthrop reminds us, is certainly not a pathway to
the common good. It even raises the question of whether or not such an approach can avoid the worse
pitfalls of unethical behavior and practices in government. Do managers of public organizations have to
be ethical in order to have good government? Without question. Public managers who do not understand
why the public cannot be removed from their job descriptions or why being competent in one’s work is
not sufficient to being a good manager are dangerous and should be encouraged to ply their trade in those
occupations that do not demand more than competency from them. Perhaps President John F. Kennedy’s
view of ethical government best captures what is needed: “The ultimate answer to ethical problems in
government is honest people in a good ethical environment. No web of statute or regulation . . . can hope
to deal with the myriad possible challenges to a man’s integrity or his devotion to the public interest
(Lewis, 1991: 14).

NOTES

8. One well-known school, the Wharton School of Business at the University of Pennsylvania, actually did
grant a master’s degree in governmental administration.

9. For a spirited discussion of the new public management, see the Symposium on Leadership,
Democracy, and the New Public Management in the Public Administration Review, vol. 58 (May/June)
1998.

10. There is not a single reference to “ethics” in Reinventing Government.

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