New Public Management

… a core concept in Governance and Institutions and Atlas100

Concept description

Donald Savoie (reference below) describes new public management (NPM) as “a public sector management theory that sought to make government more efficient and responsive by employing private sector techniques and creating market conditions for the delivery of public services.”

Main features of new public management

Leslie Pal (reference below, p. 28) describes the main features of new public management as follows:

“Primarily, there was a belief that what Barzelay (1992, p. 5) calls the “bureaucratic paradigm” of carefully defined roles, reliance on rules and procedures, line and staff distinctions, tight financial control, and central agency oversight, should be replaced with a more client-focused, service-oriented system. Bevir, Rhodes, and Weller (2003) highlighted the following features of new public management:

The term refers to a focus on management, not policy, and on performance appraisal and efficiency; disaggregating public bureaucracies into agencies which deal with each other on a user pay basis; the use of quasi-markets and of contracting out to foster competition; cost-cutting; and a style of management that emphasizes, among other things, output targets, limited term contracts, monetary incentives and freedom to manage…. It is said to be a global phenomenon. (pp. 1–2)

“One of the most widely read gospels of NPM thinking was in a 1992 book entitled Reinventing Government, by David Osborne and Ted Gaebler. The most important aspect of the book’s argument was its rejection of the hierarchical architecture of most government bureaucracies. Close accountability requires close scrutiny and a minimum of bureaucratic discretion. This traditional system of public administration has many benefits, but it is also, in large part, responsible for the stereotypical inflexibility and unresponsiveness of government bureaucracy. The result very often is costly, lumbering organizations that are driven by rules rather than results. Creativity is stifled, problem solving is discouraged in favour of following routine, and significant resources are devoted simply to managing people within the system, rather than achieving policy goals. Osborne and Gaebler distilled 10 principles of reinventing government from the cases they reviewed. These principles were grounded in the assumption that government is necessary, but it does not necessarily have to act like government.

Most entrepreneurial governments promote competition between service providers. They empower citizens by pushing control out of the bureaucracy, into the community. They measure the performance of their agencies, focusing not on inputs but on outcomes. They are driven by their goals – their missions – not by their rules and regulations. They redefine their clients as customers and offer them choices – between schools, between training programs, between housing options. They prevent problems before they emerge, rather than simply offering services afterward. They put their energies into earning money, not simply spending it. They decentralize authority, embracing participatory management. They prefer market mechanisms to bureaucratic mechanisms. And they focus not simply on providing public services, but on catalyzing all sectors – public, private, and voluntary – into action to solve their community’s problems. (Osborne & Gaebler, 1993, pp. 19–20)”

See also Kernaghan’s Bureaucratic/Post-bureaucratic Framework.

NPM reforms in developing countries

Describing the application of new ublic management techniques in the developing world in the 1990s, George Larbi (reference below) has written:

“NPM reforms have been driven by a combination of economic, social, political and technological factors. A common feature of countries going down the NPM route has been the experience of economic and fiscal crises, which triggered the quest for efficiency and for ways to cut the cost of delivering public services. The crisis of the welfare state led to questions about the role and institutional character of the state. In the case of most developing countries, reforms in public administration and management have been driven more by external pressures and have taken place in the context of structural adjustment programmes. Other drivers of NPM-type reforms include the ascendancy of neoliberal ideas from the late 1970s, the development of information technology, and the growth and use of international management consultants as advisors on reforms. Additional factors, in the case of developing countries, include lending conditionalities and the increasing emphasis on good governance.

“Until recently, NPM was largely seen as a developed country, particularly Anglo-Saxon, phenomenon. The 1990s have, however, seen applications of variants of NPM techniques and practices in some developing and transitional economies. Elements discussed in this paper include management decentralization within public services, downsizing, performance contracting, contracting out and user charges. These are being applied in crisis states, but not in a very comprehensive and consistent manner.

“Downsizing and user fees have been most widely introduced, especially in Africa, and have been closely associated with structural adjustment programmes. Autonomous agencies within the public sector are being created in some countries. Examples include autonomous hospitals in Ghana, Zimbabwe and Sri Lanka, as well as the hiving-off of the customs and excise, and internal revenue departments to form executive agencies in Ghana and Uganda.

“Performance contracting and contracting out have become common policy options in a number of crisis states. The latter has been adopted as an instrument to reform state-owned enterprises (SOEs), granting SOE managers more operational freedom while holding them accountable for the performance of the enterprises through a system of rewards and sanctions. Performance contracts are used across a number of sectors including utilities, transport, telecommunications and agriculture (e.g., in Ghana, Bolivia, Senegal and India). Contracting out is increasingly being adopted in the delivery of public services including urban services (e.g., solid waste management), ancillary health services such as cleaning, laundry and catering (e.g., in Zimbabwe), and road maintenance.

“While the adoption of these NPM practices seems to have been beneficial in some cases (e.g., cost savings in contracting out road maintenance in some African countries and in Brazil), there are both potential for and real limitations to applying some elements in crisis states. The limited experience of NPM in such states suggests that there are institutional and other problems whose persistence may be binding constraints on implementation. The capacity concerns include the ability to manage a network of contracts, the development of monitoring and reporting systems, and the difficult governance and institutional environment which may constrain implementation capacity.

“While the new public management approach may not be a panacea for the problems of the public sector in crisis states, a careful and selective adaptation of some elements to selected sectors may be beneficial.”

Topic, subject and Atlas course

Modernizing Government in Governance and Institutions and Atlas100.


Donald J. Savoie (2003), Breaking the Bargain: Public Servants, Ministers and Parliament. Toronto: University of Toronto Press, pp. 337.

Leslie Pal (2014), Beyond Policy Analysis – Public Issue Management in Turbulent Times, Fifth Edition, Nelson Education, Toronto. See Beyond Policy Analysis – Book Highlights. References cited in the Pal excerpts above are:

Barzelay, M. (1992). Breaking through bureaucracy: A new vision for managing government. Berkeley, CA: University of California Press.

Bevir, M., Rhodes, R. A. W., & Weller, P. (2003, March). Traditions of governance: Interpreting the changing role of the public sector. Public Administration, 81(1), 1–17.

Osborne, D., & Gaebler, T. (1992). Reinventing government: How the entrepreneurial spirit is transforming the public sector. New York, NY: Penguin.

George A. Larbi (1999), The New Public Management Approach and Crisis States, United Nations Research Institute for Social Development, at, accessed 28 August 2016.

Page created by: Ian Clark, last modified on 28 March 2017.

Image: Mika Harju-Seppänen, New Public Management testiversio, at, accessed 28 March 2017.