The changing role on how the government should act in order to improve and guarantee an adequate public service delivery has come to an era where the concept of New Public Management (NPM) is introduced to replace the practice of so called ‘red tape’ bureaucracy. The concept suggests new management techniques and practices that involving market type mechanisms related to private sector practices in order to bring changes to the management of government in making public service delivery. The reforms try to redefine the role and character of government institutions to be more market and private sector oriented.
The reform efforts have been commenced first by developed countries from the late 1970s to the 1980s, and then followed by developing and transitional countries in recent years (Larbi, 2006). The economic crisis in developed countries led to the search of new ways in managing and delivering public services and redefining the state’s role. Similar thing also occurred to developing countries that was experiencing economic and fiscal crisis that led to the rethinking of state-led development that involving bigger size, functions, and the cost of state and its bureaucracy. The idea is how to strongly endorse the market and competition to the private and voluntary sectors and leaving the practice of strong state where everything is controlled and done by the state.
However, the idea of NPM has raise a question of whether bureaucracy should still exist or, even more, would still be the essential core element of public administration. The paper will discuss about this question and find out what would be the answer. The outline of this paper will firstly discuss about the essence of bureaucracy in the practice of public administration. Afterward, it will introduce what and how does the NPM works in the practice of organising and managing public service. Finally, this paper will analyse whether bureaucracy would still be the essential core of public administration although NPM is being implemented.
What Is Bureaucracy?
Common citizens might just think that bureaucracy is a burden in public administration because of its inefficiency, long chain of decision making, self interest, and other bothersome reason that makes it undesirable form of administration. In the United States, public bureaucracy has gain wide scepticism and reached a high point as a major theme in the Reagan administration. The president contempt on bureaucracy was supported by public opinion polls, which had been detecting a widespread conviction that the government is wasteful and ineffective, and much of the concern aimed on public agencies and their employees as the major part of the problem (Milward and Rainey, 1983).
On the contrary, there are also views that think bureaucracy in more positive term with their own evidence. For instance, merit based bureaucracy can fosters economic growth in developing countries (Evans and Rauch, 1999). It can also contribute to the effort of poverty reduction (Henderson et al, 2003). Furthermore, bureaucratic rules are considered to have a contribution in promoting democratic equality because those rules do not make differentiation of wealth and other resources among citizens that they serve. These two standpoints, negative and positive, about bureaucracy forced us to understand more about the substance of the so called “Weberian” state structures.
In the view of public administration, bureaucracy means much more than those negative characteristics mentioned above because the term “bureaucracy” in serious administrative literature mentioning a general, formal structure elements of organisation, particularly government organisation (Stillman, 2000). The most comprehensive, classic formulation of the characteristics of bureaucracy was generally acknowledged as the work of a German scientist, Max Weber. He pioneered the term “bureaucracy” by saying that “bureaucracy is the normal way that legal rational authority appears in institutional form, it holds a central role in ordering and controlling modern society, also it is superior to any other form in precision, in stability, in stringency of its discipline and in its reliability”. Weber thought that bureaucracy is indispensable to maintaining civilisation in modern society. He suggested that although a lot of people are saying about the negative views of bureaucracy, it would be impossible to think that administrative work can be carried out in any field without the existence of officials working in offices.
Weber noted three of the most important major elements of the formal structure of bureaucracy, which are the division of labour, hierarchical order, and impersonal rules. Firstly, specialisation of labour means that all work in bureaucracy should be divided into units that will be done individuals or groups of individuals that has competency in accomplishing those tasks. In other words, the specialisation of labour brings out the idea of professionalism in administrative bureaucracy. Secondly, the hierarchical order in bureaucracy that is meant to separate superiors from sub ordinates in order to recognised different authority, responsibility, and privileges. It also meant as a base for remuneration of employees and a structure that will enable a system of promotion to the employees. Thirdly, impersonal rules that form the means of a bureaucratic world. It limits the bureaucrats in any opportunities for arbitrariness and personal favouritism because their choices are restrained by legal bureaucratic rules that provide systematic controls of sub ordinates by superiors.
Those major elements of bureaucracy derived from what is known as The Weberian ideal type, which suggested four revolutional thinking in public administration. First is the concept of recruitment for the officials which is not supposed to be based on personal relationship but more to a merit based recruitment. Second is the point of view that servants should give their loyalty to the community not to individuals or groups. Third is the mentality aspect of the servants where they are pressured in improving public welfare so they have to eliminate the practice that give opportunity for rent seeking and fraud, which will inflict the public welfare. Last concept of ideal type is that employment should be subject to job performance not on political support.
The Concept of New Public Management
New initiatives introduce new management technique, which include not only structural changes but also attempts to change both process and roles of public sector management. Wide drafts of initiative and change processes in the UK public services have taken place since the 1980s (Ashburner et al, 1994). Furthermore, a survey conducted by the Organisation for Economic Co-operation and Development (OECD) in early 1990s has concluded that new management techniques and practices that involving market type mechanisms associated with the private for profit sector would bring changes in countries’ public management that have wide governance, economic and institutional environments (OECD, 1993a). Those technique and practice changes have then being labelled as the New Public Management (NPM) or the new managerialism (Ferlie et al, 1996).
The search for new management technique in public sector administration was initially forced by some occurrence that happened worldwide. The first wave for reforms came up as a result of economic and fiscal crisis, political change, and criticism on over extension of the state. The next wave for reforms were mainly because of the role of donors, improvement in information technology, and pressures of globalisation that strongly promoted competition among countries.
Nevertheless, the concept of NPM still need to be clearly defined of what the new public management actually is, what made it distinct to be said of moving away from traditional public administration. The attempts to overview what kind of practice should be done in implementing NPM noted that there are at least four new public management models (Ferlie et al, 1996) that can distinguish it with the traditional public administration. The models meant to be the initial attempt to build the typology of new public management ideal types.
The first model is The Efficiency Drive that known as the earliest model to emerge. It represented a model that tried to make public sector more like businesses, which is led by high importance of efficiency. It increased attention to financial control, extension of audit, deregulation of the labour market, empowerment of less bureaucratic and more entrepreneurial management, and a greater role for non public sector providers. This first model of NPM sees public sector as a problem not solution because it was wasteful, over bureaucratic, and underperformed. The second model is Downsizing and Decentralisation on the management of public sector organisations. This model implemented some general organisational change, which include staff downsizing, increased contracting out, and increased decentralisation strategy. The model tried to represent public sector in facing issues about their replacement with the market. The third one called In Search of Excellence that had strong highlight on organisational culture. It define NPM as techniques and practices in shaping public sector organisational culture by promoting and forming values, rites, and symbols to show people how to behave at work. The fourth and last model called Public Service Orientation. This model tried to combine private and public sector management ideas by adopting private sector practices. It takes ideas from the private sector to be applied in the public sector organisation. The rise of Total Quality Management in order to achieve excellence in public service deliveries can be noted as one of the implementation for this model.
Overall, there seems to be only two core elements that exist in the concept of NPM. The first one is managerialism and the other one is marketisation and competition (Osborne and Gaebler, 1992). Managerialism includes the practice of decentralisation of authority, devolving budget and financial control, delayering and downsizing public sector organisations, implementing performance management, and forming executive agencies to do specific tasks in public services. While marketisation and competition stressed on the practice of contracting out, charging for public services, focusing on quality, and changing employment relationship. Larbi (2006) also mentioned those two core elements in a detailed table, which is also adapted from Hood (1991).
However, the market type mechanisms associated with private for profit sector, which is the life blood of NPM, also have a challenge to answer that what if the market fails. It comes to another perspective of NPM in anticipating market failure, which is regulating. The idea is quite paradox because if we discuss about new public management reform, usually it will talk about de-regulation and not re-regulation, but the state has to face the reality that the market will not always succeed. This where regulation is meant to, being an instrument to impose outcomes which would not be reached by the operation of free market forces and private legal rights (Ogus, 1994). Regulation meant to make the market works more efficient or make the monopoly provider to operate as if there were a competition. Nevertheless, the practice of how to regulate has also been an interesting topic of whether in the form of state control or on the basis of giving incentives.
Where Bureaucracy Stands In the New Public Management?
After reviewing the definition of bureaucracy and the practice of new public management, we have to answer two questions that arise in the beginning of this paper. The first question is whether bureaucracy would still exist in the implementation of NPM or otherwise should be abolish at all. The second question, as continuation from the first one if the result is yes, where does it stand in the NPM, would it supposed to be the core elements too?
The answer for the first question supposed to be yes, bureaucracy would still exists despite the emerging implementation on New Public Management. There are at least two reasons that can explain why bureaucracy will still exist. First of all, Weber suggested that bureaucracy can serve any master. This is in the meaning of whatever the form of a government, whether it is an authoritarian or democratic, bureaucracy would still be relevant. The facts that can be seen as evidence is what happened around the mid-1990s where ideas derived from neo-liberal economics began to falter as policy guides to economic development. A number of processes and events were responsible for this. The World Bank (1993, 1997) finally began to recognize the positive role that states could play. It became clear that the concept of the minimal state had theoretical flaws and led to policies that could be shattering for growth, most visibly in Eastern Europe (Henderson, 1998). Nevertheless, the ‘Washington Consensus’ came under pressure as a consequence of inappropriate policy responses to the East Asian economic crisis (Chang, 2001). The recent writing by Chang (2002) revealed that the now developed world, including its most neo-liberal exponents, Britain and the United States did not pursue free market policies as their roads to riches, seems destined to advance this process. The second reason is the Weberian perspective actually does not negate the positive effects of strengthening market institutions, but it does postulate that bureaucratically structured public organizations, using their own distinct set of decision making procedures, are a necessary complement to market based institutional arrangements (Evans and Rauch, 1999).
Then the second question, what about its significance in the NPM. More precisely, would it still be the core element in the practice of NPM. There are some arguments that we can use to answer this question. As noted before, Weber argued that public administrative organisations, which are characterised by meritocratic recruitment and a predictable long term career rewards, will be more effective at facilitating capitalist growth than other forms of state organisation. This hypothesis certainly cannot be dismissed just because of the fact that people who call themselves bureaucrats have engaged in rent seeking and fraud activity, or that corrupt governments have undermined economic growth (Evans and Rauch, 1999).
Henderson et al (2003) explained in their paper that meritocratic recruitment can be expected to lead to organisational effectiveness because of several reasons. Firstly, it can ensures that staff has, at the very least, a minimal level of competency to fulfil job requirements. Secondly, it tends to encourage organisational coherence and an organisational spirit, where it is expected that this will eventually help to raise the motivation of staff. Finally, higher levels of identification with colleagues and the organisation help to raise the levels of shared norms and increase the intangible costs of engaging in corrupt practices. Moreover, bureaucracies that offer rewarding long term careers have greater possibility to perform well because it encourages more competent people to join the organisation, which, in turn, further increases organisational coherence and makes attempts to conduct corrupt practices by individuals will be less attractive because the costs of being found out are very high.
Another argument comes from an empirical study, which is written by Evans and Rauch (1999), to test the significant correlation between bureaucratic effects of the Weberian State Structure with economic growth. Evans and Rauch constructed a “Weberianness Scale” that tried to measure the degree to which core state agencies in various countries were characterised by meritocratic recruitment and offered rewarding long term careers. After that, they compute the scores on the scale for 35 semi industrial and poor countries. Then, they analysed the correlation of these scores to the total growth of real GDP per capita in those countries from 1970 to 1990, and found out that there is a strong and significant correlation between the “Weberianness Scale” score and economic growth on those respective countries. Furthermore, they also analysed and concluded that the East Asian countries, which have higher “Weberianness Scale” score and economic growth than African countries, has demonstrated a high performing key institutional element of the scale that resulted in economic growth.
Almost similar arguments also came from James Tobin, the winner of Nobel Prize for Economics in 1981. He observed that the rapid growth of the public sector in the United States had actually accompanied the greatest economic advances of any country in history, and that he knows of no evidence that government spending and growth are responsible for current economic difficulties. These arguments should at least give us a hint that bureaucracy would remains to be the core element in public administration.
Critiques about inefficient, red tape, and waste bureaucracy has raise an idea to abolish and make it as minimum as it can in order to provide and improve public welfare. This has lead to the concept of making business-like public sector, where it is assumed that the practice will bring goodness to public welfare. However, it has been revealed that the oversimplified calls on business-like public sector, which impose free market approach, have eventually being falter. This has made some modification on the practice of New Public Management.
Some arguments have shown that bureaucracy should remains as the core element in the practice of NPM. It is required not just to anticipate market failures but also to make sure that the market, especially for monopolistic public service, would feel that there is a competition, through establishing sets of regulations. Moreover, empirical study has proved that the role of bureaucracy is actually significant for the economic growth. Thus, there are strong reasons not just to put bureaucracy in the practice of NPM, but also make it as an essential part of the New Public Management.