“New Public Management” Douglas Brown Pols 341 March 2009

“New” Public Management Roots of New Public Management Objectives and Methods of Reform Outcomes and Criticisms The Next Generation of Reform

The Roots of New Public Management Four factors: An Old Paradigm in Gradual Disarray: 1970s and early 1980s An Old Paradigm in Gradual Disarray: 1970s and early 1980s Political and Economic Changes to old order Political and Economic Changes to old order Force of new ideas and ideology Force of new ideas and ideology Emergence of a new paradigm Emergence of a new paradigm

1. The Old Paradigm and Its Shortcomings Single, Integrated, Hierarchical Civil Service means delay, inflexibility Overly bureaucratic structure and culture Primary responsibility to Ministers alone State-owned monopolies stifle private initiative Results: Overload, Over-reach, Decline of trust

2. Changing Political and Economic Conditions Economic Decline of 1970s Fiscal Crisis: demands for government spending not matched by revenue growth Globalization: new pressures of competitiveness on both private and public sectors New technologies transform workplaces Neo-liberalism becomes dominant ideology

3. Advances in Theory Public Choice: self interest vs public interest assumptions Budget-Maximizing Bureaucrats Principal-Agent theory Microeconomics and the role of the state Managerialism: erasing the private/public distinction

4. Public Sector Reform as a Political Program Bottom-up USA practice (Osborne & Gaebler): mid-70s on Top-down UK: Thatcher “revolution” since 1979 “Forced” Fiscal reform: New Zealand 1980s, Canada 1990s Global advocacy and adoption: role of OECD, World Bank, IMF etc. role of OECD, World Bank, IMF etc.

Key Objectives (OECD summary) 1.Improving strategic oversight by elected politicians 2.Ensuring greater accountability for set objectives 3.Greater contestability and market competition for the provision of public goods and services.

Reform from Within -- Major Themes Steering, not rowing Devolution & deregulation of operations Managerial contracts Results-based accountability Performance measurement Program review and expenditure restraint

Reform through External Agents -- Major Themes AgencificationOut-sourcing Commercialization and privatization Partnerships Creating Internal markets

“Reforming the Culture ” Changing bureaucratic behaviour customer service customer service incentive structures incentive structures flexibility, creativity, risk-taking flexibility, creativity, risk-taking Seeking a comprehensive, not piecemeal approach Programmatic, not just budgetary

Reform/ Anti-Reform Coalitions Pro-reform: Ministers (eg Finance, Treasury Board) Ministers (eg Finance, Treasury Board) Central Agencies Central Agencies International Institutions International Institutions Consultants and Academics Consultants and AcademicsAnti-Reform: Public sector unions Public sector unions some line departments some line departments citizen and interest groups citizen and interest groups

Overall Claims Made for Reforms economic performance improved public sector productivity increased customer satisfaction attained or improved

Taking On the Assumptions… That civil service is self-interested That markets work better That public and private management is alike That politics can be ignored

Other Criticisms Weaker accountability to Cabinet Poorer coordination Capacity problems Equity concerns public service workers public service workers access and quality of service access and quality of service Damage to Public Service integrity and ethics

Beyond New Public Management? Time to evaluate outcomes and fine-tune reforms Redress the balance in some areas Restore public sector ethics Increase policy-making capacity Improve coordination and horizontality Or…more of the same ?

Cases Federal: Program review ’90s Program review ’90s Service Canada Service Canada Agencification Agencification Privatizations Privatizations

Cases -- provincial Program review: NS, Alberta PPPs – e.g. Cobequid Highway Prison privatization –Ontario Liquor stores privatization – Health care regional authorities

Cases -- Municipal Municipal mergers (e.g. Toronto, Montreal, Halifax) Waste management Private policing