Chapter 1
The New Public Management in context
Stephen P. Osborne and Kate McLaughlin
Introduction
Debate over the nature and import of the New Public Management (NPM) is as intense today as it has been over the last decade. This book is concerned with exploring this debate. This introduction will provide the context for the chapters which follow and frame some key questions to consider in this debate. The first section will situate the NPM within the historical development of public administration and management in the UK, and the second section will broaden this context to a global one. The concluding section will highlight some key questions to consider in evaluating the impact of the NPM.
Public management in the UK: a four-stage model
The nature of public services, and of research and theory about them, has changed dramatically over the last 100 years. Drawing upon the experience of the UK, it is possible to distinguish four distinctive stages of development, starting from the late nineteenth century onwards. Other nations will present with variations upon this model, but it is a useful classification, nonetheless.
The late nineteenth century, as Thatcher never tired of reminding us in the UK, was the period of the minimal state. This is the first stage of the development of public management. Government provision was seen, at best, as a necessary evil. The majority of public services were located in the charitable sector, or through private provision (Owen 1965). Indeed, in the US, such a model was elevated almost to the status of a social principle, as de Tocqueville (1971) noted at the time (see also Salamon 1987; Moulton and Anheier 2000). However, the minimal state or the state as a necessary evil is not the same thing as no state whatsoever. It was in these early days of public provision that the basic principles of public administration were laid out. Wilson (1887) famously distinguished between the constitutional structure of government and the administration of its roles.
The second stage of public management, commencing in the early twentieth century, is best characterized as that of unequal partnership between government and the charitable and private sectors. In part, this was a function of a larger ideological shift, from the traditional conservatism of the nineteenth century and towards social reformism and the Fabianism of the new century (Prochaska 1989). This shift contained three elements:
- First, a recasting of social and economic problems away from a focus on individual blame and towards a recognition of them as societal issues which concerned everyone (for example, the shift from the âchild saversâ of the late nineteenth century, who saved individual children from maltreatment by their parents, towards child care legislation which established common standards for the care of all children).
- Second, the recognition that the state did have a legitimate role in providing at least some public services, such as sanitation.
- Third, that where the state did not provide public services then it needed to enter into a partnership with the charitable and private sectors for their provision â though this partnership was to be very much an unequal partnership, with the state as the senior partner.
This model of partnership in the provision of public services has sometimes been characterized as the extending ladder where the state provided a basic minimum of essential provision and the other two sectors extended beyond this (Kamerman and Kahn 1976). In doing so, the charitable sector in particular was held to bring some essential characteristics to public services â not least its flexibility and potential for innovation (Webb and Webb 1911).
The third stage is that of the welfare state, which in the UK extended from 1945 to the 1980s. Underpinning this model was the belief that charitable and private provision had failed because of the fragmentation and duplication of service provision, and because of their inefficient and ineffective management (Beveridge 1948). Consequently, the government was to meet all the needs of its citizens âfrom the cradle to the graveâ (Beveridge 1942). These services would be managed by a professional cadre of public services in a professional and objective manner. In the UK, at least, this was certainly the high point of the hegemony of public administration upon the provision of public services.
The final stage, to date, is that of the plural state. From the late 1970s onwards, the Conservative Party in the UK began to propound a critique of the welfare state which articulated a number of emergent dissatisfactions with it. The welfare state had always focused upon the provision of a minimum standard of service to all citizens. This was very much a product of the rationing mentality of the post-Second World War era that it had evolved within. By the late twentieth century, however, the perceived needs of citizens had moved on, away from a concern with a basic level of service for all and towards services designed to meet individual needs. Moreover, service users increasingly demanded a greater say in the design and delivery of their public services, as well as a desire for greater choice. Finally, Thatcherism posited a critique of the âprofessional cadresâ who had long provided public services. Now it was these public officials who were inefficient and ineffective, and who were more concerned with their own needs than those of their service users, encapsulated by Thatcher in terms of the greedy and overbearing public sector trade unions which put the needs of their members above those of the local community (Mischra 1984).
The response of Thatcher to these perceived problems was the privatization and marketization of public services (Ascher 1987). In the economic sector, the role of the state was almost entirely eradicated (Farnham and Horton 1996). In the social and community sectors, the vision of the âenabling stateâ was promoted, where the state, at the central and local levels, planned and (at least partly) financed public services but where provision was located within the âindependent sectorâ â comprising both the voluntary and community sectors and the forprofit sector (Rao 1991).
The focus of the 1979â97 Conservative government in the UK was very much upon market disciplines as the solution to the ills of the public sector, a position most forcefully articulated by the Adam Smith Institute. In this model, marketization was held to promote the efficient and effective provision of public services, while promoting responsiveness to individual need and user choice in service provision (Pirie 1988). Not all critics held to this version of the plural state, however. Increasingly, critiques have emerged stating that it was concerned more with economy and cost cutting than with effective service provision and that it assumed the superiority of the private sector and private sector management techniques above those of the public sector and public administration (Metcalfe 1989).
This debate became most focused in the 1990s as this approach became characterized as the NPM. This latter approach to public management was founded upon a trenchant critique of bureaucracy as the organizing principle within public administration (Dunleavy 1991), a concern with the ability of public administration to secure the economic, efficient and effective provision of public services (Hughes 1997), and a concern for the excesses of professional power within public services and the consequent disempowerment of service users (Falconer and Ross 1999).
Although there has been some debate over the precise nature of the NPM (Dunleavy and Hood 1994; Flynn: Chapter 4, this volume), the classic formulation of it (Hood 1991) holds that it comprised seven doctrines:
- a focus on hands-on and entrepreneurial management, as opposed to the traditional bureaucratic focus of the public administrator (Clarke and Newman 1993);
- explicit standards and measures of performance (Osborne et al. 1995);
- an emphasis on output controls (Boyne 1999);
- the importance of the disaggregation and decentralization of public services (Pollitt et al. 1998);
- a shift to the promotion of competition in the provision of public services (Walsh 1995);
- a stress on private sector styles of management and their superiority (Wilcox and Harrow 1992); and
- the promotion of discipline and parsimony in resource allocation (Metcalfe and Richards 1990).
To this formulation can reasonably be added an eighth doctrine â that of the separation of political decision-making from the direct management of public services (Stewart 1966).
However, it is argued here that this view both of public management and of the NPM is to pose too narrow a model of the NPM. To stay with our typology of the stages of public management in the UK, the NPM is very much part of the fourth stage, of the plural state. However, this did not end with the marketbased model of Thatcher. From 1997 onwards, the âNew Labourâ government has taken the development of the plural state a stage further. This has been away from a narrow focus on the marketization of public services and towards an emphasis upon community governance (Clarke and Stewart 1998). Here the public sector is no longer defined solely in relation to the presence, or otherwise, of the government as a planner or service provider. Rather the planning, management and provision of public services is seen as something to be negotiated between a number of actors, including government, the voluntary and community sectors and the private sector. In this model, the key task of government becomes the management of these complex networks of public service provision (Rhodes 1996; Kickert et al. 1997). Consequently, then, the debate about NPM has been broadened from the earlier narrow concern with marketization to one which focuses upon governance as the pre-eminent task of public management.
Public management in the international context
So far, the discussion of public management, public administration and the NPM has been focused solely upon the UK experience, as a microcosm of the international debate. It is important now to broaden this debate to the international level â as Part III of this book does. Here, the dichotomy between public administration and the NPM is even more sharply drawn, as are the battle lines. Around the world, public management has undergone tremendous changes over the past two decades. The twin traditions of public administration, incrementalism and administration, have been challenged by the more managerialist models of NPM.
At first these were discrete challenges in particular fields, such as âmanagement by objectivesâ within the personnel field and âzero-based budgetingâ within the financial field. Since the midâlate 1980s, however, these discrete challenges have been superseded by a more holistic model of managerialism which has pervaded all aspects of public organizations â and which has been identified earlier as the NPM. This term now enjoys international recognition to signify a pattern of reform of public management per se, as well as the associated growth of the plural state (Pollitt and Bouckaert 2000).
It is significant to note also that this holistic model of managerialism has itself been subject to refinement and incremental change in light of experience with its workability. In the US, for example, early NPM reforms were concerned with the replacement of public services by private ones (Savas 1987) and with creating an entrepreneurial and user-oriented culture within public organizations, much influenced by the organizational excellence approach of Peters and Waterman (1982). Latterly, the focus has shifted to reinventing government within the context of a plural state, as envisaged by Osborne and Gaebler (1992). Similarly, in mainland Europe, the focus has shifted from the output control of the Tilburg model (Schrijvers 1993) to the management of complex networks in public governance (Klijn and Teisman 2000). The NPM is thus not a static phenomenon but an evolving one.
Its proponents have argued that the NPM has brought benefits of cost efficiency and service effectiveness to public and non-profit management, and that it has helped to address fundamental weaknesses in the management of such organizations, and in the systems of accountability and control in public services (Lane 1999). It has not been welcomed uncritically, however. A great deal of subsequent writing on public management has been concerned either with the normative superiority, or otherwise, of the NPM as a model of public service management over âold-styleâ public administration or with its status as a new paradigm of academic research and theory (for example, Lynn 1998; Gow and Dufour 2000; Dawson and Dargie: Chapter 3, this volume).
A range of critiques have suggested that, among other things, it has simply been a passing fad, it has undermined the accountability of public services to their communities and it has failed to deliver the promised efficiency and effectiveness of public services (Lynn 1998; Pollitt 2000). A debate has also raged both to the extent that it is a globally convergent or a more nationally specific (and Anglo-American) phenomenon (Kickert 1997) and to whether its apparent prevalence is due to its universal applicability or its adoption and promulgation by such international bodies as the World Bank and IMF as a universal panacea for both public service and civil society failures across the world (McCourt: Chapter 14, this volume).
Flynn (Chapter 4, this volume) has suggested that a wide range of internal and external drivers have to be taken into account in explaining the present ascendancy of the NPM globally. It has also been suggested that there are dangers associated with âviewing the New Public Management as a coherent and unified set of ideas and practicesâ (Newman: Chapter 5, this volume) when research on the implementation of NPM reforms illustrates rather diversity and a âcomplex body of ideas and practicesâ (Lowndes 1997). Moon and Welch (2000), among others, have attempted to develop a framework which can map and evaluate this diversity.
In summary, critics have questioned the extent to which there is a single model of the NPM which can be deployed as a tool for comparative analysis let alone global reform prescriptions. They also query the extent to which it has sufficient conceptual coherence to provide an alternative to public administration as either a theoretical construct for academic research or an approach to the management of public services.
Notwithstanding these debates, the NPM does still stand as, at worst, one of the two dominating paradigms of public management across the world at the turn of the new millennium. Whether the NPM is a direct competitor for public administration, as a new, convergent, paradigm of public management (Gow and Dufour 2000), or it is instead a development within the continuing, and nationally divergent, paradigm of public administration (Lynn 1998) is a debate which will continue, and to which this book contributes.
In reading this collection, readers may wish to focus on the following points when evaluating the impact of the NPM upon public management:
- The extent to which public management is a nationally specific or a genuinely globally convergent phenomenon.
- The way in which public management research articulates the methodological problems which are derived from its eclectic roots (not least in political science, policy studies and economics), applied focus and multiple levels of analysis.
- The extent to which the NPM does provide a coherent paradigm for academic research and enquiry and challenges the previous public administration paradigm.
- Consequently, whether the NPM and public administration are compatible or incompatible models of public management, and whether sustained criticism of the NPM implies a retreat back to the traditional model of public administration and the superiority of bureaucracy.
- Whether emerging developments around the world â such as community governance and modernization in the UK, public governance on mainland Europe and the look east model in the Pacific A...
