About the Author: Ms. Margaret Gangte authoured Journal Articles and contributes to articles on international development, Polity, Economy, Human Resource, Defence, Crime and Sustainability. Some of her well noted published articles are: Sustainable Community Development Alternative: Unlocking the Lock, 2010 (Journal of Sustainable Development by Canada Centre of Science), Right Man for the Right Job: Motivate to Deliver, 2010 (Indian Journal of Dynamic Public Administration) and Farewell Gift to Afghanistan before the Final Adieu, 2011; Why Africa Likes China, 2011. The Heart Says Yes, The Mind Says No for Palestine Statehood Bid, 2011, Constructive Dissent: USA on the Threshold, November, 2011 (Publication of the American Society for Public Administration PA Times), Skewed Sex Ratio: Gender Poverty Alleviation in India, December 2011 Global Journal.Inc USA. .The recent published journal article by Global Advanced Research Journal of Management and Business Studies is titled ''From Twilight to Dawn: Set the Basics Right to Get Institution Right''. dated February, 2012.
The purpose: The purpose of this article is to show the relevance of the old disciplined and principles of public administration in the new public administration that advocate for full freedom and liberty leading to intensive privatization starting from developed market economies and across the globe to developing markets. The major cause of economic downturn experienced in the developed countries is the uncontrolled freedom granted to private agencies without sufficient regulation from the government. While regulation should not exceed above limits to avoid controlled regime, the need to balance between freedom and liberty with controlled discipline in a '' Pendulum Approach'' is advocated in this paper using a wide variety of examples across the world, to avoid extreme approach for sustainability.
Abstracts
This piece reviews the concept and practice of NPM and uses the comparative study of global experiences as the methodology for proving the relevance of NPM even in the so-called post NPM phase. The experience of radical reforms in the west is a lesson for developing countries still grappling to understand NPM as a concept and a practice. The academia argues to support or to oppose NPM, this article shows the approach to balance it with the pendulum clock theory to tackle the dilemma of growth with control.
Key words: New Public Management, context, public expectation, pendulum theory, balanced approach.
1. Introduction: The New Public Management (NPM) is commonly described as a set of technique and a practice adopted from private sector to improve efficiency and accountability in public sector. Some even perceived it as an ideology, while others have called it a 'new model' or a 'new label'. However the popularity of NPM and its adoption does not automatically lead to the same nature and pace of reforms in different countries. Although most countries responded to NPM from a common fiscal crisis and similar desire to reform the inefficient Weberian bureaucracy, the implementation of NPM produce different results with some countries like U.K, Australia and New Zealand adopting the reforms radically, others like the Scandinavian countries apply it moderately while public sector reforms in developing countries remain elusive . This is because whilst the concept is transmitted to developing countries, it is evidently filtered, interpreted and modified by a combination of national political-administrative history, culture, traditions and style of governance.
1.2. The problem: This piece reviews the concept and practice of NPM which has remained controversial from inception till date. The article tries to show how an academic debate moves the real understanding of the concept away from the reality. To explain the reality of NPM against the conceptual understanding , the article refers to global experiences of NPM in different contexts and culture to show the various reactions to the concept and it is wrong to call these reactions as different models,. The comparative study of global experiences shows the relevance of NPM even in the so-called post NPM phase. China has not adopted NPM in the way it is conceptualized by the originators but it has adopted civil service reforms, performance measurement and local self government. Similarly, African countries have reservations on NPM but there are subtleties brought out in the article how NPM has been used in African countries. India has not approved NPM to initiate civil service reforms, but the subtleties of NPM are seen in Public Private Partnership and introduction of performance measurement in government. All of these evidenced a very slow pace of NPM in developing countries but no country including the highly centralized administration like China can fully deny NPM. Presently, some scholars have held NPM responsible for the global downturn in advocating surrender of power under privatization. The article shows that NPM as a concept is not to be blamed because it has helped many countries and is still helping. The foundation of NPM is discipline, which means monitoring, supervision even if freedom is granted under privatization. If this basic discipline disappears as it had occurred in the home purchase- financial crisis in USA affecting the whole world, it means that NPM has been flouted seriously. The article shows the balance road which other research have not explored and it does not advocate a new concept to challenge NPM. The article simply states NPM as the basic foundation of administration and that the freedom given to private agencies must be regulated which is explained through the pendulum clock theory. While the academia argues to support or oppose the NPM, this article argues to balance the approach with reality.
2. Accelerator of NPM: Importance of Context
2.1. Context generate different discourses, including different diagnosis of the problems that government are seeking solutions. The diagnosis do not arise automatically from the 'objective' problems but are constructed within economical, political, constitutional and cultural context (Flynn, 2002 p.58).The importance of context is emphasised by Flynn and by Batley and Larbi in their research in Ghana, Zimbabwe, India, Srilanka, Bolivia, Argentina, Venezuela, South Africa, Kenya and Thailand in water, health, business and agriculture marketing services. Contexts broadly include macro and micro environment; political conditions, political positions, immediate problems, institutional context, managerial climate, national culture, socio-technical systems and institutional capacity.
2.2. At macro level, the most evident changes carried out by government most apparent in Europe are privatisation of state industries. At the micro level, changes concerned are the ways in which the restructuring activities are managed in financial, performance and personal management. New Zealand applied NPM radically and contracted out all of its public services because of its remarkable reliance on contractual arrangement within government (Schick, 1998). Scandinavian countries moderately apply the market approach due to shortage of labour and deferred autonomisation (Ferlie et al. 1996).
2.3. Political structure and positions adopted by political parties are also a crucial influence on the reforming state. Influential positions were those of what came to be known as the New Right. The New Right influence the radical approach of New Zealand, France (1980s), Malaysia (mid 1990s), and Britain (late 1990s). The radical approach influenced the administrative doctrines of whether to 'make the managers manage' as adopted by New Zealand in its hard-edged contractualism (Allen Schick, 1998) to the extend of replacing all rule and process based civil service system with contract performance or, to 'let the managers manage' based on decentralisation and skill development as in the case of UK. NPM has been moderately applied in Norway, Sweden and Scandinavia.
2.4. The reforms can also be understood in the context of ideology supported by a country. For example in China, in order to align with the socialist ideology of a communist government, China implemented a civil service reforms that focuses on retrenchment of surplus staff and retraining civil servants in new skills to suit new jobs (Gavin Drewry and Che-po Chan, 2001). In U.K, under the New Right influence, Thatcher government in its Next Steps initiatives in the early 1988 implemented Agencification aiming at increasing managerial autonomy (Larbi, 1999). Similarly, under the New Right ideology, New Zealand adopted a radical reform and contracted all of its public services (Ferlie et al, 1996), which of course is an exclusive case because of its highly developed market system.
2.5. The existence of a well developed democracy with good leadership as in the case of UK, New Zealand and Australia provided conditions for NPM implementation while coalition government in the Lubber government, Netherlands succumbed to bureaucratic opposition in its attempt to implement radical reforms in the 1980s and France's decentralisation programme met severe obstruction in the absence of support from the civil servants. The monopoly of government in health sector in Scandinavian countries illustrates example of moderate reforms in the context of institution. The view of NPM- type reforms is offered by Batley and he summarizes the conclusions from a five year review in South Asia, Sub-Saharan Africa and South America, that the effect has been mixed at best with some improvements in inefficiency and mixed effects on equity( Manning, 2001, pp.301).
2.6. The example of U.K Agencification, downsizing of civil service in Australia and contracting out public services by New Zealand are illustrations of better performance of reforms in NPM birth countries. The quick adoption of NPM are due to well developed market system, established institution that encouraged a well disciplined and functioning bureaucracy (Agents) and a parliamentary system that encourage emergence of conscious political leadership (Principal). Another important context that determines easy acceptance of NPM is the rise of 'new expectation' from people for better service delivery. The voice of people motivates both the Political leaders (principal) and the bureaucracy (agents) for a change. The existence of weak institutions, influenced of patrimonial culture on institutions, weak economy and political system are responsible for the less service delivery in developing countries leading to an adoption of NPM- type reforms where changes do not affect institutional set up, cut backs or downsizing such as in soft sectors in tax reforms, waste collection, collection of user charges as these changes do not require drastic institutional change.
2.7. Another important context that determines the nature of reforms is the influence of culture towards authority, people at work, attitudes towards risk taking and attitude towards universality of cases. Cultural influence explains that developing countries under patrimonial tradition are unable to accept reforms quickly due to lack of formality and discipline.
3. Supporter of NPM: Capacity to Deliver
3.1. Institutional Capacity indicates levels of public management capacity, market development, resources, and political inclusiveness' legal effectiveness, political and economic stability. While in western developed countries, New Public Management emerged in the 1980s, to address the weaknesses of established bureaucracies, in developing countries the 'modern' state and its associated bureaucracies are never fully developed. In a sense, there was no proper 'old public administration for a' new public management to reform it. The state apparatus is still characterised by patrimonial, clientilistic and rent seeking features. The priority may be to reform the state itself to enable to perform its basic roles. Weak capacity in developing countries is further weakened by donor's conditionality on downsizing and offer of retrenchment that lead to massive brain drain in Mozambique, Tanzania and Uganda (Ole Therkildsen cited in Bangura, 2006).
3.2. Governments in developing countries may be ill equipped to adopt unfamiliar approaches to public service provision, where the conditions on which the new management practices are premised may not be present. In the health sector, there has been significant deconcentration of provision and management responsibilities, as well as delegation of budgets to field units at sub-national levels in both Ghana and Zimbabwe. Although decentralisation has brought greater share of resources to lower units and frontline managers, improvement in health outcome is very slow. Improvement in performance is partly hampered by weak management systems, e.g. budgeting, planning and human resource management. Another weakness is when adequate managerial freedom are not granted to managers as illustrated by Srilanka's Paddy Marketing Board, Ghana's Food Distribution, and Zimbabwe's grain marketing Board, the performance is poor due is due to lack of financial independence, political interference, corruption and weak leadership( Batley and Larbi cited in Bangura, 2006). According to the findings of Batley and Larbi, decentralisation in the health sector in India and Srilanka is slow due to opposition of bureaucrats. Sri Lanka has better health indicator due to its primary health care and female literacy whereas its slow progress in other sectors are due to weak management. Experience in Latin America illustrates that occurrence of NPM-type reform is obstructed by traditional administration and absence of career system bureaucracy. In Eastern Europe, the former Kazakhstan and Africa, autonomisation is used as an escape to an inevitable closure rather than as a device of improving efficiency (Manning, 2001).
3.3. Closely associated with NPM is the increasing use of market type mechanisms (OECD, 1993, Walsh, 1995) of contracting out services where privatisation is not possible and of charging user's fees for the purpose of resource mobilisation, raising consciousness of cost and improving service quality. The weak capacity to design effective users charges often lead to problem of equity issues, and with heavy transaction cost, lack of skill in contracting out services often outweighs the gained efficiency and lack of trust promotes corruption. In Ghana and Zimbabwe, India (Pune) user fees and charges include exemption systems, but it failed to protect equity due to poor capacity to design effective system. (Batley and Larbi cited in Bangura, 2006). Recently in India, the successful completion of construction of a world top class international airport at Delhi by the private contractors evidenced a strong and clear support of government in the success of Public Private Partnership. This drives to the key conclusion that private sector works best where government sector works.
3.4 Performance measurement is devised to strengthen the principal-agent accountability. Ghana, Tanzania, and Uganda's performance measure performance of Finance Ministries and line ministries (Therkilsden, 1999 cited in Bangura, 2000), Ghana's civil service performance 1995, audit institutions (National Audit Office in U.K), performance contracts and performance evaluations in the most advance and some developing countries are examples to cite. However, in all of these cases, weak capacity causes inability to define what good performance means (Therkilsden, cited in Bangura, 2006).
4. Booster of NPM: Rising New Expectation
The rise of NPM theory is associated with increasing popular and intellectual disenchantment with the growth and role of government and shift towards privatisation (Hood, 1991). The new doctrine is based on the economic theory of 'Public choice' influenced by Niskanen (1971), Buchanan (1975) and Mueller (1979) and founded upon the theory Principal - Agent theory (Lane, 2000, Stieglitz, 1987, Walsh, 1995). The principal's main concern is to control and incentivise the agent to improve service delivery and accountability through allocative efficiency and managerial freedom (Harding and Prekker, 2002, Lane, 2002). The principal could motivate the agents because of pressure from public having new expectation (Manning, 2001). In order to hold the agents accountable, new public expectation must exists to motivate the principal, and 'public service ethos of the old discipline must be in place to make the agents responsible.
4.2. However, developing countries as mostly characterised by marked absence of citizen's group to express the rising expectations, well developed bureaucracy to enforce the discipline, mature market to infuse the spirit of competition and historical/ cultural backgrounds that readily accepts the change, explain the reasons of difficulty to transplant the NPM theory away from its birth place to developing countries. NPM conceived as a device for improving efficiency and responsiveness to political principals had its origins in parliamentary democracies with curiously strong executive powers, centralised governments and little administrative law. The rising public expectation comes from citizens as angry customers could be nurtured politically as a continuing source of pressure for public sector performance. This understanding conveys that the absence of active group of is one of the reasons for the difficulty in implementation of NPM in developing countries from conceptual perspectives. In the context of India, however though there is strong presence of the active citizen's group, it is confined mostly to the upper elite middle class and the well structured bureaucracy that has become overtime a culture based system is unwilling to motive any reforms.
5. Buster of NPM: Lack of Capacity to meet Expectation
5.1. The complexities and challenges of modern science and technology increased the level of human desire and that finds expression of the desire through the window of 'access' and 'exit' in democratic governance. The expression of choices propelled the administrative science to change from a formal rigid approach to an agile approach and radically transform the delivery to meet the need of growing high expectation. The high expectation compelled the transference of responsibilities to the nearest point of delivery and in the extreme form it meant a complete surrender of control as in privatisation and deregulation. The high expectation led to intensive Agencification and Privatisation through the devolution, deregulation, decontrol and contract. The devolution of powers and control to the delivery points encouraged profit motive in return for the efficient delivery. The process of devolving more and more powers downwards focussed on the change to bring effective delivery and it gradually begins to miss the control needed to bring the change effective.
5.2. The NPM was useful to the extend the profit compensates the delivery and though doubt exists earlier on the efficient delivery being compromised at social cost, the intense criticism of NPM is precipitated in the context of the global down turn. The theory behind NPM is that the purchaser-provider split gives government the potential for stronger control (through regulation, incentives and policy frameworks) over agents. It envisaged efficiency of market under the fiscal constraints. However, the complete surrender of freedom to the agents reflected in the absence of policy guidance to supervise and monitor the excessive behaviour and the absence of risk assessment and mitigation plan to include securitisation of the risk reveals the contradiction of the theory in practice thus reducing the capacity of the government to oversee the delivery. In the absence of oversight from government, the attention span of the delivery agents could not go beyond themselves as they are allowed to focus singly on the delivery as an investment return. The rising expectation led to growth of NPM but lack of capacity in the government to meet the rising expectation busted the NPM in certain cases. In the context of the current global crisis, the prediction for the end of NPM era similar to the end of Socialist Institution may not hold ground reality because, the latter lost legitimacy, but the former, though reacted to in varying responses is rooted to the human needs and has not lost legitimacy. The NPM is busted but is not out.
6. Beyond the NPM: The Pendulum Clock?
6.1. NPM in the context of the current global crisis is an intellectual discourse with cynicism that sometimes blame NPM as the cause of the crisis or even a defaulter to be dammed while others critique NPM as inadequate and search for an alternative for the beyond NPM. The validity of these stated points may be explored.
Firstly, NPM as a concept evolved from the previous administrative science aided the innovations of tools to meet the challenges of public expectation. The tools invented and innovated in different shapes and sizes to meet the rising expectation in different context, however similar or different they may be, work only in the old discipline. The lack of regulation from the government to supervise and monitor spiralled a single hazard to a global affair stands evidenced widely on this proposition.
Secondly, NPM as conceived to help develop the tools to deliver faster and better with scale of economy was driven too hard beyond capacity. It means that the demand for increased efficiency would need corresponding increase in enforcement of discipline. In other words, the demand for increased efficiency leads to greater freedom of function, and this in turn requires deployment of greater discipline, accountability and transparency within the privatised or autonomous agency and an oversight from public policy. However, in practice, the NPM was over used under uncontrolled freedom of operation with focus of attention on the 'self' to get the best commercial exchange irrespective of how the delivery effect others. The lack of accountability in private sectors explains why privatisation becomes unpopular both in undeveloped and developed market as they focus only on themselves and failed to see the surroundings. Hence, NPM could not deliver without capacity.
Thirdly, NPM as a concept of management has innovated the new tools of management to promote greater degree of individualism and capitalism to obtain greater efficiency. In the process, the management tool has been overused by the user and it may be more prudent to determine how the tool is handled.
Fourthly, NPM as a concept has produced a paradigm of management that promotes inter-dependence and highly connected life and does not negate the principle of collective survival of humans. The human failure to comprehend the risk, inability to follow the basic premise of discipline, ethics and values and the tendency to restrict attention span on self has led to the accident causing a global depression. Human error is the risk to be concerned with than the tool.
The solution to the problem is not by shifting the blame on the tool that had helped in an appropriate context; the solution could perhaps be found in the NPM for better innovations and inventions beyond privatisation, deregulation, decontrol and devolutions. Historical experiences across culture and value have taught to avoid the extremes, the same historical circumstance arising from the global crisis now warn the vulnerable humans to maintain balance between freedom and control, capitalism and socialism and the old discipline and the new management as in 'Pendulum Clock' approach to swing from the right to left and in consonance with the complimentary approach resounded in the Chinese 'Ying and Yang' and to get back to the 'basic discipline' to move forward.
7. Role of NPM: Sustainability
Sustaining is about 'balancing' which reminds us of the old wise saying ' anything in excess is bad'; and excess is not caused by tools and technology, it is the human error, omission or commission that cause the excess and it is up to humans to reduce the excess or perish. If the goal of public policy is sustainability and the purpose is to 'balance', the requisite action therefore is to identify the technique and tool needed to increase the capacity to innovate to get the input-output-outcome. The concept of growth with limit does not negate NPM, the integrated approach to give a balance output is an NPM technique and the supervision and monitoring for accountability to give the desired outcome is a tool of NPM, it begs the question; if NPM is no longer relevant, can innovation for sustainability be possible without any of these tool and technique of NPM?
8. Conclusion:
8.1. While explaining the pace and nature of NPM in specific country contexts and in the context of the global crisis, the message emerging from the discourse is that NPM is not a new practice to replace the old discipline neither a platter of menu of reform nor the best option (Hood, 1991) or a tool that has outlived its life. NPM is a concept of management that has evolved from the old public discipline to aid innovation /reinvention to meet the challenges of rising expectations and requires the old premise in place for it to thrive. Without setting the basics right (Schick, 1998) and having the support of a motivated public (Manning, 2001) and capacity to deliver (Bangura, 2006), the cost of reforms often outweighs the benefit (Batley, 1999) and increased venue of corruption (World Bank, 1997) as in Africa, Asia and Latin America (Ole Therkildsen, Andrew Nickson cited in Bangura, 2006) and caused a colossal global downturn. Increased in effective service delivery without corresponding innovations to ensure the supervision and regulation of the financial institutions, the basic discipline of public administration was shaken and hence the survival and sustainability of NPM gets derailed.
8.2. It may be a narrow view to conclude that NPM has failed completely, for it has benefited many countries to move forward, although controversy surrounds some of the reforms in developing countries and even in NPM birth countries evidenced in the U.K railway privatisation issue the last few years. NPM may have failed to deliver its promises because of the context in which the reforms adopted vary, but its significance lie in the fact that it has opened a new vista of thought to reflect on what works in a given context and that the basic discipline needs to be in place for the reforms to works (Schick, 1998). The paper underlines the importance of 'context of reforms' and 'capacity to deliver' as also the importance of 'conceptual base', to enable us to understand why adoption of NPM is relatively successful in some countries and why NPM deliver less elsewhere, and shows the differing results in different countries emanating from different context and capacity to deliver. NPM as a concept innovate the tool to maximise the benefits of both the provider and purchaser, but the excessive use of the tool without corresponding increase in capacity to use the tool would failed the operation; the tool operator must understand his tool, choose his tool wisely and handle the tool. The tool cannot be accounted for human error, in fact the tool has aided man to progress and has opened a new vista of thought that taught us not to indulge in excesses and not to forget the basic discipline.
