New Public Management's Current Issues and Future Prospects
12 Pages Posted: 2 Jul 2007
The current stage of New Public Management and possible ways for future development are reviewed, based on a literature search and on the results of an interactive session with over hundred public sector managers in The Netherlands. We focused on three main themes: (1) rearranging organizational relations between entities in the nonprofit sector; (2) reforms in the P&C function; and (3) the introduction of accrual accounting. The respondents appreciate that much has been done over the past years in rearranging organisational relations and improving accountability. Most respondents expect structural arrangements between public sector entities to become even more complex and multistructured in the near future. This opinion resembles the OECD's position that 'governments must keep adjusting their structure to remain relevant' (OECD, 2005, p. 205). NPM reforms have to a certain extent contributed to improved efficiency and effectiveness, although opinions appear to be divided about the question to what extent improved P&C systems directly impact on the work and performance of professionals. Respondents from govenrment appear to disagree, whereas respondents from local government and education think improved P&C will impact professionals' work and performance. Some dilemmas could be identified, such as between entrepreneurialism and accountability and between the use of incentives and dysfunctional behaviour. Most respondents do not consider accrual accounting the standard for future financial reporting, although respondents from local government and independent nonprofit organisations are much more supportive of accrual accounting and these groups already have some experience with this system. A basic problem for accrual accounting seems to be its limited potential to support political decision making.
Keywords: new public management, public sector, planning and control, accrual accounting
JEL Classification: M40, M41, L30, L31
Suggested Citation: Suggested Citation