New Public Management

1
New Public Management The concepts
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Content
What NPM is addressing
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
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5
New Service Attitude
6
New Model of Control
3
Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
4
NPM an overview
1
New Public Management (NPM) is a management
culture that emphasizes the centrality of the
customer, as well as accountability for results
Philosophie

• Management culture that emphasizes the centrality
  of the customer (citizen gt external
  point/person to deliver to, e.g. other department
  gt internal)
• Transparency about resource allocation and
  results
• Organization that promotes decentralized control
  through a wide variety of alternative service
  delivery mechanism(including quasi-markets
  public and private service providers are
  competing for public budgets)
• NPM represents the idea of a cascading chain of
  contracts leading to a single principal who is
  interested in getting better results within a
  sector portfolio over which he/she has
  significant authority
• NPM is the attempt to transfer management
  instruments from the private sector in a modified
  way into the public administration

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1
NPM an overview
Criticism of public administration is growing
Most important points of criticism

• Public administration is too slow
• It is too expensive
• The quality of what it does is simply poor
• Public administration is too far removed from the
  citizens to be able to cater for their interests.
  
• Public administration provides poor information

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NPM an overview
1
More transparency, more efficiency and more
quality as well as reduction of expenses are the
main targets of implementing the NPM
Targets

• More transparency for citizens (tax payer) and
  politicians through
• Increase of flexibility, effectiveness and
  efficiency of public administration
• Improvement of quality of the public services
• Reductions of expenses (more effective public
  spending)

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1
NPM an overview
New Public Management consists of different
Elements
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Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
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Lean State
2
The pure meaning of the concept of a Lean State
is A state reduced to the minimum of duties that
have necessarily to be conducted by the public
hand

• Process of reducing tasks, services and
  deliveries of the public administration

Meaning in practice
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Lean State
2
The concept of Lean State, then analyses what has
to be taken over at which standard of quality by
whom
Additional aspects

• In addition to that it is necessary to check
  whether regulations (laws and ordinances) are set
  out in a way that is actually necessary and
  sensible
• Cutting back on excessive regulation and
  re-establishing the freedom of citizens
• Reinvent necessary regulations and legal
  provisions required for people to be able live
  together in freedom.
• Developing modern forms of co-operation between
  the state and the private sector in order to
  trigger synergy effects (PPP Public Private
  Partnership)

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Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
12
Separation of Decision Making Levels
3
Separation of the strategic from the operative
level

• Strategic level

Elected political representatives

• Deciding what has to be done
• Set target and timeframe
• Define budget

• ExampleProvision of school buildings

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Separation of Decision Making Levels
3
The task and responsibility sharing between
politics and administration is not always clear
Observations
Politics

• Politicians try to influence processes inside of
  the administration
• Interventions disconcert the administrative staff
  and lead to a lack of motivation
• Example Budget Planning
• Politicians decide about how resources should be
  allocated within public administration
• Politicians are not qualified to judge how many
  staff equipped with what kind of funds will be
  required to provide a certain administrative
  service

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Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
15
Lean Management
4
Lean Management is a work model in the private
sector which transfer into the public
administration makes it possible to work more
efficient
Basics of Lean Management
1

• Considerations of economic efficiency
• New definition of "waste everything that does
  not benefit the citizen

Efficiency
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Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
17
New Service Attitude
5
Public administration is no longer a tool of
coercion wielded against unpredictable citizens
Public Service delivers quality and satisfies its
customers

• Fundamental Mental change Citizen becomes
  customer Customer could be also an other
  departments a unit is delivering to
• The customer is always the king!
• Customer pays administration (tax/fees), he/she
  can expect value for money
• Customer-Satisfaction as target (measured by
  surveys)
• Knowing what customers need
• Performance related payments
• Thinking in products the positive description of
  the objective and purpose of a service
• Organizational changes more customer orientated
  (transparency, easiness of access for services,
  save time of customer)

New Service attitude
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Content
NPM an overview
1
2
Lean State
Separation of Decision Making Levels
3
Lean Management
4
5
New Service Attitude
6
New Model of Control
19
New Model of Control
6
The core of the NPM is the accountability for
results
Elements of the New Model of Control
New Model of Control
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Content
A
Appendix
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Appendix
A
There is a clear division of labour and power for
decisions between the different levels in Germany
European Union

• Agriculture
• Foreign trade
• Steel, coal
• Currency
• Other political fields according to agreements

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New Public Management in German Governments

• In all times of German history since Bismarck,
  but especially in the 1960s, 1970s and 1980s
  there was an increase of selfdefined tasks by the
  governments.
• Politicians gave the impression that they were
  responsible for all aspects of citizens life and
  that the state would provide a full risk
  insurance for their people.
• As a result public administration and public
  spending increased immensely, primarily in the
  social sector.
• In the consequence the demand of public finance
  increased on all governmental levels.
• Hence, on the one hand taxes and fees were raised
  continuously, on the other new taxes and fees
  were set up.

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New Public Management in German Governments

• As mentioned before there is a clear division of
  duties and power for decisions between the
  different governmental levels in Germany.
• Therefore there is also a clear division of
  financial allocation between these levels, only
  the European Union does not have its own
  taxation, it receives payments from ist members.
• All together, we have 30 different types of taxes
  and fees in Germany
• Joint Taxes 6 types are taxes, which are (not
  equally) divided between the Federal Government,
  the Federal States and the Municipalities, these
  are mainly all kinds of income taxes and the
  value-added tax.
• Federal Taxes funds exclusively used for the
  duties of the Federal Government - mainly mineral
  oil tax, tobacco tax, liquor tax.
• Federal State Taxes funds exclusively used for
  the duties of the states - mainly motor vehicle
  tax, property tax, inheritance tax, beer tax.
• Municipality tax trade tax, real estate tax.

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New Public Management in German Governments

• Especially by the end of the 1980s and in the
  early 90s it became obvious that the overblowing
  public administration was impossible to finance,
  even with increasing depts.
• The first bad trick was that a higher level of
  government would make political decisions and
  burdened the financial consequences to a lower
  level of government.
• In the 1990s it became evident that the German
  public administrations could not continue like
  this without the threat of a general collaps -
  especially the citizen perceived this situation.
• The idea of a lean state became more
  attractive, but there were difficult obstacles
  for realizing the idea, because it is hard to cut
  personal, duties and funds.
• Especially reducing the personal is difficult
  because in all public sectors we used to have
  public officials for lifetime, people who are
  not allowed to go on strike but who cannot be
  layed off.

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New Public Management in German Governments

• While the Federal Government and the Federal
  States in Germany are still far away from a lean
  state and the principles of the NPM, many
  municipalities are quite far advanced in this
  concern. Because of an increasing lack of
  financial ressources corresponding to an increase
  of financial needs, many municipalities reacted.
• A structural reform in most Federal States in the
  mid 1990s allowed the direct election of the
  mayor and made the mayor not only head of the
  local council but also of the local
  administration.
• In the consequence this allowed easier reform and
  a new citizen oriented public administration, if
  the mayor would go for it.
• This politics becomes more and more attractive,
  because the concept is not only leaner and
  citizen friendlier but mainly cheaper.

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Appendix
A
Example for a German Municipal Corporation Act
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Appendix
A
Political culture suffers tremendous from
corruption
Effects of corruption
Causes for corruption
Defence against corruption

• Citizens lose trust in integrity of state, in its
  institutions and its representatives
• Is significant for fears about stability of
  community
• Instability of society

• Close cooperation between private economy and
  public administration
• State has strong monopoly-position,
  over-regulation
• Discrete information processes (insufficient
  transparency)
• Accumulation of power and responsibilities
• Insufficient transparency border between legal
  and illegal behaviour
• Insufficient consciousness of rules of law
• Low risk of consequences for offender

• Competition, public-private-partnership
• Transparency, controlling
• Clear (limited) responsibilities,
• Public offensive against corruption
• Rule models
• Separation of legislative and judiciary power/
  division of power
• Examples for legal consequences
• Independent media
• Free elections
• Education