1.2 A new paradigmOstromThere are two opposing form of organization –bureaucracy and markets. The key difference between the two form of organization is that between choice and compulsion ;allowing the market to find an agreed result or having it imposed by a bureaucratic hierarchy.The public management paradigm has the very different underlying theoretical bases of economics and private management. As an OECD paper argues, ‗this new management paradigm emphasises results in terms of ―value for money‖, to be achieved through management by objectives, the use of markets and market-type mechanisms, competition and choice , and devolution to staff through a better matching of authority, responsibility and accountability‘(1998).1.3 The emergence of a new approachreformThe new approach:Emphasize resultsFocus on clients, outputs and outcomesManagement by objectives and performance measurementThe use of markets and market-type mechanisms in place of centralized command-and-control-style regulationCompetition and choiceDevolution with a better matching of authority, responsibility and accountabilitySome views.Rhodes saw managerialism in Britain as a ‗determined effort to implement the ―3Es‖ of economy, efficiency and effectiveness at all levels of Br itish government‘(1991).Horton would argue ‗during the 1980s and 1990s the civil service moved form an administered to a managed bureaucracy and from a system of public administration to one of new public management (NPM)‗ (1999).The Gore Report which was clearly influenced by Osborne and Gaebler set out to change the culture of American federal government through four key principles: (i) cutting red tape ‗shifting from systems in which people are accountable for following rules to systems in which they are accountable for achieving results‘; (ii) putting customers first; (iii) empowering employees to get results; (iv) cutting back to basics and ‗producing better government for less (1993).1.4 Public administration andpublic managementAdministration essentially involves following instructions and service;Management involves: first, the achievement of results, and secondly, personal responsibility by the manager for results being achieved.Management does include administration.Public administration andpublic managementPublic administrationBeside being an activity and a profession, it referred to the study of the public sector.Public administration is the use of managerial, political, and legal theories and processes to fulfil legislative, executive and judicial governmental mandates for the provision of regulatory and service functions for the society as a whole or for some segments of it.Public managementPublic management as a branch of the larger field of public administration or public affairs. Overviews the art and science of applied methodologies for public administrative program design and organisational restructuring, policy and management planning, resource allocations through budgeting systems, financial management, human resources management, and programme evaluation and audit.They was regarded as competing paradigms.1.5 Imperatives of changeThe changes in the public sector have occurred as a response to several interrelated imperatives:(1) The attack on the public sector;(2) Changes in economic theory;(3) The impact of change in the private sector ,particularly globalization as an economic force;(4)Changes in technology.(1)The attack on the public sector(i) The scale of the public sector was simply too large: consuming too many scarce resources. (ii) There were governmental responses to argument about the scope of government.(iii) There was a sustained attack on the methods of government, with bureaucracy in particular becoming highly unpopular.(2)Economic theory(i) Public choice theory.Public choice is a sub-branch of economic thought concerned with the application of microeconomics to political and areas (Mueller,1989). Public choice theorists generally conclude that the ‗best‘ outcome will involve a maximum role for market forces and a minimal role for government. Even if this view is often ideological, and not an axiom of the theory itself, they argue there is a substantial body of evidence that private markets are better than government or political markets. If the role of government in supplying goods and services could be reduced, the economy as a whole would benefit. Markets are also argued to have better mechanisms for accountability as opposed to a bureaucracy accountable to no one.(ii) Principal/agent theory.The economic theory of principal and agent has also been applied to the public sector, especially concerning its accountability. The theory was developed for the private sector to explain the divergence often found between the goals of managers (agents) in private firms and shareholders (principals).(iii) Transaction cost theory.As set out by Williamson (1986), this challenges the notion that transaction are without cost and specifies the circumstances where a firm many prefer market-testing or contracting to in-house provision. The same applies to the public sector; there are some transactions which would be less costly if contracted out to reduce administrative cost and provide some competition.(3)Private sector changeA further imperative for public sector change has been the rapid change in the private sector and the realization that the management and efficiency of the public sector affects the private economy and national competitiveness. A concern with national competitiveness leads fairly naturally to a need for reform of the public sector.(4)Technological changeTechnological change affects management, including the management of government. This should be regarded as one of the main driving forces both towards new forms of public management and away from traditional bureaucracy.Chapter 2.The Traditional Model of Public Administration2.1 Early administrationAdministrative systems existed in ancient Egypt to administer irrigation from the annual flood of Nile and to build the pyramids.China in the Han dynasty adopted the Confucian precept that government should be handled by men chosen, not by birth, but by virtue and ability.In Europe the various Empires controlled form the centre by rules and procedures. Characteristic :(1) ‗personal‘, based on loyalty to a particular individual such as a king or a minister.(2) ‗impersonal‘ ,based on legality and loyalty to the organization and the state.2.2 The reforms of the nineteenth century(1) ‗The Northcote -Trevelyan Report ‘, 1854.Appointment by merit through examinations, and non-partisan, neutral administration.It signals the start of merit- based appointments to the public service and the gradual decline of patronage.2.3 Weber‘s theory of bureaucracyWeber argued there were three types of authority:The charismatic – the appeal of an extraordinary leaderThe traditional - such as the authority of a tribal chief;Rational/legal authority.(1)Six principles for modern systems of bureaucracy set out by Weber.(i) Authority derives from the law , and from rules made according to law.(ii) The hierarchy.(iii) The organization is something with an existence separate from the private lives of its employees; it is impersonal.(iv) Administration is a specialist occupation .(v) Working for the bureaucracy was a fulltime occupation .(vi) Office management was an activity that could be learned as it followed general rules.(2)The position of the officialThe official is to be part of an elite with status higher than that of ordinary citizens.Web er‘s theory required recruitment by merit, not by election or by patronage, into a position normally held for life in exchange for impartial service. Part of the lifetime and full-time career of the public servant is the principle of fixed salary and the prospect of advancement through the hierarchical structure.The two principles – the model of bureaucracy and position of the official - had specific purposes.A formal, impersonal system offers ‗ the optimum possibility for carrying through the principle o f specialising functions according to purely objective considerations‘.The hierarchy of authority and the system of rules make for certainty in decision; and the impersonality of the system implies that the same decision can be repeated in the same circumstances; decisions are not made arbitrarily.2.4 Wilson and political controlWilson believed that the evils of the spoils system resulted from the linking of administrative question with political ones.The politics/ administration dichotomy.The worlds of the politician and the public official were to be separate.Political officesMake the rule.Be filled competitively in the political arena.Be selected on the basis of their political competence.Be judged by the electorate or their political peers.Be of limited tenure and subject to frequent elections.Bureaucratic officesDo their bidding.Be filled competitively in the bureaucratic arena.Be selected on the basis of their bureaucratic competence.Be judged by their political overseers or their bureaucratic peers.Be of unlimited tenure, subject to good behaviour.2.5 Taylor and managementScientific management-Frederick Taylor(i) Time-and-motion studies to decide a standard for working;(ii) A wage-incentive system that was a modification of the piecework method already in existence;(iii) Changing the functional organization.(2) Human relationThe theory‘s founder was Elton Mayo.(i) The social context of the work group was the most important factor in management.(ii) Conflict was pathological and to be avoided, and there was no necessary antagonism between management and workers.(iii) Productivity increased most by taking an interest in the workers.(3) A continuing debateSome people regard the theories of Taylor and Mayo as mutually exclusive-at one time theory is pre-eminent while at other times the other is-but this would be misleading.The same pointThey both did not favour unions orindustrial democracy.The goal of both-increased productivity-was the same.Both continue to influence managementin the public sector.(4)The Golden Age of public administrationThe Golden Age of public administration was from around 1920 to the early 1970s.One variation was the ‗POSDCORB‘ set of functions set out by Gulick and Urwick (1937).POSDCORBPlanning: goal setting techniques/methods applied by executives as a means of preparing future courses of organizational action;Organizing: arranging the organizational structure and processes in an appropriate manner essential to achieving these ends;Staffing: recruiting and hiring personal to carry out the essential agency work;Directing: supervising the actual processes of doing the assignments;Coordinating: integrating the various detailed elements of the work within the organization; Reporting: tracking and communicating the progress of the work within the organization; Budgeting: fiscal and financial activities necessary to economically support the completion of these programmes, services, or activities.2.6 Problems with the traditional modelThe problem of political controlThe problem of one best wayThe problem of bureaucracyThe public choice critique(1) The problem of political controlA strict separation between politicians and administrators, between policy and administration ,was never realistic in its original home.Peters(1989)Administration and policy, instead of being discrete phenomena, are actually interrelated. In both an objective and subjective manner, the nature of the administrative system can influence the policy outputs of the political system. Administration does make policy, although these policies are not always written and promulgated in the same manner as the rules made by legislatures and executives. Moreover, the operational rules developed by administrators can be more telling for the actual outcomes for individuals than are the formally promulgated rules.(2) The problem of one best wayTedious , trivial, copious, inflexible.Gulick‘s POSDCORBTaylor‘s scientificManagement(3) The problem of bureaucracyThe problems with the theory of bureaucracy.The problematic relationship between bureaucracy and democracy;Formal bureaucracy could not longer be considered as a particularly efficient form of organization.The problematic relationship between bureaucracy and democracyWith its formal rationality, secrecy, rigidity and hierarchy, it seems inevitable that there would be some conflict between bureaucracy and democracy.It did not make sense for a democracy to have a distinct elite acting secretively.There was and is some conflict between bureaucracy and democracy.Formal bureaucracy could not longer be considered as a particularly efficient form of organization There were always some extreme interpretations of Weberian principles, particularly in the personnel system, which was made more rigid, more formal and less elitist than Weber imagined, and this tended to reduce its efficiency.New theories of organizational behaviour argue that formal bureaucratic models are no longer particularly efficient or effective in any sense, when compared to more flexible forms of management .(4)The public choice critiqueThe confrontation of bureaucracy theory andpublic choice theory.The bureaucracyThe theory of publicChoice.Two main claims:Government bureaucracy greatly restricted the freedom of the individual and its power needed to be reduces in the name of ‗choice.Market economists argued that the traditional bureaucracy model did not provide an equivalent structure of incentives and rewards to those of the market. It was less efficient than market processes.Chapter 3. Public Management3.1 IntroductionThe 1980s and 1990s saw the emergence of a new managerial approach in the public sector, in response to what many regarded as the inadequacies of the traditional model of administration.Public management(1) It paid more attention to the achievement of results and the personal responsibility of managers.(2) There is an expressed intention to move away from classic bureaucracy .(3) Organizational and personal objectives are to be set clearly.(4) Senior staff are more likely to be politically committed to the government of the day.(5) Government functions are more likely to face market tests; in separating the purchaser of government services from the provider.(6) There is also a trend towards reducing government functions.3.2 The meaning of managementAdministration means following instructions .Management means the achievement of results and taking personal responsibility for doing so. 3.3 Functions of general management‗Functions of general management ‘—Allison(1982)STRA TEGY(1) Establishing objectives and priorities for the organization.(2) Devising operational plans to achieve these objectives.MANAGING INTERNAL COMPONENTS(3) Organizing and staffing.(4) Directing personnel and the personnel management system.(5) Controlling performance.MANAGING EXTERNAL CONSTITUENCIES(6) Dealing with ‗external units‘ of the organization.(7) Dealing with independent organization.(8) Dealing with the press and public.(1)Public management is management of the external environment of the organization;Public administration is within the context of the organization.(2) Traditional public administration tended to consider short-term goals within the organization. Public management aim at the longer term and at the relationship between the organization and the external environment.(3) Traditional public administration‘s some functions was not carried out to its fulles t.(4) Under the traditional model, the concepts of public service anonymity and neutrality. New public management focus on external environment, and public service anonymity has declined.3.4 The beginnings of management approachBetween 1950s to 1980s, one starting point is the 1968 Fulton Report in the United Kingdom. This report noted concerns with the management capability of the public service.Four aspects made up the total management task of the Civil Service:(1) Formulation of policy under political direction.(2) Creating the ‗machinery‘ for implementation of policy(3) Operation of the administrative machine.(4) Accountability to Parliament and the Public.3.5 The public management reformsInstead of there being reforms to the public sector, new public management represents a transformation of the public sector and its relationship with government and society.3.6 The managerial programmeThere are various ideas of what is involved in the public management of reforms.(1)Most countries are fol lowing ‗two broad avenues‘ to improve production and delivery of publicly provided goods and services(OECD,1991).① Raise the production performance of public organization.②Make greater use of the private sector.(2) ‗New public management‘ is comprised of seven main points:① Hands-on professional management in the public sector.② Explicit standards and measures of performance .③ Greater emphasis on output controls.④ A shift to disaggregation of units in the public sector.⑤ A shift to greater competition in the public sector.⑥ A stress on private sector styles of management practice.⑦ A stress on greater discipline and parsimony in resource use.--Hood 1991.(3)Holmes and Shand ,1995‗Good managerial approach‘:① A more strategic or results-oriented approach to decision-making.②The replacement of highly centralized hierarchical hierarchical organizational structures with decentralized management environment.③Flexibility to explore alternatives to direct public provision which might provide more cost-effective policy outcomes.④ Focusing attention on the matching of authority and responsibility.⑤ The creation of competitive environments within and between public sector organizations.⑥ The strengthening of strategic capacities at the centre to ‗steer‘ government.⑦ Greater accountability and transparency through requirement.⑧ Service-wide budgeting and management systems to support and encourage these changes.(4) Pollitt argued there were a number of general elements of the new model accepted by most commentators(2001).① A shift in the focus of management systems and management systems and management effort from inputs and processes to outputs and outcomes.② A shift towards more measurement.③ A performance for more specialized, ‗lean‘, ‗flat‘ and autonomous organization forms.④ A widespread substitution of contract or contract-like relationships for hierarchical relationships.⑤ A much wider than hitherto use of market or market-like mechanisms for the delivery of public services.⑥ A broad ening and blurring of the ‗frontier‘ between the public and private sectors.⑦ A shift in value priorities away from universalism, equity, security and resilience and towards efficiency and individualism.The main points involved in the public management reforms including those emerging from the various formulations.A strategic approach. Government have aimed to develop better methods for long-term planning and strategic management.Management not administration. Public management now requires professional management where administration did not.A focus on results. The organization must focus on outcomes or outputs, instead of inputs.Managerial reforms have stressed performance by individuals and by agencies.Improved financial management. The most important change in this area has been performance and programme budgeting systems to replace the older line-item budget and accounting systems. Flexibility in staffing. There has been a consistent trend away from position classification towards flexibility in arrangements for filing senior positions.Flexibility in organization. One aspect of organizational flexibility is disaggregation, which means splitting large departments into different parts by setting up agencies to deliver services for a small policy department.A shift to greater competition. Competition for provision through contracting, is seen as reducing costs compared to bureaucratic provision.The new contractualism. Under what has been called ‗contractualism‘ , any conceivable government service can be provided by contract.A stress on private sector styles of management practice. This includes staffing changes designed to better fit staff for their positions, to appraise their performance and to reward them accordingly with merit pay.Relationships with politicians. In the traditional, model the relationship with the political leadership was narrow and technical, of master and servant, of those giving the orders and those carrying them out. Under the public management model the relationship between politician and manager is more fluid and is closer than before.Relationships with the public. There is recognition of the need for direct accountability between managers and the public, as the result of demands for a ‗client focus‘ and for greater responsiveness to outside groups and individuals.Separation of purchaser and provider. Even if government is involved in an activity it does not need to be the final provider.Re-examining what government does. One important part of the public management reform process has been to examine and reexamine government programmes to ascertain if they are meeting their goals. (Six tests, public interest test, role of government test, federalism test, partnership test, efficiency test, affordability test.)Traditional public administration was based on two theories, the theory of bureaucracy and the theory of separation between politicians and administrators. There are also two main theoretical bases to new public management. These are economics and private management.There are two key assumptions in economics.First, there is the assumption of individual rationality, that individuals can be assumed to prefer more of something rather than less.Secondly, the individual rationality assumption allows the elaboration of models that can extend to high levels of abstraction. The second theoretical basis for public management can be found in private management. There are several managerial changes with antecedents in the private sector.3.8 Criticisms of managerialism(1) The economic basis of managerialismThere are two main criticisms of the economic basis of managerialism.① Economics is a flawed social science and its application to government is similarly flawed.②Economics has some validity as the basis for the economic system and private sector, its application to government is ill-conceived.(2) The basis in private management.The derivation of managerialism from a private business model is a source of criticism. The public sector might be so different that generic or private sector models of management become irrelevant to its operations.(3) ‗Neo- Taylorism‘.With its emphasis on the control of government spending and decentralizing management responsibilities with targets and performance measurement systems, Pollitt sees a management philosophy in the new model that he describes as ‗neo- Taylorian‘ (1993).(4) Politicization.There are two sides to the question of politicization.① It could be said that those making arguments about ‗politicization‘ ignore th e fact that the public service is fundamentally a political instrument.②Politicization could lead to problems of the kind that Woodrow Wilson and the reform movement in the 1880s tried to repair. Wilson argued that separation between politics and administration would reform the spoils system and reduce the corruption that system engendered.(5) Reduced accountabilityConflicts may occur between the concepts of public management and public accountability.(6) Difficulties with contracting-out.While it is easy to argue private markets are superior and efficiencies will result from privatizing government activities, implementation is not simple.(7) Ethical issues(8) Implementation and morale problemsChapter.5The Role of Government5.1 IntroductionWhat government should or should not doneeds to be of fundamental concern to publicManagers.The debate is now whether governmentsshould have no role, but what that role shouldBe.Public sector and private sector.IntroductionIn mixed economies there must be somedemarcation between those activities that fall ineither the public sector or the private sector.Since the mid-1970s, most OECD nations haveundertaken a reassessment of the role of theirpublic sectors.IntroductionThe current debate on the role of governmentmainly concern its economic aspects: should itprovide the goods and services it does, orshould some be handed to the private sectors?Should it subsidize or regulate to the extent itdoes? Such questions also raise the very politicalmatter of how various members of the communityperceive and value the things government does.5.2 The need for a public sectorBy convention, the economy is divided between the private and public sector.Governments are command-based.Markets are voluntary.Setting up a strict dichotomy between the private and public sectors is rather misleading.The private sector relies on government for infrastructure and the system of laws, without which markets could not operate.Government relies on the private sector for the production and supply of goods and services, and for tax revenue.Private and public managementThere are several reasons why the two sectors are not the same, and cannot be the same.(1) In a way not characteristic of the private sector, public sector decisions may be coercive.(2) The public sector has different forms ofaccountability from the private sector.(3) The public service manager must cope with an outside agenda largely set by the political leadership.(4) The public sector has inherent difficulties in measuring output or efficiency in production.(5) The public sector‘s sheer size and diversity make any control of coordination difficult.‗Government‘ and ‗governance‘Government is the institution itself, is the subset that acts with authority and creates formal obligations.Governance is a broader concept describing forms of governing which are not necessarily in the hands of the formal government. It mean the processes and institution, both formal and informal. It also argue that, with globalization, government is becoming more diffuse and that instead of governments having a monopoly over issues of governance there are many players.5.3 Market failure as the basis for public policyThe market mech anism alone cannot perform all economic functions; public policy is needed ‗to guide, correct, and supplement it in certain respects‘.The key kinds of market failure .Public goods.Externalities.Market transactions often have effects on third parties, or on the environment, that only government action can alleviate.Natural monopolyGovernment involvement need not mean direct government provision, and there is now a worldwide trend to privatization of such services but with some form of government regulation attached.The key kinds of market failure .Imperfect information.Market theory does assume perfect information for buyers and sellers. To the extent that information is not gained, especially by the buyer, markets can be less than optimal.Limitation of market failureSome people think market failure may result in too much government. Other people agree it may artificially reduce the scope of government action.5.4 Instruments of governmentGovernment provision Subsidy Production RegulationGovernment provisionDirect provision by government through the budget forms the major part of its operations.SubsidySubsidies vary widely but could include subsidies to farmers or industry, or to private bus companies or private schools.ProductionUnlike provision, production takes place away from the government budget, and users are charged in the same way as if the items were provided by the private sector.。
