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New Public Management Essay

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New Public Management

Public sector reforms adopted in a number of countries such as USA, UK and New Zealand in the last fifteen years and characterised by efficiency units, performance management, contracting out, market type mechanisms, and agency status have come to be known as the New Public Management or NPM. Appearance of the NPM as shifting the paradigm from the old traditional model of administration has been promoted by a remarkable degree of consensus among the political leadership of various countries and is presented today as the major tool for public sector management reforms.

The elements of NPM have been implemented in diverse forms in different countries depending on their historical nature of bureaucracy and public …show more content…

THE NEW ZEALAND MODEL OF PUBLIC MANAGEMENT

The proponents of the New Public Management have often identified New Zealand as a good example of this contemporary mode of administrative reform called NPM. New Zealand has implemented an enormous number and range of management reforms since 1988. These include accrual basis accounting and appropriations. Budgeting for outputs rather than inputs, separation of service delivery functions from advisory and regulatory functions, replacing permanent department heads with chief executives appointed for a fixed term, discretion for managers to spend their operating budgets as they deem fit, individual employment contracts for most senior managers, annual purchase agreements between ministers and their departments, annual reports, and audited financial and performance statements (Schick 1998:2).

Every element of reform has been designed to establish or strengthen contract-like relationship between the government and ministers as purchasers of goods and services, and departments and other entities as suppliers. This ‘new contractualism’ replaced the relational contracts that characterise traditional public administration (Schick 1998:3).

Managerial reform is based on a simple principle: managers cannot be held responsible for

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