During the last twenty years, various public administrations of countries in Europe, North America, Latin America and the Caribbean, were characterised by a practical reform movement defined by Hood (1991) as the New Public Management (NPM). This is documented by other scholars such as Gernod Gruening (1998), and Paul Sutton (2003). Throughout the literature, it is evident that the process of reform have been subject to different terminologies: Managerialism – Pollitt (1990); Market Based Administration – Lan and Rosenbloom (1992); Entrepreneurial Government – Osborne and Gaebler (1992).
NPM has its origins in public choice theory and the so-called ‚“managerialism’’. A simple conceptualization is that the New Public Management is a philosophy used by governments since the 1980’s to modernise the public sector. A more detailed construct is offered by Michael Barzelay (2001) who indicated that New Public Management is a field of discussion largely about policy interventions within executive government. The characteristic instruments of such policy interventions are institutional rules and organizational routines affecting expenditure planning and financial management, civil service and labour relations, procurement, organization and methods, and audit and evaluation.
The New Public Management emerged in the 1980`s and 1990’s as a response to the creeping inefficiencies of traditional bureaucratic systems. The traditional philosophy of public administration as articulated by Max Weber – that bureaucracy made administration more efficient and rational - was subject to strong criticism. Bureaucratic dominance was being viewed not as a solution to the problems of public administration, but the very source of these problems (Teehankee 2003).
Thompson (2003) argues that bureaucratic arrangements once, successfully provided security, jobs, and economic stability, ensured fairness and equity, and delivered the one-size-fits-all services needed during the era that lasted from the turn of the past century to the mid-1960s. In the meantime, however, the organizational arrangements invented at the dawn of the industrial era have become increasingly anachronistic. The fact that improvements in educational levels and advances in automation including capital intensive industries have reduced the relative efficacy of bureaucratic personnel systems (control by rules and standard operating procedures, task specialization, and sequential processing) necessitated the need for a more suitable management system. Subsequently bureaucratic systems in many industries became replaced by modern, people based human resources management (HRM) practices.
Apart from industrial transformation, Thompson also draws attention to the fact that we now live in an economy in which workers demand autonomy and citizens\customers demand superior service and more choice. Old-fashioned business bureaucracies cannot meet these demands; neither can old-fashioned government bureaucracies. He sees the New Public Management as being instrumental in correcting various bureaucratic deficiencies as it calls for the adoption of the organizational designs and practices that are transforming business: decentralized, flatter, perhaps smaller, organizations, structured around sets of generic value-creating processes and specific competencies, high-performance HRM practices, modern information technology, balanced responsibility budgeting and control systems, and loose alliances of networks (L. R. Jones & Thompson, 1999). Osborne and Gaebler (1992) shared paralleled views to Thompson and referred to the process as an attempt to re-engineer the state.
Generally there became a growing consciousness among public servants, politicians, activists and academics around the world...