The NPM approach to the organization of public structures creates various debates on its efficacy and its visible implications. Such management aims to improve the quality of public services by borrowing managerial ideas from the private sector. While active variations of the NPM have a decent theoretical base and are widely implemented in public-private governance, the new managerial methods may cause more result.
At first, there is a need to identify the origins and pillars of New Public Management. Although the NPM variations have been proactively used in several countries since the 1980s, the term does not have its precise definition (The New Public Management and public management studies, 2017). Taking into consideration expanding the theoretical basis of the phenomena core principles of the NPM (Denhardt & Denhardt, 2015), its approximate definition can be formed. Hence, the NPM is a set of paradigmatic actions aiming at the constant improvement of the public organizations’ management for increasing their efficiency, citizens-oriented service, and quality. One study summarizes the underlying theories of the NPM which are public choice and agency theory (The New Public Management and public management studies, 2017). The public choice theory implies the governmental structures allow the market to decide what is needed and refrain from imposing (The New Public Management and public management studies, 2017). The agency theory states that the principal-agent relationship in the public structures should be formed contractually so that each agent has his or her own responsibilities against the prior (The New Public Management and public management studies, 2017). The theories above give the foundation for the NPM methods to upgrade traditional management by adding private-alike flexibility and operational control to the public organizations, opposite to inefficient bureaucracy.
As long as the values and goals of NPM require the public structures to increase their efficiency, the various methods of innovation are implemented. Among other areas, the novelties of the NPM concern governance of public-private relationships. For instance, privatization is considered a hallmark of the NPM (Denhardt & Denhardt, 2015). If the public units lack required capabilities or expertise in providing a demanded service, they can delegate a service creation to the private companies with a broader range of experience in such area, where the privatization appears (Denhardt & Denhardt, 2015). Another option is to create a business-based public unit reacting to economic stimulations and participating in competition among the private organizations, the purpose of which is to foster industry competition (Denhardt & Denhardt, 2015). The other high-referred method is encouraging citizens’ participation in the process, and it showed a decent degree of success (Denhardt & Denhardt, 2015). By implementing new approaches, the NPM stimulates public and private integration, as the main purpose of the management is to increase the effectiveness of public services.
The NPM is a set of methods widely used in different countries. As it is mentioned previously, the engaging of citizens is a widely used feature of the NPM. A significant example of its usage is a complex of measures in New York after the 9/11 attack. Several strategies involving citizens’ participation of the WTC reconstruction were held, from which “Listen to the city” project was the most innovative (Denhardt & Denhardt, 2015). The NPM is a forward-looking strategy, but, today, it has more efficient alternatives, and the main is the New Public Service (Denhardt & Denhardt, 2015), which centers citizens as main recipients of the governmental services and rather implies listening to the community than dictating its regulations. As it is seen, the NPM yield to new alternative proactive theories.
Summarizing, if compared to the preceding public management model, the NPM has considerably succeeded. Its theory covers basic psychological motivation, and its implementation has spread in the public governance, but the NPM set of instruments has prior to it approaches nowadays. If used rationally, they can increase the efficiency of the public sector and move to a new level of public-private relationships.
Denhardt, J. V., & Denhardt, R. B. (2015). The new public service: Serving, not steering (4th ed.). New York, NY: Routledge Taylor & Francis Group.
The New Public Management and public management studies. (2017). Oxford Research Encyclopedia of Business and Management. Web.