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NPM redirects here. For other uses, see NPM (disambiguation)

New Public Management is a management philosophy used by governments since the 1980s to modernise the public sector. New Public management is a broad and very complex term used to describe the wave of public sector reforms throughout the world since the 1980s. Based on public choice and managerial schools of thought new public management seeks to enhance the efficiency of the public sector and the control that government has over it. The main hypothesis in the NPM-reform wave is that more market orientation in the public sector will lead to greater cost-efficiency for governments, without having negative side effects on other objectives and considerations.

Jonathan Boston (1996), one of the early writers of NPM, identified several ways in which public organisations differ from the private sector:

• degree of market exposure--reliance on appropriations
• legal, formal constraints--courts, legislature, hierarchy
• subject to political influences
• coerciveness--many state activities unavoidable, monopolistic
• breadth of impact
• subject to public scrutiny
• complexity of objectives, evaluation and decision criteria
• authority relations and the role of managers
• organisational performance
• incentives and incentive structures
• personal characteristics of employees

Boston also identifies that reform tends to ignore these differences (see J. Boston, J. Martin, J. Pallot, and P. Walsh, Public Management: The New Zealand Model. Auckland: Oxford University Press, 1996).

Some modern authors define NPM as a combination of disaggregation (splitting large bureaucracies into smaller, more fragmented ones), competition (between different public agencies, and between public agencies and private firms) and incentivization (On more economic/pecuniary lines) (see Dunleavy, Margetts et al, 2006). Defined in this way NPM was the dominant intellectual force in public management outside the USA from the early 1980s to the early 2000s.

NPM, compared to other public management theories, is more oriented towards outcomes and efficiency through better management of public budget. It is considered to be achieved by applying competition, as it is known in the private sector, to organizations of public sector, emphasizing economic and leadership principles. New public management addresses beneficiaries of public services much like customers (another parallel with the private sector) and conversely citizens as shareholders.

Problems that become causes of this management school have less clarity (the need for greater inspection and supervisory) and miscalculation of public opinion, which does not always seek for mere efficiency but rather political solutions and, more or less always, for a compromise.^{[citation needed]}

Some authors say NPM have peaked. [see Hughes, Owen 2003 Public Management and Administration: An Introduction, 3rd ed. Bassingstoke. UK: Palgrave] Critics like Dunleavy et al. (2006) also now proclaim that NPM is 'dead' and argue that the cutting edge of change has moved on to digital era governance focusing on reintegrating concerns into government control, holistic (or joined-up) government and digitalization (exploiting the Web and digital storage and communication within government).

Privatisation of government seems prominent still however in Australia.

• public management
• public administration
• public sector reform
• public services

• Patrick Dunleavy, Helen Margetts et, 'New public management is dead: Long live digital era governance', Journal of Public Administration Research and Theory, (July 2006).
• The New Public Management and its legacy - World Bank summary of the NPM track record (1990)
• Analysis of NPM in one Japanese city