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Changing Approaches to Public Sector Management

Author: R Batley and G Larbi
Date: 2004
Size: 22 pages

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Summary

What is the theory behind the new trends in public service reforms? What are the pragmatic rationales for change? This study by the International Development Department at the University of Birmingham reviews both the theory and practice of public service reform, including neo-classical and new institutional economic theories. It describes the more pragmatic rationales for change in the management of public services and provides an overview of the new approaches to public sector management.

The crisis in the welfare and developmental states during the 1970s and 1980s called into question the post-war consensus on the active role of the state in the economy and led to the ascendancy of neo-liberal economic policies from the 1980s onwards. It was not just the welfare state that was called into question, but also the traditional Weberian model of bureaucracy which came under attack as being slow, inefficient, ineffective and unresponsive to service users. The weaknesses of state bureaucracy led to the search for alternative ways of organising and managing public services and redefining the role of the state to give more prominence to markets and competition. In some developed countries, the shift was in response to a combination of indigenous pressures and demands which generated support for anti-statist approaches. In the case of developing countries, reforms were typically not home-grown and had little local support.

The intellectual arguments for new approaches to public management are rooted in neo-classical as well as new institutional theories, in particular public choice and principal-agent theories. New public management represents a menu of reforms:

• These centre around restructuring to allow for increased managerial autonomy and the introduction of market-type mechanisms within the public sector, and for contracting out to the private sector.
• Whilst new public management may be seen as complementary to traditional public administration, it certainly does not replace it.
• The application of new approaches to public management is not limited to their heartland of developed OECD countries.
• Many developing countries are applying market reforms to their public services in order to improve management in government and the delivery of public services.

However, claims of convergence or of the universality of new public management reforms are unjustified.

• In no country has hierarchical bureaucracy been substantially replaced and in developing countries there is much to do to build the capacity of traditional bureaucracy to meet the preconditions for the implementation of the new management reforms.
• Even within OECD countries, comparative studies show that there are variations in the adoption and application of new public management.
• The extent to which countries adopt management reforms in government may relate to each country's administrative culture and the resistance to change of its established order. Thus the context is important.
• There are mixed experiences in applying reforms. Whilst best practice in the adoption of new apporaches to management can generate improvements in service delivery, more typical is that there are constraints and capacity limitations in applying these practices to the public sector, particularly in developing countries.

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Source: Batley, R. and Larbi, G., 2004, ‘Changing Approaches to Public Sector Management’, in The Changing Role of Government: The Reform of Public Services in Developing Countries, Palgrave, Macmillan
Author: Richard Batley , r.a.batley@bham.ac.uk ; George Larbi , G.A.Larbi@bham.ac.uk
International Development Department (IDD), University of Birmingham, http://www.idd.bham.ac.uk