A wave of public sector reforms has swept through developed, developing, and transitional countries in the past 30 years, prompting what has been labelled "a new public management revolution". A political premium has been set on such reforms, by leaderships committed to neo-liberal principles. In research, a "contested" literature of governance has emerged, reflecting the debate's ideological nature. Proponents of reform claim successful transfers of state powers; critics point to growing research evidence of flawed application and negative results. Aid agencies are also uneasy on this score. Might the State after all be the fittest agent of worthwhile economic and social change? And should we not therefore be looking for ways to revitalise rather than unravel it?

The "new public management revolution" has sparked unprecedented interest in attempts to reshape and improve governance, defined as an array of ways in which interplay between the State, the market, and society is ordered. In practice, this shift has produced an active agenda to slim down the State, arrest high levels of public expenditure, increase efficiency in the provision of public services and extend the role of the private sector. While this agenda received initial impetus in Britain and America, it has rapidly taken on a global dimension, with the diffusion of new management reforms through multilateral and bilateral aid mechanisms.

A big component of this increasingly global agenda has been a concern among Western nations to promote "good governance", viz democratisation, rule of law, respect for human rights, participation and decentralisation. Political conditions have often been attached to development aid to these ends. "Good governance" and "new managerialism" are often presented as twin outcomes. Greater political accountability should (in this view) automatically bolster more honest and efficient government.

These broad themes of governance were explored in a major international conference held in July 1997 at the University of Manchester under the title Public Sector Management for the Next Century. Some 300 researchers and practitioners met with a view to assessing research findings on the impact of new public management (NPM) reforms. The tone of the debate was set by the new UK Secretary of State for International Development, Clare Short. She noted that the main focus of development policy, the elimination of poverty, could only be achieved "through strong and effective States", adding that "the era of complete enmity to the public sector in general and to State provision in particular is coming to an end."

This focus on the "effective state" is given more precise form in the 1997 World Development Report "The State in a Changing World". This, the third World Bank report in seven years to consider the role of the State, signals an emphatic shift in agency thinking. Earlier enthusiasm for neo-liberal policies and NPM practices is now tempered by explicit rejection of their more radical forms. This (says the WDR of itself) "is not a simple message of dismantling the State. It adds "there is no unique model for change", a fresh recognition that imposing one template of reform on all is unwise and can breed conflict.

The Bank has also come to recognise that restructuring the NPM way "does not lend itself to clear, unambiguous solutions". These themes and others aired in The State in a Changing World constantly recurred in analyses presented to the Manchester conference. Broadly speakers emphasised costs as distinct from benefits of NPM reforms, while endorsing the Bank's call for factoring the State back into development:

• Modern public administration is not just about efficiency. There is constant tension between making government efficient, and keeping it accountable. And there is tension between the idea of people as consumers, positioned between State and marketplace, and that of people as citizens, between State and society. The NPM model bids to integrate these goals, but findings show that this blend has been elusive.
• Explicit in NPM thinking is a cultural and organisational change in social provision, expressed in concepts of individualism. The effect of these ideas is - arguably - to create conditions of social exclusion, so the reforms damage most those most in need of State provision and welfare safety-nets, the poor and vulnerable.
• Local governance, local collaboration and responsiveness offer an alternative resort, because they open the door to local and grassroots accountability. These notions collide with cherished tenets of NPM, which itself is confused and internally flawed.
• Though a generic NPM model can be extracted from the literature, reforms have (in practice) been applied in a selective and piecemeal way, amounting in some cases to little more than rhetoric.
• Advocates of NPM reform tend to assess success or failure in terms of structural and economic change rather than social and political effects (or policy outcomes), which can often be socially and politically damaging. Evaluation of social and political factors essential (or resistant) to structural changes should be a kingpin of future research.

Source(s):
Reorganising the State towards more inclusive governance, Insights #23, September 1997, ID21 Full document.

id21 Research Highlight: 1998-Mar-24

Further Information:
Martin Minogue, Charles Polidano and David Hulme
Institute for Development Policy and Management
University of Manchester
Crawford House
Precinct Centre
Oxford Road
Manchester
M13 9GH
UK

Tel: +44 (0)161 275 2800
Fax: +44 (0)161 273 8829
Contact the contributor: idpm@man.ac.uk

Institute for Development Policy and Management (IDPM), UK

Other related links:
Insights #23: "Ghana: the challenges when a State switches to indirect governance from direct to indirect providers", George Larbi, September 1997, ID21

Insights #23: "Credibility, investment and growth", Taken from World Development Report 1997: The State in a Changing World, Oxford University Press, September 1997, ID21

Insights #23: "New public management and social exclusion: UK lessons", Maureen Mackintosh, September 1997, ID21

Insights #23: "Civil service reform: The true impacts of retrenchment", Willy McCourt, September 1997, ID21

Insights #23: "States as brokers of change: do the new uniforms fit?", Richard Batley, September 1997, ID21

Insights #23: "How women miss out on economic and political reform in Latin America", Georgina Waylen, September 1997, ID21