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Concept
New Public Management
Summary
New Public Management (NPM) is an approach to running public service organizations that is used in government and public service institutions and agencies, at both sub-national and national levels. The term was first introduced by academics in the UK and Australia to describe approaches that were developed during the 1980s as part of an effort to make the public service more "businesslike" and to improve its efficiency by using private sector management models.
As with the private sector, which focuses on customer service, NPM reforms often focused on the "centrality of citizens who were the recipient of the services or customers to the public sector". NPM reformers experimented with using decentralized service delivery models, to give local agencies more freedom in how they delivered programs or services. In some cases, NPM reforms that used e-government consolidated a program or service to a central location to reduce costs. Some governments tried using quasi-market structures, so that the public sector would have to compete against the private sector (notably in the UK, in health care). Key themes in NPM were "financial control, value for money, increasing efficiency ..., identifying and setting targets and continuance monitoring of performance, handing over ... power to the senior management" executives. Performance was assessed with audits, benchmarks and performance evaluations. Some NPM reforms used private sector companies to deliver what were formerly public services.
NPM advocates in some countries worked to remove "collective agreements [in favour of] ... individual rewards packages at senior levels combined with short term contracts" and introduce private sector-style corporate governance, including using a Board of Directors approach to strategic guidance for public organizations. While NPM approaches have been used in many countries around the world, NPM is particularly associated with the most industrialized OECD nations such as the United Kingdom, Australia and the United States of America.
Official source
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