Fault Lines in the Groundwork: The Shortcomings of New Public Management in Asian Nations


It would be foolhardy to roll a die six times and expect the same outcome. So too it is illogical to assume that a specific theory of government will have the same results in every context in which it is implemented. New Public Management (NPM) is a government theory that attempts to revise the role of the government, taking a ‘results focused’ approach to measure the success of government operations. It attempts to achieve this by cutting government costs through a privatization of government service providers, changing the role of civil servants to that of ‘public managers,’ whose success is at the mercy of the free market. Traditional theories conceptualize the role of civil servants as public administrators, who are responsible for coordinating and providing designated services to their government’s constituents, and who are subservient to a higher bureaucratic authority. NPM reconceptualizes the role of public servants as public managers, empowered with greater autonomy and achieved through widespread decentralization, deregulation, and downsizing. Yet, NPM’s use of the free market to control the provision of government services is a dangerous endeavor, for when a private actor fails to provide such services, there is no other institution for constituents to turn to except for other private actors that have an equal propensity to fail. In Asia, NPM reforms have risen to prevalence based on their success in the Global North. Due to the vastly different environments and contexts of governments across Asia, New Public Management cannot be relied upon to achieve the same results it did in the Global North.

Understanding New Public Management

Traditional views of public administration theorize the government as a provider of civil services, while New Public Management revises the role of the government to be the coordinator of the provision of civil services. Traditional theories of government are largely based on the theories of German political theorist Max Weber, who posited that control is exerted from the top down. Thus, the government, in Weber’s eyes, aims to create a system that enables its constituents to live happy, healthy, productive lives. In this model of governance, the civil servant who is responsible for providing for certain components of the public good is directly subservient to their superior. Weber argues that civil servants must be the opposite of politicians, for while politicians passionately debate how the public good should be provided for, bureaucrats are to execute the orders of their superiors without political conscience. This is not to say that the civil servant is a husk of a human operating robotically; rather, they are meant to apolitically serve the people’s best interests, as laid out by their superiors. The bureaucrats administering civil services must be apolitical because they cannot risk varying their provision of services based on the vacillations of political thought. Instead of being amoral, they are constantly pursuing the moral good of adequately providing for the public. This necessitates providing for the good of all constituents equally, unburdened by partisan bias. While we often hear complaints concerning ‘bureaucrats,’ we cannot fault the civil servants, for they are a necessary part of any polity that provides for a large nation of constituents. While NPM intends to decentralize government in order to increase its effectiveness, decentralization does not necessitate privatization. Thus, the bureaucracy criticized by proponents of New Public Management is a necessary part of any government. Indeed, decentralization can be achieved by creating further reaching levels of public administrators, who are directly a part of the government. As postulated by scholar James P. Pfiffner, “Similarly the exhortations to devolve or decentralize within government does not mean abandoning bureaucracy as a form of organization. It merely means shifting some functions from a large, centralized bureaucracy to smaller or geographically separated bureaucracies.” Pfiffner forwards that, through a multi-level bureaucracy,  the ‘customer focused’ service can be achieved without privatizing the provision of necessary civil services. In opposition to such conjecture, New Public Management turns to the private market to achieve the same decentralization and downsizing.

A Frayed Framework

New Public Management theorists laud NPM as a universal theory, capable of enhancing the outcomes of any government while simultaneously lowering costs. NPM attempts to achieve these ends by privatizing the provision of government services. NPM theorists hypothesize that actors that are contracted to provide such services and fail will be surpassed by actors who are more capable of providing for the public good. In reality, market-lead capitalism as a form of government is anarchy, for each enterprise inherently privileges the good of itself over the good of the public. NPM arises from the junction of desires to curb government growth: a push for privatization, a want for automation, and a desire for a more international approach to governance. In practice, the theory suffers from the ‘cargo cult’ phenomenon, wherein its spread persists despite repeated demonstrations of its failures. The aims of NPM to increase productivity, reactivity, and flexibility by delegating greater discretion to public servants are meritorious. Yet, the methods through which NPM attempts to achieve these goals yield results that differ depending on the context that they are enacted in.  

Allocating public funds to employ private contractors in nations with limited public administration budgets spawns more risks than benefits. While decreased regulation and increased privatization may work well in highly industrialized service economies with a relatively small population, such as New Zealand and Liechtenstein, the failings of NPM become clear in nations where the populace demands more from their government. Traditional administrations’ bureaucrats are held accountable by their superiors, whereas, in NPM, any public manager’s “decisions are acceptable as long as they legally produce the goods or services under contract,” as is further elucidated by Professor Pfiffner. Yet, therein lies the problem, for when such contractors fail to produce goods or services, there is no reliable contingency plan, and no goods are provided to the constituents. A key component of the discussion surrounding NPM is the amount of trust that can safely be placed in the private market to provide for crucial services that support the public good. In traditional administration, the most highly qualified candidates are hired, while in NPM it is left up to the invisible hand of the free market. Instead of measuring performance based on traditional measures, NPM quantifies success by an actor’s ability to achieve a goal at a given cost. This can result in contractors cutting corners and utilizing stop-gap measures to provide the services that they are hired to. It is necessary to analyze case studies to understand if New Public Management is capable of successfully operationalizing the free market to provide for the public good.

Understanding the Implications

In Asia, New Public Management’s reforms were undertaken by modernizing economies in order to cut costs while more effectively responding to citizen demands. Certain Asian nations attempted such revisions of the role of government in order to entice greater Foreign Direct Investment. These governments hoped that “Small government” would encourage foreign interest due to its low levels of regulation and the high potential for private industry growth, but constituents were hurt in the process. In the Research Journal of Business Management, Thai Scholar Kulachet Mongkol utilizes a compelling metaphor to demonstrate the failings of NPM in Asia: Imagine that Asian nations are sitting down to dinner in a restaurant. Singapore and Malaysia are enthusiastic diners, with long experience creating and adapting their public bureaucracies; the Philippines, Thailand, and Indonesia are ‘cautious diners,’ for they have limited experience with privatization but still rely on central control; and Vietnam, Laos, and Cambodia are diners unfamiliar with the menu. This metaphor illustrates the variety of different contexts that NPM is hypothesized to be broadly beneficial in. Clearly, given the vastly different circumstances of different Asian nations, NPM cannot be expected to yield the same results in each context. While NPM is theorized to be universally applicable, its outcomes depend largely on the preexisting government in the state attempting to implement it. Figure 1, below, demonstrates the incongruity of anticipating the same results from NPM in radically disparate environs. The differences outlined between the “Reform leaders” and the “Reform laggards” are clearly abundant, illustrating the absurdity of expecting the reforms of NPM to achieve the same results in both contexts.

Indeed, the strongly centrally and controlled and slowly growing Sri Lanka, and the deeply intertwined public and private sectors of Bangladesh, cannot expect to see the same results from NPM-oriented reforms as Singapore and Malaysia, both of which have successful export-oriented economies that enjoy a high level of growth. The success of NPM heavily relies on a mature private sector. Furthermore, NPM creates new ‘consultocrats,’ as termed by Hood, who leach government money that could be spent on providing services to people. These ‘consultocrats’ are similar to what development scholars term ‘beltway bandits,’ profiting off the industry that has developed from the privatization of government services. In the United Kingdom, the Committee of Public Accounts estimated that close to 18 percent of all government spending on management consultants wasted. NPM can only operate universally when it is utilized by governments with the same goals and objectives, such as EU states, but when it is used by disparate actors, it unsurprisingly yields different results.

The guiding principles of NPM emerged from the highly advanced Organisation for Economic Co-operation and Development member state economies, yet these economies contrast drastically with those discussed in Asia. NPM doesn’t achieve its desired results when states lack the necessary expertise and reliable information systems. In governments with weak internal oversight, NPM can also fall victim to corruption and nepotism due to the awarding of contracts. In Bangladesh, law enforcement officials revealed a ring of unscrupulous public managers who compiled a list of candidates specifically designated for appointments and promotions. Governments that are hoping to grow their private sectors cannot rely on their private sectors to govern, for those are the sectors themselves that are intended to grow. In Sri Lanka, the 13th amendment to the constitution and the Provincial Council Act No. 42 intended to create a government that was more responsive to the needs of its people by establishing independent provincial councils entrusted with broad autonomy and powers. Yet, because these councils lacked significant bureaucratic support, they did not have the political guidance necessary to enact effective, ultimately failing to achieve their objectives. Similarly, without effective enforcement in nations utilizing private contractors, there is no insurance that contracts will be satisfactorily fulfilled. In nations where citizens anticipate the failure of public services, the ‘invisible hand’ of the free market will fail to regulate failing private actors, for citizens will not complain about contractors failing to meet their needs. Thus, New Public Management cannot be relied upon to deliver the results it was lauded for in OECD economies when utilized in Asian economies.

Conclusion

New Public Management is not malignant in its conception but can be counterproductive when implemented in the improper context. To be successful, NPM must be used in small nations where the private sector is already highly developed. When nations that do not have the capacity to ensure that the contracts they allot will be satisfactorily fulfilled, NPM will inhibit the provision of government services. The role of government is to provide for the good of the people, and that role must stand the test of revisionist ideologies such as New Public Management that attempt to shift that responsibility to private actors.

 


Andrew Fallone

About Andrew Fallone

Andrew is the Marketing Director for the World Mind, as well as a contributing editor, and a staff writer for the Asia column. Originally from Milwaukee, Wisconsin, he is in D.C. pursuing degrees in International Relations and German. He is currently interning with the Embassy of the Principality of Liechtenstein.