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V



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I. What is NPM?
II. Emergence of NPM
III. NPM: Steering not rowing
IV. NPM in the Philippines
V. NPM and Governance
0{ 00 0 

è new paradigm that has emerged aimed at fostering a

performance-oriented culture in a less centralized public
sector (OECD, 1995) characterized by: closer focus on
results; REPL CEMENT OF HIGHLY CENTR LIZED,
HIER RCHIC L STRUCTURE BY DECENTR LIZED
M N GEMENT WHERE DECISIONS ND SERVICE
DELIVERY RE M DE CLOSER TO THE POINTS OF
DELIVERY { DECENTR LIZ TION ND DEVOLUTION};
DEVELOPING COMPETITION (to improve quality of
service and delivery) ± CHRISTOPHER HOOD
0{ 00 0 

† èM N GERI LISM´ (Christopher Pollitt) public

administrators are called èmanagers´

† èPOST-BURE UCR TIC P R DIGM´ (Michael

Barzeley) ± move away from traditional brcxy

† èREINVENTING GOVERNMENT è (Osborne and

Gaebler) ± entrepreneural gov¶t

† èREENGINEERING´ - Hammer and Champy

 0{ 00 0 

† èPUBLIC PRIV TE P RTNERSHIP (Wolfgang

Meyer) OR èM RKET-B SED PUBLIC
DMINISTR TION´ (Lan and Rosenbloom )

>Commercialization
>Privatization
>Contracting-Out
>Build-Operate- rrangement
 0{ 00 0 
† Various definitions of NPM have some points in
common:
>major shift from traditional P = results & personal
responsibility
>moving away from classic bureaucracy = flexibility
>more systematic evaluation of programs
>more on èsteering´ than èrowing´
>commercialization of government
functions
>value for money and cost-effectiveness
00{{!{{ 

U WHERE ORIGIN TED?

U WHEN ORIGIN TED?
U WHY SHIFT FROM TR DITION L P
TO NPM?
00{{!{{ 

U Started in 1970s in UK under Thatcher

government
U lso practiced in The Netherlands,
France, Germany, Switzerland and Spain,
among others in the 1980s
00{{!{{ 

U Reasons for shifting to NPM: situation in

1970s
1. Traditional P simply didn¶t work anymore
2. Declining revenue
3. Economic problems in 1970s
4. In search for a government that èworks better
but costs less´
5. Financial distress
6. Private sector was successful with its own
management techniques
00{{!{{ 

U Reasons for shifting to NPM: situation in

1970s
7. Dissatisfaction within public administration
8. Over-bureaucratization
9. Displeasure of citizens
10. More democracy/participation
11. Competition to attract business ± Globalization
and other developments
00{{!{{ 

U Reasons for shifting to NPM: Traditional

P vs. NPM
>Traditional P : highly-hierarchical, very centralized,
rule-bound
>NPM: highly decentralized, structure is flat and
lean, service delivery is closer to the people, public
managers are more empowered thus more flexible
> NPM offers a more realistic approach than TP
>TP : structure is too rigid and cumbersome and
slow for the new era of instant communication
00{{!{{ 

U Reasons for shifting to NPM: Traditional

P vs. NPM
>NPM: do away with tight hierarchical control by
delegating the discretion to lower levels
00{{!{{ 
U Countries that practiced NPM
> " 
 #
$ % &

# '
>

  

() 

&*
Situation: economic recession, opacity, lack of
productivity and hierarchy in the government.
Reform: rearranging responsibilities and
introducing a decentralized structure (Tilburg
Model); introduction of output budgeting,
performance indicators
00{{!{{ 

U Countries that practiced NPM

> !{ 
# +# 
,


&*
Situation: centralist governance and strong elitist
career civil service; administration is built on a
complex system of administrative law; local
governments had no regulatory and legislative
power; lack of local democracy
Reform: local autonomy thru 1982 ct of
Decentralization; decentralization & devolution of
tasks & responsibilities to lower levels of admin.
00{{!{{ 

U Countries that practiced NPM

> {!- 
./ 
) 

&*
Situation: classical hierarchical; traditional
principles of the civil service; dissatisfaction of
city managers, politicians, and other civil
servants;
Reform: development of the so-called èNew
Steering Model´ (internal organizational
reform,management contracts, decentralized
responsibility, budgeting,and accounting)
00{{!{{ 

U Countries that practiced NPM

> /00
{!1 
2! 
  
(
#)$ 3
&&
Situation: dissatisfaction with the old model,
financial pressure, deficiency in input, opacity,
inflexibility, bureaucracy and over-control of
operative decisions
Reform: Results-Oriented Public
Management
00{{!{{ 

U Countries that practiced NPM

> /0
&4*

Situation: transformation from a highly-

centralized state into a democratic politically
decentralized state after the Franco era
Reform: organizational redesign, budgeting by
objectives, human resource reorganization (e.g.
City of Barcelona, One-Stop-Shop policy in
1995); principles of accounting were
introduced
{{!{{ 

è IN SUMM RY, NPM W S CRE TED TO REMEDY P THOLOGY

OF TR DITION L BURE UCR CY TH T IS HIER RCHIC LLY
STRUCTURED ND UTHORITY-DRIVEN ND TO
CONSTRUCT GOVERNMENT TH T IS COST-EFFICIENT ND
MORE RESPONSIVE TO THE PEOPLE¶S NEEDS. THE
REFORM RESULTED TO S VINGS, IMPROVED PROCESSES,
IMPROVED EFFICIENCY, GRE TER EFFECTIVENESS, ND
MORE C P CIOUS/FLEXIBLE/RESELIENT DMINISTR TIVE
SYSTEMS. HOWEVER, NPM IS JUST IN ITS INF NCY ND
JUST LIKE NY OTHER THEORIES ND P R DIGMS, IT
ENCOUNTERED PROBLEMS & CRITICISMS DUE TO SOME OF
ITS WE KNESSES´
 00052/ 
) !.
)3

†

#6+(Hughes)
o Economics
R Public choice
R Results, Efficiency and Measurement
o Private Management
R Focus on results and objectives

Owen Hughes. Public Management and Administration: An Introduction (2nd Edition). 1998
!0! 0 {!7 
 00052/ 
) !.
)3

† 8{plus !{1{{10{ 
!0{ {{//{ 0 -(Pilar)

† (
#/
#5
o dministrative and political accountability
o Nationalism and Good Governance
o Public-Private Partnership in Poverty lleviation

#
9+
(Osborne and Gaebler, 1992)

1. Steer, rather than row

2. Empower communities to solve their own
problems
3. Promote and encourage competition rather
than monopolies
4. Be driven by mission rather than rules
5. Be results-oriented by funding outcomes
rather than inputs

#
9+
(Osborne and Gaebler, 1992)

6. Meet the needs of the customer rather than

bureaucracy
7. Concentrate on earning money rather than just
spending it
8. Invest in preventing problems rather than in
curing crises
9. Decentralize authority than build hierarchies
10. Solve problems by influencing market forces
rather than creating public programs
!61{/ ! 0
0!
61 {001/{!0{
† s of 1999, a total of 1.473 million personnel were
employed in government.

† 65 percent of all government employees are assigned

to national government agencies and only 27 percent
to LGUs.

† 35 percent - 40 percent of the national government

expenditures are channeled to personnel services
!61{/ ! 0
0!
!61{/0!0 0
 0

† resulted in higher costs in the delivery of

services offered by this privatized corporations.

† Fiscal deficit problems from debt incurred by

GOCCs
o Budget Deficit (2009): PhP 257 B
o National Debt (2009): PhP 4.164 Trillion
!61{/ ! 0
0!
{ {!0! 00{/ { 10 {
Causes:
† weakness of the legal and regulatory framework
† limited recourses available to resolve disputes
† high level of political intervention in the
commercial sector
† Greater cost of power and labor as opposed to
other neighboring countries in the region
† !!  0
!61{/ ! 0
0!
!61{ 0   {1{ 0/

† Election fraud
† bsence of modernized election system





99


† The role of technical consultants in the formulation of

reform interventions led to the introduction of some
NPM concept in the Philippines.
† many of the NPM inspired reform initiatives in the
Philippines are hastened by the presence of IT
infrastructures
† structural adjustment programs of multilateral lending
institutions like the World Bank, DB and the
International Monetary Fund (IMF) have contributed to
the ègrowth´ of NPM in the Philippines.
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