The Crimson Press Curriculum Center

First Page and the Assignment Questions:
    A central focus of public management over the last three decades has been to minimize waste and ensure efficient and effective public services (Nolan, 2001). Efforts to do so have resulted in four of what Hood (1991) calls “megatrends:” an attempt to slow down or reverse government growth, a shift toward privatization and quasi-privatization in service provision, an increase in the use of information technology, and a focus on improved policy design, decision styles, and inter-government cooperation.

   These trends are part of a New Public Management (NPM) paradigm (Hood, 1991,1995), which depicts governments as leaner, more effective entities—ones that can do “more with less” (Osborne and Gaebler, 1992; Koppenjan and Klijn, 2004). To accomplish this, the NPM paradigm comprises restructured organizational units that have improved definitions of responsibilities and increased managerial autonomy. It envisions the elimination of unneeded bureaucratic procedures, and an emphasis on frugal behavior so as to minimize waste. It expects public officials to adopt managerial approaches that have proven successful in the private-sector, and, when appropriate, to use private sector contractors to deliver services so as to both decrease costs and improve quality. And, its emphasis on quality improvement includes efforts to measure output, results and performance, benchmarking them, whenever possible, against external standards. (Bestebreur and Farneti; 2004).

HISTORICAL BARRIERS TO THE NPM PARADIGM

   Unfortunately, for most municipal governments, the NPM paradigm is not at all descriptive. Rather, it constitutes an economic “ideal type”—a state of affairs, akin to a purely competitive market, that is sought in the abstract but never actually attained. Some of the reasons for this failure are historical, some a matter of uninformed choices by municipality managers, and some a result of limited creativity on the part of public officials. Indeed, in most industrialized countries of the world, one need look no farther than one’s own home town to find the absence of a management control system (MCS) that has restructured the town’s organizational units so as to create autonomy for the managers who run them, and clearly defined the associated responsibilities.

   Most observers also would note that their towns had not emphasized or measured outputs, results, or performance. Those that had done so most likely would not have benchmarked their results against external standards. And, if the town had developed contracts with private entities in an effort to decrease costs and increase quality, an observer would likely discover that the task of managing the vendors had not been incorporated into the town’s MCS in any meaningful way. In short, an external observer would not need to be very sophisticated to conclude that the idea of incorporating private-sector management approaches into the management of municipalities remains, for most cities and towns, an elusive pot of gold at the ephemeral end of a distant rainbow.

   In part, the difficulty municipalities have in exemplifying the NPM paradigm is a result of some unusual, and tricky, issues they face in designing their management control systems (Anthony and Young, 2003). For instance, the majority of a municipality’s senior management team consists of elected officials who must contend with many external forces and political influences that inhibit the implementation of a good MCS (Kotter and Lawrence, 1974). Moreover, because new programs often are political, they do not receive a rigorous financial feasibility analysis prior to implementation. At the same time, many programmatic objectives—such as “adequate” police protection or “appropriate” fire response time—are difficult to define and measure, let alone benchmark.

    Even from a financial perspective, the traditional territory of management control, a municipality’s efforts to measure performance are impeded by the fact that much of its revenue comes from property or other general taxes that are unrelated to the services provided to its citizens. Additionally, the use of fund accounting limits senior management’s flexibility to shift resources from one activity or program to another, thereby constraining mid-year programmatic adjustments when circumstances change or unforeseen needs emerge.10