Muhammad shehroze akbar
BS-IAS-148-S-F18
Ms. Aisha Rizwan
New Public Management (NPM)
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. Some NPM reforms used private sector companies to deliver what were
formerly public services. As with the private sector, which focuses on "customer services", 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 favor 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 USA. NPM
advocates focus on using approaches from the private sector – the corporate or business world
which can be successfully applied in the public sector and in a public administration context.
NPM approaches have been used to reform the public sector, its policies and its programs. NPM
advocates claim that it is a more efficient and effective means of attaining the same outcome.
In NPM, citizens are viewed as "customers" and public servants are viewed as public managers.
NPM tries to realign the relationship between public service managers and their political
superiors by making a parallel relationship between the two. Under NPM, public managers have
incentive-based motivation such as pay-for-performance, and clear performance targets are often
set, which are assessed by using performance evaluation. As well, managers in an NPM
paradigm may have greater discretion and freedom as to how they go about achieving the goals
set for them. This NPM approach is contrasted with the traditional public administration model,
in which institutional decision-making, policy-making and public service delivery is guided by
regulations, legislation and administration procedure. NPM reforms use approaches such as
disaggregation, customer satisfaction initiatives, customer service efforts, applying
an entrepreneurial spirit to public service, and introducing innovations. The NPM system allows
"the expert manager to have a greater discretion". "Public Managers under the New Public
Management reforms can provide a range of choices from which customers can choose,
including the right to opt out of the service delivery system completely".
New Public Management draws practices from the private sector and uses them in the public
sector of management. NPM reforms use market forces to hold the public sector accountable and
the satisfaction of preferences as the measures of accountability. In order for this system to
proceed, certain conditions, such as the existence of competition, must exist and information
about choices must be available. Reforms that promise to reinvent government by way of
focusing on results and customer satisfaction as opposed to administrative and political processes
fail to account for legislative self-interest. Institutions other than federal government, the changes
being trumpeted as reinvention would not even be announced, except perhaps on hallway
bulletin boards.
Criticisms:
There are blurred lines between policymaking and providing services in the New Public
Management system. Questions have been raised about the potential politicization of the public
service, when executives are hired on contract under pay-for-performance systems. The ability
for citizens to effectively choose the appropriate government services they need has also been
challenged. "The notion of choice is essential to the economic concept of a customer. Generally,
in government there are few if any choices." There are concerns that public managers move
away from trying to meet citizen's needs and limitations on accountability to the public. NPM
brings to question integrity and compliance when dealing with incentives for public managers -
the interests of customers and owners do not always align. Questions such as managers being
more or less faithful arise. The public interest is at risk and could undermine the trust in
government. "Government must be accountable to the larger public interest, not only to
individual immediate customers or consumers of government services."
NPM model in Pakistan
● From PA to NPM:
It is always an uphill task to put the economy on the right path. Here in Pakistan
the minister of finance is the competent authority to run the economic affairs of the country. In
the last tenure of Pakistan People’s Party (PPP), four finance ministers were changed in just five
years but the party could not bring the country out from the eternal financial quagmire and the
party witnessed a shameful defeat in the general elections ultimately. The ruling government of
Pakistan Muslim League Nawaz (PML-N) had decided to hand over the finance ministry to its
close confidant Ishaq Dar after coming into power. Ishaq Dar took several steps to keep the
economy intact but he could not bring significant improvements. The finance minister had once
managed to bring back the dollar under one hundred rupees but the arrangement was temporary
as the dollar has gone to its previous position. The incumbent government made several promises
before coming into power regarding drastic reforms in the field of energy, economy and
investment to make the country an Asian Tiger. Nothing notable could be achieved so far in
these areas as the economy is still in a fragile condition. Then the government took the reins of
the country, it announced to pursue the policy of privatisation rigorously to convert the public
sector enterprises into profitable organisations. The International Monetary Fund (IMF) released
a trench of $502 million for Pakistan last year with some conditions that Pakistan would work on
four key sectors; energy, privatisation, taxation and investment to bring the economy on the right
track. Pakistan accepted these conditions and assured that significant progress would be made in
all before the end of 2015. The privatisation of Pakistan International Airline (PIA) seems to be
in the doldrums because the trade union of PIA is in agitation mode after the killing of three of
its workers.
A wave of protests spread all over the country after the news of killing came and the workers
vowed to oppose privatisation tooth and nail. The prime minister said that the protesters might
land in jail if they continued their protest because privatisation is the only solution left to save
the national flag carrier as Rs100 million per day is given from the national exchequer to run the
daily affairs of the airline. Opposition parties have also decided to give a protest call to oppose
the process of privatisation as they say it is against the national interest of the country. Ironically,
the ruling party opposed the move of privatisation when it was sitting on the opposition benches
and the PPP had a plan to go ahead with the process. Now, the leader of opposition Syed
Khurshid Shah is often seen opposing the process ardently. Politics is being played over the issue
and nothing concrete comes from the ruling and opposition parties to convert public sector
enterprises into profitable companies.
The religious cum political party Jamaat-e-Islami (JI) is opposing the privatisation fervently and
its Amir Siraj-ul-Haq has led the funerals in absentia of those PIA workers who were killed
during the protest in Karachi. The provincial Amir of JI from Punjab Mian Maqsood Ahmad
told DNA that the government is working on privatisation just because of pressure from the IMF.
“It happens all because of poor management by the previous governments. The PPP made
numerous political appointments in PIA during its tenure and ruined the institution”, he
lamented.
He said we are not against the process of making PIA a profitable airline but the government
must craft a policy to safeguard the future of its thousands of employees as well. According to
him, inefficient and employees with fake degrees are also working in the PIA and government
must take action against them but not at the cost of efficient workers. Khurshid Ahmed, a veteran
trade union leader and the general secretary of All Pakistan Workers Confederation,
told DNA that public sector enterprises (PSEs) are for the usage of the general public and the
government cannot privatise them without taking the public into confidence.
“Our rulers try to imitate China in every project; be it Metro Bus service or Orange Line Train
but forget that it China provides the cheapest electricity to over a billion people. They must
imitate China in giving such services also”, said by Ahmed, who is also a former member of the
governing body of International Labour Organisation (ILO) Geneva. He added that privatisation
is not the solution to make the PSEs profitable and the government must hire efficient managers
as efficiency can change the fate of PSEs in the shortest span of time.
There used to be a time when the state ran the affairs of PSEs but several changes have been
made in the structures of these PSEs as the representation from private sector is seen as an
essential part in such organisations. The subject of Public Administration has been replaced by
New Public Management (NPM) in the modern economics which advocates more representation
from the private sector in PSEs to make them more efficient and profitable. All these practices
have been made all over the world by keeping in view the interests of employees and the same
must be done in dealing with PIA and other PSEs of the country.