Call for New Public Management

Ruchika Khattar  

• There are less than 36 safai-karamcharis per 10,000 citizens of Delhi
• The per-head cost of primary education is higher in government schools than in private schools
• The Prevention of Food Adulteration department has 28 inspectors to oversee 1.5 lac registered food establishments. At one outlet per inspector per day, an outlet would be inspected once in 17 years.
• More than 80% of the students who pass class V from MCD schools do not know how to read or write their names
• The Delhi Transport Corporation employs 12 people per bus and incurs a monthly loss of Rs. 25 crore, while private operators employ 6 people per bus and make profit.

These statistics don’t do much to us any more, do they? They are surprising, yet not shocking. They are unexpected, yet familiar. Underperformance, reprimand. Incompetence and redefinition of responsibility is what comes to our minds. 

Perhaps the stark contrast is best explained by Friedman’s reasoning of spending money. There are four ways to spend money.

• Spend your money on yourself
• spend someone else’s money on yourself
• spend your money on someone else
• Spend someone else’s money on someone else.

Clearly, public administrators fit into the last category. And THAT is the basic difference between the private and the public sector. 

In the private sector, there is no scope for under-performance. Profit and loss accounts are by definition, required to look more green than red. Employees want to move up the corporate ladder. You perform you move up. You don’t and you are pushed to the lowest rung. Most bureaucracies around the world, and especially the kleptocratic one we in India seem to have nurtured, are really going against the basic laws of nature: Survival of the Fittest. Incentives, rewards and recognition, ownership of resources and ensuing responsibility for results…these very basic elements that make the workplace a vibrant competing ground are all but absent.

One example of incessant and unpunished inefficiency is Garbage collection. What is the bureaucrat in charge of this particular public service supposed to do? He is employed to ensure that the city is kept clean He has an entire retinue of staff and equipment to deliver this cleaning service. But what does he really do?  The chief spends most of his time processing ‘inputs’ to his bureau: recruitment, leave, disciplinary action, purchase of equipment (in other words, tenders for jhadoo, pohncha and wheel barrows!). Is the bureau chief left with enough time and resources to monitor the real performance of his bureau…has he prioritized to check the level of cleanliness in the city? As months flow into years and public managers across the country dwell in their forts of pending files, essential public services are sacrificed repeatedly. 

The problem posed here isn’t new. In fact, the words ‘corruption, inefficiency’ now seem as old as ‘bureaucracy, government service’ themselves. What is new, though, is the practice of New Public Management: a new style of administering public service, one that attempts to strip government bureaus of their red tape to reach down to the basic function they are supposed to perform. 

This model of Public Administration prescribes ‘contracting out’. The public manager’s work consists of identifying the work, stating how it would be done, advertising for bids, drawing up transparent contracts and supervising the work to ensure that it is performed as per contract. The big difference is the entry of the market. The moment you make transparency and competition the pillars of public management, good business sense and economics prevail. Costs are private, so efficiency must be maximized. Contracts are competitive, not monopolized, so delivery must be impeccable.

A study by Foster and Plowden (1996) defines the following points as the basic thrust areas in NPM : 

1. Separating Provision from Production: The state provides, does not produce. Production is private territory. The state steers, the private sector rows. The ship thus moves rather well. This approach can be effectively implemented in major functions of the government, such as Primary Education, Food Aid, Transportation….and of course, good ol’ garbage collection.
2. Serving consumers: Public managers, and their bureaus exist to help the public. Public is the customer. Well, then serve the customer. The government has a natural monopoly over city information…then why wait for an Eicher to produce an efficient and useful map of the national capital? Mumbai direly needs more signage to help tourists find their way. Provide it.
3. Market pricing , not taxes : This may seem like a complex mix of politics and economics, but essentially, public managers need to prefer efficiency over equity to assign true value to these services. Hence, run departments as ‘independent profit centres’ to incentivize performance and keep efficiency alive.
4. Clean Subsidies: Students of economics wake up. Give your demand and supply schedule a parallel shift, not the swivel. Swivels change other prices and fail to deliver subsidies to target groups directly. Instead, use food stamps and educational vouchers that leave other market prices unaffected.
5. Extending competition and choice: Competition favours the most cost-effective outcome. Let it prevail. In addition, vouchers and stamps leave recipients with all the choice.
6. Decentralizing provision: This is in line with the principle of ‘subsidiarity’  which says that provision should be left to the lowest rung of government that can effectively look after it. Why assume that the state government knows better about what to do with cow shelters in a remote district, when the panchayats are more hands-on? One great example of this decentralization comes from Switzerland…Swiss citizens will proudly tell you that they do not know the name of their President!
7. Empowering communities: Makes citizens capable of responding to the need for public services in innovative and cost-effective ways.
8. Deregulation: Will end the domination of the rule–bound red tapism of bureaucracy, a major hindrance in connecting rationality to public management.

In 2003, NPM is really a movement among liberal administrators worldwide. It has generated interest and delivered startling results in the USA, Western and Eastern (erstwhile socialist states included) Europe, Scandinavian countries, New Zealand and several Third World nations including Tanzania, Ghana and the Philippines. Bill Clinton, during his presidency, lauded an NPM document on reinventing the government and accommodating entrepreneurial spirit in public management with an uncomplicated comment: “This is the Blueprint”.  

NPM does not feign perfection. Implementation can be rocky in the face of enforcement of contracts, subjective levels of transparency and accountability etc. Clearly, our problem isn’t simple enough to fit the socket-plug solution. At the same time, this structure of public management provides a no-nonsense, result-oriented approach to bringing public servants closer to performing their real job at minimum tax-financed costs. New Zealand is one country where NPM is now considered ‘the system’. From a point in 1984 where the country went in for market based reforms after becoming one of the poorest in the OECD, to today, where town halls are sold out and mayor councils meet in coffee shops, the country has come a long way. It has not been a complete joyride, but no one wants to revert to the days of contributing excesses to a non-performing government. 

Most of the Great Indian Middle Class is a self-confessed prophet on two things : the strategy of the Indian cricket team and ‘what is going wrong with this great desh’. While the former can’t be dealt with justly here without hurting the sentiments of many an avid fan, the latter has been discussed to the point of cynical solutions and subsequent irrelevance. NPM, then, offers a great opportunity to marry reason and bureaucracy, performance and the services, empathy and  the public. This could well be the ideal way to start again and cultivate an effective interface between policy makers and policy users. 

Sources : Centre for Civil Society, New Delhi, Sauvik Chakraverti