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New Public Management, Reinventing Government, and Re-engineering

Organizations
New Public Management, Reinventing Government, and Re-engineering
Organizations are three models in the field of Public Administration that emerged in
the 1980s and 1990s. The concepts of these models in public sector reform came
out of the desire to transform government towards economy and efficiency without
compromising effectiveness of service delivery. It seeks to combat incompetence,
inefficiency, redundancy, rigidity, and the problem of oversized staff that characterize
government bureaucracy. Essentially, the organizational reforms the models
advocate geared towards not only being service-oriented but equally important being
customer or client-oriented.
New Public Management
New Public Management (NPM) began in the United Kingdom during the
administration of Margaret Thatcher. However, it has also been practiced by some of
the members of the Organization for Economic Cooperation and Development
(OECD) which include Germany, Canada, and Netherlands (Brillantes and
Fernandez, 2008). OECD lists the following NPM characteristics:
1.
2.
3.
4.
5.
6.
7.
8.

Strengthening steering functions at the center;

Devolving authority and providing flexibility;
Ensuring performance, control, and accountability;
Improving the management of human resources;
Optimizing information technology;
Developing competition and choice;
Improving the quality of regulation; and
Providing responsive service (Kickert, 1997: 733; as cited in Ocampo, n.d.)

The above-stated characteristics can be summarized by four management

principles: delegation, performance, competition, and responsiveness to clients.
Delegation includes privatization and devolution of authority. Performance is
measured by efficiency, effectiveness, and economy. Competition involves
contracting out or outsourcing of processes. Responsiveness to clients is providing
accountability and transparency in service delivery.

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According to Brillantes and Fernandez (2008), the quintessence of NPM

practice can be cited in the administrative reforms of New Zealand. For instance, the
government of New Zealand privatized its major public functions, shifted their civil
service system towards performance orientation and productivity measures,
streamlined its bureaucracy, and adhered to the tenets of managerialism. NPM was
also implemented in the United States particularly in the conduct of the National
Performance Review under the administration of President Bill Clinton. The National
Performance Review sought to improve the over-all performance of the federal
government (Ibid).
In the Philippines, NPM concepts have been practiced both in the national
and local levels. For example, the privatization of the Metropolitan Waterworks and
Sewerage System (MWSS) and the National Power Corporation (NAPOCOR) were
tied up to a loan provided by the Asian Development Bank (ADB). The two agencies
were able to make structural adjustments that enabled it to become pro-market and
income-generating. The Land Transportation Office (LTO) also outsourced its
services particularly in the application and renewal of drivers licenses that cut off
processing time and red tape. In the local level, Naga Citys E-governance projects
provided its citizens access to information on the city policies, programs, and
operations through the internet. The internet-based programs also have feedback
mechanisms that allow mobile users to send inquiries, complaints, and suggestions
via SMS and get a reply within 24 hours.
Reinventing Government
Reinventing Government was proposed by David Osborne and Ted Gaebler in
their book: Reinventing Government: How the Entrepreneurial Spirit is Transforming
the Public Sector published in 1993. They argue that hierarchical organizations and
centralization of bureaucracy have become dysfunctional, ineffective, and inefficient
vis--vis the rising expectations of constituents and the limited resources of
government.

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The philosophy of reinventing government is expressed in the following

principles (Osborne and Gaebler, 1993):
1. Catalytic government;
2. Community-owned government;
3. Competitive government;
4. Mission-driven government;
5. Results-oriented government;
6. Customer-driven government;
7. Enterprising government;
8. Anticipatory government;
9. Decentralized government;
10. Market-oriented government
In a catalytic government, various sectors of society are involved in the
management of public affairs. This principle includes NGO partnerships, publicprivate partnerships, and privatization.
A community-owned government mobilizes citizen participation in government
affairs. The citizens are empowered to take on responsibilities in public programs
rather than solely depending on government services. Examples include the
involvement of citizens in public housing and peace and order which basically give
them a sense of ownership in their respective community.
A competitive government puts forth competition in service delivery. Osborne
and Gaebler (1993) emphasizes that competition breeds a sense of accountability as
public and even private service providers vie to keep their costs down without
compromising the quality of service delivery.
In a mission-driven government, the focus of government is not on rules that
result in red tape but on the goals and objectives of the institution.
A results-oriented government gives emphasis on outcomes not on inputs.
Accordingly, a results-oriented organization does not rely on the amount of budget in
order to produce results. It is more directed towards the impact of the program to the
beneficiaries or constituents.

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A customer-driven government treats citizens as customers and not merely as

receivers of public goods and services. As customers, they are entitled to the best
service available every time to completely satisfy their needs.
The enterprising government provides enterprising mindsets among public
servants. Government is characterized as spender of taxpayers money. It usually
resorts to taxation in case of budget deficits. However, an enterprising government
seeks to remove the habit of spending money. Instead, it seeks out other sources of
income by investing in income-generating activities and using the profits to augment
public services.
The anticipatory government addresses the cause of problems and not merely
reacting to situations as they come. Osborne and Gaebler (1993) noted that fire
departments have been professionalized to suppress fire and not in its prevention.
Police departments have also been adept in apprehending criminals and law
violators but do not help the communities in preventing crime. The anticipatory
government is composed of agencies with public servants who are proactive and can
anticipate future situations before they come.
A decentralized government is entrusted with authority to make fast decisions.
It does not rely on central authority that makes the processes tedious and timeconsuming. A decentralized government can make flexible programs and directly
involve the people by building sectoral participation.
A market-oriented government applies the laws of supply and demand in
service delivery. It addresses the needs and not only the wants of the community. It
invites businesses and investments and provides opportunities and incentives to the
people.
In Makati City, the practice of Reinventing Government is evident in the
programs and services of the City Government. The City Government of Makati
exemplifies that through government-initiated programs, the private sector, nongovernment organizations, and other government agencies can participate in the
delivery of public services.

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For example, the Makati Health Program, commonly known as Yellow Card
program, provides indigent constituents access to various health and medical
services for free. The City Government linked with the Makati Medical Center in
subsidizing the costs of the services. Another one is the Free Movies Program for
senior citizens and persons with disabilities. It offers the beneficiaries to watch free
movies any time at Glorietta 1 and 4, Greenbelt 1 and 3, and Power Plant cinema, to
name a few. Together with the Ayala Land, Inc., the Universal Management
Corporation, Waltermart, Rockwell Land Corporation, and Cash and Carry, the city
government has been successfully implementing the said program.
The Economic Enterprise Management Office is one of the income-generating
departments of the city government of Makati. Its Housing Division supervises and
manages the city-owned housing projects: the Makati Homes 1 and Makati Homes 2.
The housing projects serve to provide low-cost rental units similar to condominiums
in the metro. Another enterprising initiative of the city government is the Weekend
Waste Market. It was conceptualized as a garbage reduction program and is now
providing profits for the city. The Weekend Waste Market trades recyclable waste for
cash. The recyclables collected are then sold to participating recycling companies.
The city government has also focused on collection efficiency rather than imputing
additional taxes. The Barangay-based Real Property Tax Payment System has been
implemented as a computerized method of collecting real property tax. It has a
system of tracking taxpayers, preparing billing notices, generating correct
assessments, and ensuring efficiency and real-time payment updates. The
computers in the barangay are connected with the Treasury Department at the City
Hall. Taxpayers only need to provide information about their property for the
computation of their tax due. After payment, they are provided with electronic receipt.
The entire process only lasts for less than five minutes.
Re-engineering Organizations
Re-engineering Organizations or Business Process Re-engineering (BPR)
was introduced by Hammer and Champy as an approach in improving performance,
efficiency, and effectiveness of organizations through the fundamental rethinking

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and radical redesign of business processes to achieve dramatic improvements in

critical contemporary measures of performance such as cost, quality, service, and
speed. (Hammer and Champy, 1993).
The tenets of BPR are the following:
1.
2.
3.
4.

Utilizing the power of Information Technology;

Breaking away from old practices and processes of operations;
Reviewing fundamental processes from inter-agency perspective;
Systematic searching for major improvements and breakthroughs in

processes;
5. Eliminating paper documentation in all processes;
6. Focusing on outcomes and processes and not on organizational functions;
7. Focusing on the client
BPR offers the opportunity for policymakers to scrutinize the rationale behind
rules and regulations and provide insights to discard and rewrite the same.
Hammer and Champy (1993) cited examples in the application of BPR in the
private sector. The IBM Credit Corporation, a subsidiary of IBM, approves credit
applications for the purchases of computers, software, and services that usually take
six days up to two weeks. Because of this delay in the process, potential customers
were driven away from the deals. The IBM Credit Corporation soon found that the
reason for the delay was traced to the various offices that the applications had to go
through prior to approval. To solve the problem, the corporation reengineered the
process by hiring generalists who took care of the entire process from beginning to
end. The application process was dramatically reduced to ninety minutes on
average. Another example is the Ford Motor Company whose accounts payable
department was made up of more than 500 employees. After benchmarking with
Mazda that only employed 5 employees in the same department, Ford reengineered
its personnel and the processes of its accounts payable department. From 500
employees, it was able to reduce up to 125 employees.
In the Philippines, attempts at BPR in the government sector have been in the
reorganization of the bureaucracy. PD No. 1 of President Marcos referred to the
Integrated Reorganization Plan that decentralized and reduced the bureaucracy,

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standardized departmental organizations, strengthened the merit system, and

professionalized the civil service system. Under the Estrada administration, E.O. 165
was implemented and laid the foundation for the Re-Engineering the Bureaucracy for
Better Governance Program that strengthened and streamlined the bureaucracy
under the executive branch, government-owned and controlled corporations, and
SUCs. During the administration of Gloria Macapagal-Arroyo, the DBM and CSC
pursued the Rationalization Program pursuant to E.O. 366. The program reviewed
the operations and organizations of government and reengineered its vital functions
to improve efficiency, economy, effectiveness, and accountability.
References:
Brillantes, Alex Jr. and Fernandez, Maricel (2008). Is there a Philippine Public
Administration? Or Better Still, For Whom Is Philippine Public Administration? A
paper presented in the public colloquium held on June 26 27, 2008 at the UP
NCPAG.
Hammer, Michael and Champy, James (1993). Reengineering the Corporation: A
Manifesto for Business Revolution. New York: Harper Business.
Ocampo, Romeo B. (n.d.). Models of Public Administration Reform: New Public
Management (NPM). Asian Review of Public Administration, pp. 248 255.
Osborne, David and Gaebler, Ted (1993). Reinventing Government: How the
Entrepreneurial Spirit is Transforming the Public Sector. Harmondsworth: Plume.