New Public Management (NPM) is a global paradigm in lieu of traditional public administration. There was hope that gradually NPM would solve core problems of traditional public administration accepting market management tool in public service delivery. On that sense, NPM holds market friendly principles as a conception. Since its emergence, a long time has already passed and we have seen a lot of practice of NPM in both developed and developing countries. All the way through its emergence and implementation, NPM faced a lot of criticisms. The question is, NPM is here to stay or not until we focus on market. This study is conducted to know the answer by reviewing existing literatures on NPM. As market economy is a reality and almost every powerful world leaders have taken it positive, crises in market is not going to be a great concern. Besides, now there are no such alternative that can occupy the place NPM is holding. So, as long as market remains in our policy, obviously there will be NPM as an effective concept.

1. University of Dhaka
Course name: Introduction to Public Management
Course no: PA-321
Topic -5
“NPM is a reality, it has come to stay and as a conception it will continue to
dominate as long as market remains our focus of attention”
Explanation of this statement
Submitted to:
Dr. Mobasser Monem
Professor
Department of Public Administration
Submitted by:
Md. Ashiki Elahi Zim
B.S.S. Honors, Roll: 87, 6th
Semester
Date of Submission: October 26, 2014.

2. - 1 -
Contents
 Abstract Page: 02
 Introduction Page: 03
 Objectives andmethodology Page: 03
 A shift toNPM Page: 03-04
 New Public Management, is it a reality? Page: 05
 Effectiveness of NPM;focusing market principles Page: 05-09
 Concluding Remarks Page: 09-10
 References Page: 11-12
 Table: Public Administrationvs NewPublic Management Page: 04

3. - 2 -
Abstract
New Public Management (NPM) is a global paradigm in lieu of traditional public
administration. There was hope that gradually NPM would solve core problems of
traditional public administration accepting market management tool in public
service delivery. On that sense, NPM holds market friendly principles as a
conception. Since its emergence, a long time has already passed and we have
seen a lot of practice of NPM in both developed and developing countries. All the
way through its emergence and implementation, NPM faced a lot of criticisms.
The question is, NPM is here to stay or not until we focus on market. This study is
conducted to know the answer by reviewing existing literatures on NPM. As
market economy is a reality and almost every powerful world leaders have taken
it positive, crises in market is not going to be a great concern. Besides, now there
are no such alternative that can occupy the place NPM is holding. So, as long as
market remains in our policy, obviously there will be NPM as an effective concept.

4. - 3 -
Introduction
It took more than a century to articulate the essence of public administration as a field of
study and profession based on its own assumptions, principles, and norms distinguished
from those in politics and business (Haque, 2004). And public administration commenced
with “The Politics/Administration Dichotomy”. From then, a long time has passed with a
variety of ideas, concepts and discussions. World has already seen the multiplicity of
concerns about public administration discipline over time. So, public administration is a
diversified, broad and dynamic discipline which changes its focus of attention keeping pace
with the changing world. And, the concept of New Public Management came to bring
change in Public sector management and to facilitate providing governments’ service to
citizens as well. NPM as a concept was born in the article by Christopher Hood in the journal
Public Administration in 1991. For Hood the basic idea was a shift in values in public service
delivery, moving towards efficiency, markets and managerialism (Greve, 2010). NPM was,
on the one hand, a fashion phenomenon within public-administration scholarship and
practice; on the other, it was a genuinely ideological concept (Powell and de Vries 2011).
NPM emerged in Anglo-America and further spread by some Anglo-American institutions
like the World Bank and the IMF and has its base in privatization. So, it focuses “making
available the human and technological resources that managers need to perform well; and,
appreciative of the virtues of competition, maintaining an open-minded attitude about
which public purposes should be performed by the private sector, rather than the public
sector (Borins, 1995).”
Objectives and Methodology
This paper is completely prepared using secondary sources of data. It is based on the review
of related books, journals, articles and relevant documents available online. The key
objective of this paper is to explain the statement, “NPM is a reality, NPM has come to stay
and as a conception it will continue to dominate as long as market remains our focus of
attention” and to come into a conclusion of the whole.
A shift to NPM
Since long, governments of many developed countries were being criticized for the nature
of being too bureaucratic, too huge, inefficient, ineffective and corrupt. The degree of
accountability was decreasing and people were losing trust upon government. Many
scholars blamed traditional model of public administration for such distrust. They were
pursuing a new idea, a new model to adapt in government. That pressure brought a new
conception of New Public Management in 1980s. The belief that large and monopolistic

5. - 4 -
public bureaucracies are inherently inefficient was a critical force driving the emergence of
the New Public Management in the 1980s. To reconfigure the state along more cost-
efficient (and effective) lines, NPM protagonists recommended that the public sector be
opened up to greater private sector influence (Hood, 1991; Andrews and Walle, 2012). And
later, it replaced traditional public administration to make government more effective and
efficient. In the 1990s the NPM has emerged as an alternative model against public
administration’s traditional bureaucratic paradigm (Hughes, 1994). The reason is the nature
of this conception. NPM focuses on what government ought to do, making the work better
and solving the key problems of government as good as possible. That is why, the traditional
public administration has been inevitably replaced new public management as a tactic.
Traditional Public Administration NewPublic Management
Sl.
No.
Elements New Public Management
Traditional Public
Administration
1
Government
Organization
Break-up of traditional
structures into quasi-
autonomous units
Services provided on a uniform
basis operating as a single
executing unit
2
Control of Public
Organizations
Hands-on Professional
management with clear
statement of goals and
performance measurement
Control from the headquarters
through the hierarchy of
unbroken supervision and
checks and balances
3
Control of
Output Measures
Stress results and output
control rather than procedures
Control on inputs and
procedures
4
Management
Practices
Using private sector
management style
Standard established
procedures throughout the
service
5
Discipline in
Resource Use
Check resources demands and
‘do more with less’
Due process and political
entitlements
Table: Public Administration vs. New Public Management (Araujo, 2001)
Market
Management

6. - 5 -
New Public Management, is it a reality?
‘New Public Management’, commonly known as NPM has been presented as a ‘global
paradigm’ replacing traditional public administration and moving swiftly from one country
to another, manifesting a kind of global demonstration effect (Osborne/Gaebler, 1992;
Nunberg, 1992; OECD, 1995). It is not that concept limited in theory; it has come to be
practiced in reality. We have already seen a wide range of NPM practice around the globe.
In the very beginning, NPM has been exercised in the developed countries as it has emerged
from a developed country’s thought. Australia, Canada, Denmark, Finland, Ireland,
Newzealand, Sweden and United Kingdom have already adapted NPM. The way of adapting
NPM in public sector is not the same in all these countries. In Australia and USA, NPM is
used as a form of new managerialism and new contractualism; and the model of
autonomous agency in UK, the framework of alternative service delivery in Canada all
represent “Letting managers manage” technique. Newzealand adapted NPM focusing on its
contractual side and in Malaysia, NPM reform denoted by client’s charter. Besides,
capitalist countries like Austria, France, Germany, Italy, Japan, Netherlands, Norway,
Portugal, Spain and Sweden has adapted NPM model of governance. Among them, some
are reluctant reformers though. Not only in Developed countries but also NPM has spread in
developing countries in Asia, Africa, and Latin America, and transitional societies in Eastern
Europe. The governments may not be same in governing principles in all these countries but
they all have adapted the conception of NPM fully or partially. That obviously mean, NPM
has already got practiced a lot in reality across many countries in the world with enormous
diversity.
Effectiveness of NPM focusing market principles
NPM has its root in ‘Neo-liberalism’. At the micro-management level, the neo-liberal
inclination of NPM is reflected in its neo-managerial administrative setup based on
organizational principles, leadership styles, and corporate experiences borrowed from the
business sector (Haque, 2004). Neo-liberalism, the term which is about to lose its popularity
now-a-days, known as laissez faire economics is a comprehensive package of economic
liberalizations, privatization, free trade, open markets, deregulation, and reduction in
government’s expenditure to treat market as superior and to facilitate market driven
economy where government administration will work as a monitor. Jouke de Vries stated,
“The Keynes theory was attacked by three alternatives: monetarism, supply-side economics
and public choice theories. The combination of these ideas is collectively known as neo-
liberalism.” The package contains some ideas driven from Margaret Thatcher of United
Kingdom and Ronald Regan of United States. At a higher level, that of theory, concept, or
paradigm, NPM is the transfer of business and market principles and management
techniques from the private into the public sector, symbiotic with and based on a neo-

7. - 6 -
liberal understanding of state and economy (Cf. Powell and de Vries 2011; Pierre 2013) and
The two dimensions of NPM are - the use of market mechanisms and market-based
governance in public service delivery (Donahue and Nye, 2002), and the use of private
sector management techniques. It brings ‘greater competition in public service provision’.
This has important implications for both public service providers and users. On the provider
side, public service delivery agencies, through market forces, will supposedly be compelled
to improve the quality of service. On the customer side, the member of the public is
supposedly transformed into a consumer with rights in the new public sector marketplace
(Hood, 1994). New public management includes the basic theme of economic principles
based on Public choice theory and managerialism. Public choice is a contemporary field of
discourse about government with wider concern that management, whereas managerialism
is a field of discourse initially meant to apply to organizations in the private sector
(Kalimullah, Alam and Nour, 2012).
Interestingly, the innovators of NPM are capitalists and this NPM concept first spread in
other capitalist countries. The organizations worldwide, representing capitalistic view, are
also responsible for spreading NPM around the universe. Organizations such as, World bank,
the International Monetary Fund, the World Trade Organization, the Asian Development
Bank and others played a dominant role in advocating NPM-style reforms for developing
nations. These international organizations more or less imposed market-biased public sector
reforms on developing nations with NPM. Actually, this happened under the pressure of
neo-liberal policy holder capitalist nations while giving grants or financial aid to those
countries. The globalization of economy with increasing competition has become order of
the day.…It has become inevitable to liberalize the economic sector following heavy burden
being imposed upon the national exchequer as a result of mismanagement, corruption,
inefficiency in resource management, bureaucratic bungling etc (Kalimullah, Alam and Nour,
2013). NPM became inevitable to implement because of the market-friendly ruling classes in
developed capitalist nations. Actually, their focus was on market and that is why their target
was to reduce the scope and role of public bureaucracy, transfer resources and services
from the public sector to the private sector, and restructure the public service in the image
of business management, because the business sector was believed to be more competitive,
productive, efficient, innovative, responsive, and customer-friendly (Haque, 2004). This
indicates the political agenda behind adaptation of NPM and it became more effective by
media publicizing the private sector failure and the success of market economy and market
forces.
The countries adapted NPM model in government has already got outcomes of it and those
outcomes also have a lot of variety. Comparing a country to another on the basis of
administration is not very easy work to do. OECD has done a research on eight countries.
One of its conclusions is, “It should be recognized that in spite of similarities, the differences
between the central governments in the sample countries are vast. They are the result of
long historical and national resources, which have given the rise to a wide variety of public

8. - 7 -
policies and government structures (OECD, 2010, p. 22).” OECD found in Netherlands that
“In the last few years, though, some governments realized that not everything about NPM
had worked out as intended, as staff levels had increased in all task areas, especially in the
area of support services. In addition, there were many problems with output steering and
control.” There is a big positive impact on the operations of government in New Zealand,
Malaysia and Canada. In UK and Australia, it can be said that there have been modest and
positive impact on operations of the government and little impact can be found in the USA.
In many countries, positive results are seen like improving performance, reducing the size of
public service by withdrawing personnel giving a handsome amount as pay damages though
some societal problems are there. Total quality management in Malaysia (Common, 1999);
the results-oriented management initiative in Uganda (Langseth, 1995); and the wholesale
restructuring of Chilean education along internal market lines, a far more radical change
than anything tried in the UK (Parry, 1997) represent some different practices of NPM
having a lot of controversy. Sometimes, it has called that ‘NPM is a slippery label’ (Manning,
2000). NPM has been blamed for its focus on individual rights rather than collective rights,
its belief in individual self-interest as a key guiding principle and its strong reliance on
markets as a core steering mechanism (de Walle and Hammerschmid, 2011). Managers are
given freedom to take own decision without any interference of Political persons and they
are the target of NPM. Greve states, Although it was not a holistic design, had a focus on the
main challenges (get a better economy going and save money instead of expanding
budgets), the public manager as the main driver of change, the introduction of the market-
based governance as the main governing mechanism, a conception of the citizen as mainly
as a consumer that craves value for tax payers money in the service delivery, and the
accountability through results that public managers were directly answerable for (Greve,
2010).
Considering the negative or less beneficiary results of NPM reforms, some organizations and
some scholars saw NPM as a conception on demise. OECD stated that, “Economic neo-
liberalism is currently in deep trouble as a consequence of the worldwide financial crunch.
After more than 30 years of ideological hegemony, neo-liberalism today seems powerless to
explain developments in the real world. Does this also have an effect on the ideas of new
public management, clearly an offspring of neo-liberalism?” (OECD, 2010) Terry shows that
NPM and “the blind application of business management principles and practices can
undermine the integrity of public bureaucracies and so threaten our democratic way of life”
(Terry, 1999). NPM is against social justice and human rights and draws a very long bow in
linking NPM to the terrorist attack on the World Trade Centre in 2001, as well as the
collapse of Enron (Argyriades, 2003). New public management is dead and ‘digital-era
governance’ (DEC) is there to be taken now (Dunleavy, 2005). The main argument Dunleavy
further stated behind this was - the intellectually and practically dominant set of managerial
and governance ideas of the last two decades, new public management (NPM), has
essentially died in the water. This cognitive and reform schema is still afloat, and minorities

9. - 8 -
of its elements are still actively developing. But key parts of the NPM reform message have
been reversed because they lead to policy disasters, and other large parts are stalled
(Dunleavy, 2005).
All those criticisms of NPM lead some social scientists to seek new models of running the
government better for citizens with greater effectiveness and efficiency. New public
management is in danger, but it is not really dead. There are some considerably new ways
of thought (OECD, 2010). Now, below discussed are some conceptions from academic
studies of different scholars:
DEG
ICT was a part of NPM thought but this component did not get enough attention while
implementing NPM. Digital Era Governance focuses on the digitized governance to serve
citizens fast and make them technologically skilled. It (DEG) is an alternative to new public
management as Dunleavy’s thought. This model has set out some important ideas like:
 Reintegration
 Needs-based holism
 Digitization changes
This model is nothing but a part of the new public management movement. So, only this
one model cannot replace the model of NPM.
New Public Governance (NPG)
“Whatever happened to public administration?” asked H. George Frederickson (2005) and
answered himself: “governance, governance everywhere” in the Oxford Handbook on Public
Management. NPG is said to be more holistic and focuses on the importance of
collaboration in the universe. It targets governance more than government emphasizing
networks, partnerships and services by collaboration. Lynn and colleagues use the concept
of governance or public governance as the starting point when describing relationships
between actors in society, including the politicians and public managers (OECD, 2010).
Public Value Management (PVM)
Public sector and private sector is very different regarding management principles but the
role of managers should be considered. Public managers are doing the job there which is
evaluated by both politicians and citizens. Mark H. Moore, a distinguished scholar worked
on public managers and his answer was that public managers are engaged in “creating
public value” (Moore, 1995). There are a lot of viewpoints on PVM like post-competitive

10. - 9 -
government, relationship building, service outputs, satisfaction, legitimacy, outcomes and
trust, multiple accountability systems, menu of alternatives in delivery system.
Other Theories
Jouke de Vries stated in OECD journal that the aim to make more use of the newest
technologies to improve the relations between the state and the citizens, there are four
other avenues of thought at this moment breaking out of the NPM cocoon:
1. The New Weberian state which aims to restore the legitimacy of the state by placing
more emphasis on non-economic values and societal problems;
2. The government-governance theory about vertical and horizontal steering within the
so-called network society;
3. The “glocalisation” theory-the word refers to a combination of globalization and
localization processes – which analyses the relations between the national state and
international organizations on the one hand and regional and local organizations n
the other;
4. Theories about new combinations between the state, civil society and the market.
However, at this time, we are not sure if any of these avenues will eventually lead to a
paradigm shift. So, NPM is not really dead: parts of it are still very much alive (OECD, 2010).
Crises can be called as part of market economy, and in that sense, capitalism has showed
that it is very durable in the course of time (OECD, 2010). Besides, NPM principles are more
or less market oriented and so, market will define on which way NPM will go. Salwa Akhter
stated, “Since NPM principles are essentially market oriented, both developed countries in
our analysis well-adapted to this condition due to the presence of well-functioning markets
and sufficient economic development”.
Concluding remarks
Lan and Rosenbloom (1992) observed that the core aim of market based Public
Administration approach is that Public Administration can achieve its historic quest for both
efficiency and responsiveness to the public through competitive market-like practices.
However, NPM, market based approach came for the betterment of citizens of a country.
How it is practiced or criticized is not the fact, we cannot deny the changes it has brought.
Some told, “The changes fashioned by New Public Management are now probably
irreversible. Scholars argue that the new managerialism ideas are new, even some of the
aspects are not. The new managerialism is ‘hype’ rather than ‘substance’ and nothing has
really changed (Kalimullah, Alam and Nour 2013).” Though the NPM paradigm is in trouble,
it is still far too early to speak in terms of a third order change, and keeping in mind the fact
that a traditional paradigm never completely disappears. For instance, we don’t know how
long the financial crisis will last. We have already seen that there are some alternative

11. - 10 -
theories, but they are not the alternatives to the main thoughts behind the NPM reforms.
Yet, in many parts of the world, and particularly in policy, NPM is very alive and very much
kicking, even as a theory – and the more so further one departs from academe, Europe or
international and central government. But this is also true on the level of European
countries themselves, where it fits some strings of the dominating worldview(s) (Drechsler,
2009) And international management consultants often are still strongly in favor of NPM
because, first, their general worldview is in favor of applying private-sector tools in the
public sector and, second, contracting-out management techniques and policy advice brings
to their table. (Martin 2007)
So, though there are a lot of proposed models against NPM, it is clear this time that, they do
not have enough power to bring about a serious breakthrough. And the main principles of
NPM will continue to become even more dominant in the future, making isomorphic and
global trends more evident. Economic neo-liberalism or market focused economy brought
new public management into focus. Global leaders grabbed that NPM, only for facilitating
free movement of market within an effective government management. So, market will
always be there; and it is inevitable that as long as we favor market, surely NPM will prevail.

12. - 11 -
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