New Public Management (NPM) is defined as a new approach to running of government, public institutions and agencies at both national and sub-national level. The term was first used by academics in Australia and United Kingdom to describe approaches which developed during 1980s as part of an effort to make public service more businesslike and to improve its efficiency by using private sector management models.
As with the private sector which focused on customer service, New Public Management (NPM) also focused on citizens who were the recipients of various services from the state. Tambulasi and Codesria. (2010) argues that new public management aimed at revolutionizing the public sector through introducing competition, enabling the state to earn rather than spend and above all forming a market oriented government. Public organizations providing value for money is at the center of the debate in many countries some of which are covered in this paper.
The proponents of NPM conducted experiments using decentralized units through giving local agencies more freedom to decide how they delivered their programs. Some governments tried to use quasi-market structures to allow public sector to compete with the private sectors especially in the United Kingdom healthcare sector.
Key themes in New Public Management were: financial controls, value for money, increasing efficiency, identifying and setting targets and continuous monitoring of performance. Performance was assessed with audits, benchmarks and performance evaluations.
New Public Management has been used in many countries around the world such as the United Kingdom, Australia and the United States of America. NPM advocate insist on using approaches from the private sector and the business world which can be applied in public administration management. In NPM, citizens are viewed as customers while public servants are viewed as public managers. In addition to that, public managers have incentive-based motivation such as pay for performance and clear performance targets. New Public Management (NPM) use approaches such as disaggregation, customer satisfaction initiatives, customer service efforts and applying entrepreneurial spirit into the public service.
Effects of NPM on African Countries
According to a research by Polidano (1999), developing countries have been experimenting with some aspects of the New Public Management (NPM) tools and techniques for years now. That notwithstanding, critics have always argued that NPM is not appropriate for developing countries based on challenges such as low administrative capacity and rampant corruption.
In this paper we will conduct an analysis on the outcomes of experiments on NPM by African countries. We shall have a focus on both success stories and failures. Uganda is a star in terms of success stories based on the country’s results oriented management initiative as reported in a research by Langseth (1995).
Downsizing or retrenchment (as it is commonly referred in Africa) as well as privatization are the two most commonly practiced tools of New Public Management which were quickly adopted by a number of countries across the African continent. Early 1990s, Uganda excelled among this lot. Research reports have indicated that Uganda’s civil service was reduced by half (in terms of numbers) thanks to downsizing. A part from retrenchment, African countries employ the action of cleaning their payroll by getting rid of ghost workers which is less painful but with great positive impact on the final results.
According to a research by Tambulasi and Codesria (2010), Africa has countries with the largest number of reforms. The researchers argue that many of these African states adopted new reforms not because they like the reforms but because they are forced to do so by the donors. Malawi is a good example in this case according to the researchers. They further add that the problem is the reforms are poorly implemented hence leading to their failure.
Africa is home to many countries which can be considered to be over-reformed. For instance, the reforms initiated by both the International Monetary Fund (IMF) and the World Bank Group in the 1980s were twice as many as the rest of the developing world. Other analysts have observed that these reforms were largely dominated by the donors. Many governments in Africa started replacing their state-driven and bureaucratic policies with the new public management (NPM) model.
The second agenda under New Public Management which is widely practiced in Africa is corporatization. This involves converting civil service departments into independent agencies or enterprises. Globally, New Zealand and United Kingdom led the rest of the word in this area. According to research papers by Dodoo (1997), Brown (1999) and Common (1999) Africa was not left behind considering that countries such as Tanzania, South Africa and Ghana lead in establishing independent corporate agencies. For instance, in 1996 Tanzania created 12 agencies and 60 others were on the waiting list as at the time when the research papers were published.
Further on corporatization, Moene and Chand (1999), found out that Rwanda, Kenya, Ghana, Uganda, Tanzania and Malawi made efforts to merge income tax and customs departments hence creating national revenue authorities. Through this New Public Management approach, the agencies created in various African countries hired competent staff and are now self-sustaining in financial terms. For instance, according to Chand and Moene (1999), Ghana’s National Revenue Service increased revenue collection up from 4.5% to 17% of Gross Domestic Product (GDP) between the year 1983 and 1994. In another case, Uganda Revenue Authority (URA) increased its tax collection by 17% every year for the years running from 1991 to 1995 according to a research paper by Livingstone and Charlton (1998).
African countries such as Ghana, Uganda, Zambia, Zimbabwe, Malawi, Kenya and South Africa are in the process of corporatizing their health sectors as reported in research papers by Chimphamba (1999), Larbi (1998), Russell et al. (1999) and Mills (1997). The researchers have indicated that the countries named herein have converted their hospitals into independent bodies run by board of directors. However, researchers and analysts of the NPM have pointed out that healthcare systems in Africa may not yield much considering that the sector is largely underfunded and hence becomes an obstacle to the possibilities of transformation expected through organizational change. This means that budgetary allocations rather than management reforms still remain important in achieving quality service delivery. When public budgets increase progressively, it is a sign of commitment by the state which is the duty bearer.
The New Public Management agenda has contributed towards fighting corruption in Africa. For instance, establishment of National Revenue Service in Ghana was a tool used to weed out corrupt officials at the customs and internal revenue departments. After weeding out those suspected to be corrupt, the salaries of the remaining staff members was increased in order to dissuade them from being tempted to take bribes. In addition to salary hikes, the corporatization also brought on board new strategies such as putting in place public complaints mechanism. In Tanzania extra measures were taken, for instance those state officers who were living beyond their means were not recruited to be part of the new national revenue authority.
However, researchers and analysts have discovered that New Public Management is partially responsible for some of the ethical misconduct witnessed around the world. Greenaway (1995 and Doig (1997) have pointed out that the architects of NPM agenda did not establish the agenda to fight corruption.
According to Nunberg (1995), many African countries have not embraced performance pay schemes instead promotions are based on examinations or seniority. Cases of abuse of the delegation of staff appraisal is a genuine fear in many African countries such as cases reported in Zimbabwe where ethnicity and regional cliques emerged and this was used for self-preservation of senior servants in public service as reported by Makumbe (1997).
Uganda which has emerged as a public management reforms champion has embraced results oriented management style stretching way back to 1990s.
Decentralization is a major component of New Public Management (NPM) which was embraced by African countries in 1980s. The adoption of many administrative reforms has largely failed in many countries. Researchers have pointed to Ghana’s corporatization as a good example of failed strategy in this case.
In Ghana, the Ministry had the mandate of collecting revenue but lost this after the setup of the revenue authority in 1984. However, the Ministry did not stop interfering with the management and running of the independent revenue authority. For instance, the killed the new agency by stopping the staff bonus scheme.
Olowu (1990) observed that decentralization has largely failed in many African states or alternatively it has led to unintended results.
Public Private Partnerships (PPPs)
The Public Private Partnerships is another form of New Public Management that has been adopted in many countries across Africa. The major objective of the PPPs was to improve service delivery, increase efficiency as well as effectiveness.
It is also clear that competition is at the center of the New Public Management rhetoric. There are numerous tools which are being used by the states in Africa to achieve a higher level of competition. This includes: market testing, privatization and commercialization. In fact, Public Private Partnerships (PPPs) have been praised by many analysts and observers to be an “innovative policy tool” and a remedy for lack of dynamism in the ordinary public service delivery.
A lot of literature on Public Private Partnerships (PPPs) has been reported to have a lot of great promises for efficiency. However, the reality on the ground is different. The implementation of PPPs in African countries has largely failed to attain the goals of various projects. For the PPPs to operate efficiently and effectively, there is need for a conducive environment. Most African countries do not have the required environment.
A number of factors required to make PPPs a success include: effective procurement, economic viability of projects selected, presence of financial markets, presence of strong private corporations or consortiums, government guarantee and reliable contractual environment among others.
Public Private Partnerships (PPPs) have weaknesses in themselves. For instance, experience has shown that PPPs are very risky and the fact that they transfer risks to the private sector but they also transfer some risk to the state, public and the workforce. Conflict of interest are quite common under PPPs. Finally, if care is not taken, PPPs can open opportunities for the private and public actors to engage in corruption.
Incentivisation and performance contracting
In this term paper, we have explored various attempts for African countries to implement various aspects of New Public Management (NPM) with some level of success for instance for the case of revenue authorities and total failure for the case of performance contracting and the Public Private Partnerships (PPPs).
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