International Journal of Management, Economics and Social Sciences

2012, Vol. 1(2), pp. 42 49.

ISSN 2304 1366
http://www.ijmess.com

New Public Management Approach and

Accountability
Mahboubeh Fatemi and Mohammad Reza Behmanesh

Attar Institute of Higher Education, Mashhad, Iran

A new paradigm for public management, called New Public
Management, has emerged since 1980s that is formed to confront
the present problems. This model is originated from the fusion
of economic theories and private sector management techniques.
The most important particulars of this model are decreasing
government size, the decentralization of management authority,
the emphasis on efficiency, effectiveness and economy. This
paper examines how New Public Management (NPM) impacts on
fulfilling different aspects of accountability in the public
sector.
In
the
Traditional
Approach
of
Accountability,
politicians and civil servants are liable to elected authorities
but in this approach, they should be liable to people.
Therefore, in NPM there is a shift of accountability from the
political to the managerial sphere and from input and processes
to output and outcomes. The results show under this approach,
operational and managerial accountability fulfill political and
financial aspects of accountability.
Keywords: Accountability, corporate responsibility, management
JEL: G34

Increasing
transparent
improve

awareness

in

functioning
accountability

society

of

regarding

government
concept.

has
Now,

of

management

in

public

sector,

is

being

replaced with other models (Hughes, 1998). The

reasons of replacing is that

in

pattern

of

governments are forced to the systems of

traditional tendency toward being bureaucratic, is

budgeting,

financial

work on process rather than outcomes, and

reporting which uncovered new approaches of

emphasizing on instructions rather than emphasis

management. Administration government which

on results. Since 1970, many criticism about

also called model of traditional fundamental

incompetent bureaucracy was done such a way

campaign which was based on an accurate

that

model of the bureaucracy and under control of

instructions to modify by results. Traditional

political leadership. Default fundamental pattern

pattern theories and how to operate now is old

of bureaucracy is that government officials must

and in any way does not consistent with today's

be neutral which is motivating factor for their

changing community needs (Hughes, 1998).

general interests, non-interference in politics and

Therefore

implementation

politicians.

management, with title new public management

Model of Traditional administration government,

was evident. This approach was used for the first

which is the strongest and most successful theory

time in 1980 when Prime Minister of England

accounting

of

and

guidelines

their

for

Manuscript received September 22, 2012; revised October 30, 2012; accepted
December 1, 2012.
Corresponding author Email: fatemi25@yahoo.com

forced

governments

new

to

approach

focus

for

formal

public

Margaret Thatcher, with a neoliberal approach of

governance has formed the restructuring of the

43
Fatemi and Behmanesh

public

sector

especially

under

the

reform

International Monetary Fund (IMF) fans ardent this

initiatives adopted by Thatcher in UK. In early

reform throughout the world.

1990s, above term were used to describe public

new public management, raised not only in

sector reform in Britain and New Zealand. These

industrialized

countries,

reforms include a conceptual plan was created

Organization

Economic

for the, structuring changes in organization and

Development, such as Australia, Canada, New

managing government.

In early 1990s, this

Zealand, England and America, but also in

approach in the United States with situation

developing countries such as India, Jamaica and

floating economic and difficulties in domestic

Thailand

provide services, was accepted and remembered

management.

it term "the People's Government . Problems

presented to Asian countries through support

such as accumulated debt and environmental

programs

changes external extreme, the role of public

International Monetary Fund (IMF). With this

sector has seriously questioned, and increased

trend, there are many possibilities that above

pressure for change management in the public

approach will extend to other countries in the

sector

to

future. The bureaucracy Because of intransigence

extension of this approach in the public sector,

based on legal system and top-down decision-

the question is whether this perspective able to

making processes, is annoying

performance public responsible as one of the

2003).

(Yamamoto,

2003).

According

are

also

members

considered

up by

of

the

Cooperation

Recently,

set

The principles of

this

the

new

and

public

principle

World

also

Bank

and

(Yamamoto,

basic responsibilities accepted by governments,

Formal bureaucracy have their own unique

in citizens as major supplier of financial resources

benefits, but at the same time it does not focuse

institutions the public sector? This paper is the

to grow individuals, rather than taking risks,

first

escape from risk strengthen to managers, rather

introduces

approach

new

public

management and principles and criticism has

than

been exerted on it and definition of responsible

resources into teach managers and ultimately

and its variants have been described and finally,

increases

has been investigated ability of this approach in

movement.

The

performance responsible public of governments.

acceptance

of

Importance
and
management

origins

of

new

public

efficient

use

your

of

resources,

confidence
1970s
policies

but

have

is

waste

slow

witnessed

reduced

of

in
the

size

of

government statrd a new period of theoretical

discussions

between

economists.

The

main

Today many countries, consider the principles of

reason of reducing bureaucracy government as

New Public Management (NPM) efficacious for

defined by theorists were twofold. The first reason

public sector reforms. This issue is evident by

is believed that the bureaucracy greatly restrict

growing number of countries that have suggested

individual liberty (Hughes, 1998). This discussion

these

Economic

turned to reduced the scope the government and

Cooperation and Development, World Bank and

bureaucracy. The second reason, economists

principles.

Organization

of

44
International Journal of Management, Economics and Social Sciences

believe that the traditional bureaucratic pattern

The

without

competition in the public sector that leads to

incentives

is

necessary;

therefore,

fifth

principle:

Moving

toward

greater

efficiency is also lower (Hughes, 1998). These

lower costs and better standards.

ideas will lead to public choice theory. This

The sixth principle: Emphasis on private sector

Theory is emphasized on the greater inefficiency

management styles.

in government. Thus, inefficiency of government

The seventh principle: Emphasis on efficiency,

can be reviewed models and corrected operations

effectiveness and economic efficiency to use the

and their activities is based on market concepts

resources (Hood, 1991).

of competition and efficiency and making-like

business

of

such

institutions

will

resolved

(Babajani, 2010).

towards

New public management approach is started by

objectives

in

terms

of

operational

budgeting and with resource allocation, whereas,

implementation efforts will continue to produce
and

provide

goods

and

services.

In

this

approach, emphasis on achieving results and

success rate through achieving the goals will be

effective

management

(Yamamoto,

2003). According to these principles they should

perform

their

accountability

duties
than

from

the

determine

viewpoint

of

obligations

as

executives of public sector should have skills as

executive managers in the private sector have
professional skills (Yamamoto, 2003). New public
management does not emphasis on processes
(inputs) but on efficiency (outputs). The reason

measured (Babajani, 2010).

New public management founded based on a
series of principles these, can be expressed as

for this is the difficulty in calculating the efficiency

of public services and controls according to
which public funds are spent. On the other hand,

follows.
The first principle: Emphasis on management
skills for active, objectively and voluntary control

The second principle: Defining standards and

for

determining

measuring
the

accountability for outputs is specified clearly by

targets,

success

performance

of organizations.

criteria

governmental organizations should form more

active control and personal management to move

Principles of New Public Management

setting

These principles stated that managers in

performance

objectives

and

through
indicators

success.
The third principle: Emphasis on use of output
controls, instead of using input controls.
The fourth principle: Moving toward separation
units and decentralization in public sector.

indicators

measurement.

and

criteria

Fourth

for

principle

emphasize on decentralization of governments

and analysis governmental units integrated into
separate

units.

Separation

activities

policy

implementation from policy-making was one of

public sector reforms that is based on the
principle

of

decentralization

management

(Yamamoto,

purpose

implementing

of

new

2003).
such

The

public
main

policy

is

decentralization to create units of management

and delegate authority so that fast and flexible

45
Fatemi and Behmanesh

decisions

can

be

made.

The

new

public

Pollitt (2002) believe one reason for difference

management approach provides competition in

is that different countries have different views in

public sector, this competition can lead to

terms the public sector and attitudes about

savings in use of resources and improvement in

government roles and features. He also says

the quality of public services.

different governments, have not the capacity to

make reform.

New Public Management as a global approach

According to Hood (1991), this approach is the

The criticism on the new public management

result of combining two different ideas. The first

Some criticism on the new public management

idea of conventional economics, which is based

approach is as follows:

on representation theory founded management

and the second idea, oriented management
which is the idea about reforming public sector
and is originated from private sector (Yamamoto,
2003).

Economic foundation: Few researchers believed

that the economy as the foundation of the
economic system has correctness and the validity
for the private sector has, but its application in
the government has not results (Hughes, 1998).

Successive OECD studies show that NPM

approach is globally convergent. Key reforms
include more focus on results and added value
for money, the reform delegate options and

Created field of corruption: New public management

may lead to increased corruption between policy

makers and heads of the bureaucrats who looks
abroad to privatization and outsourcing.

increase flexibility, strengthen accountability and

control, service oriented and customer oriented
and changed relationships with various levels of
government. Kettl (2000) also believed that
moving towards this approach were due to the
number of nations that had reform in a short
period

in

because

its
of

agenda and
the

similar

were

considered

strategies

adopted

(Yamamoto, 2003). Hood (1995) states that

these principles are not accepted equally by all
member

countries

of

the

organization

for

economic cooperation and development. He says

Japan, United States, Germany and Switzerland
compared to countries like England and New
Zealand

are

countries

that

seem

their

governments less focused on accepting these

reforms in the 1980s. (Hood, 1995)

Nature of Different: Schick (1996) says this

approach limits the responsibilities of public
sector

and

collective

will

undermine

interests

(Schick,

values

and

the

1996).

Metcalfe

(1998) believes that public management is not

done only by one organization, but also includes
cooperation

between

organization

and

coordination centers at levels of government or

between commercial institutions, organizations
independent consultancy and other agencies.
Metcalfe (1998) also expressed that an important
feature and highlighted government has diversity
in organizations and agencies; shapes and sizes
are different and has several actions.
Ignoring the values: according to differences
in public and private management, this approach
has been criticized due to elimination of values

46
International Journal of Management, Economics and Social Sciences

such as fairness, equality, honesty and being

communities who form their assumptions that

impartial (Denhardt, 2000). Emphasis on the

accountability is primary in any business. Concept

problem less scrupulous, and recognizes reason

of accountability, something is far beyond the

that created this problem by relying on external

concepts such as word like answer. What is

controls

hidden in this important concept. It is necessary

and

conservative

management

duplication of to the private sector management

to

(Schick, 1996). Although measuring and prevent

public public accountability. General concept

loss of values and moral principles is very

of public accountability is at least about two

difficult,

rigor

different features. The first feature related to

(Yamamoto, 2003). Deleon and Green (2001)

dominate it on all aspects of social life and the

stated that reducing laws and regulations and

second concerns those who have powers from

increased flexibility will lead to administrative

government and are allowed to spend public

corruption. In public sector, external political

funds. Public accountability is defined in the

forces affects internal management systems and

dictionary

as

and

describe and provide logical reasons about the

performance

acts that are done" (Oxford Dictionary,2003). In

measurement and accountability may be having

other words, accountability is a duty which in its

less effective tool for output controls the public

implementation persons, provided satisfactory

sector (Deleon and Green, 2001).

explanations for fulfilling responsibility that has

but

result

can

it

management.

be

measured

affects

the

with

policies

Therefore,

describe

undertaken

Accountability
The concept of accountability and the life history
is at equal footing as political and democratic

the

as

purpose

"The

and

and

person s

provide

concept

obligation

necessary

of

to

reports.

Accountability involved double duty doing, and

the obligation to provide the report.

system has roots in the philosophy of political

Types of accountability

literature. The modern systems based on concept

Traditional

such as accepting the "right to know the facts"

services environment and government activities

and right answer for people (Bakhtaki,2007). In

leads to highlight role of the concept of public

other words, concept of accountability as one of

accountability in financial reporting, accounting

the most original tasks of government and right

systems and other components of internal control

accountability for citizens as one of the most

system of the public sector and government.

original citizenship rights in the public sector.

Public

accountability

is

sign

of

modern

The

characteristics

dimensions

of

structural

accountability

and

can

be

type

of

expressed as follows (Habibi, 2006):

democracies. If power holder s decisions or

The

their policies are not accountable, democracy will

accountability can

remain only on paper. The reason is that public

perspective of legal and management. Legally,

accountability

the person governs, will ask others to try in

is

social

norm,

in

the

traditional

accountability:

This

be investigated from the

47
Fatemi and Behmanesh

accordance with provisions of intellect. from the

political officials often are incapable to define the

perspective

of

way,

overcome

clear, precise objectives and criteria that is

problem, assign responsibilities and

creates a

essential for accountability, and third, the type of

hierarchical

managerial

structure

of

accountability.

This

organizational structure often does not allow

structure was proposed by Max Weber.

managers

The new accountability: In new pattern of relations

accountability.

between citizens and administrative system rather

accountability can be used such as financial,

than that is established by the politicians is

operational, political, and social accountability

directly

(Babajani, 2008).

connected.

This

model

has

two

to

approach
Other

politicians

aspects

of

for
public

fundamental faults, have likelihood of the humans

Financial accountability: In this level, managers of

error and vulnerable to corruption.

organizations are liable to use public financial

Beyond

the

paradigm

While

resources clearly. According to framework of laws

passing through traditional management pattern,

and regulations and are accountable about their

a kind of new attitude or new paradigm of public

decisions.

management

of

Operational accountability: This accountability is

government. This new model tries to assign more

carried out to achieve operational objectives

tasks to the private sector. In new public

which are the pre-defined, in terms of efficiency

management

and effectiveness and use of financial resources

occurred

pattern

accountability:

for

management

called

beyond

the

paradigm, managers have an entrepreneurial role

in order to achieve the goals.

and show attitude to people that they believe in

Political accountability: The accountability against

authority of customer. Also, In this pattern

entity that has political background.

privatization, deregulation, minimum government

Social Accountability: It is commitment, while

intervention,

delegating powers to a formal relationship which

reduced

maximum

size

of

role

of

government

is

market

and

considered.

should be transparent.

Government would act as status navigator and

Management accountability: This accountability

supervisor

can

therefore

accountability

in

there

front

of

will

be

direct

customers

and

government is also accountable. In attitudes

be

made

against

senior

manager

(Rashidpur, 2005).

beyond this paradigm (the new public service),

Public accountability
management

government has to act as servant and empower

In new public management approach two types

citizens by creating shared values among them

of

(Habibi, 2006).

accountability to politicians and accountability to

accountability

and

may

the

be

new

public

considered;

modern

customers. In this approach, there has been a

democracies, there are three major problems.

shift of accountability from political circles to

First, relationship between political authority and

management and from inputs and processes to

accountability entities is often poor. Second,

outcomes and results. In approach mentioned

In

relation

to

accountability

in

48
International Journal of Management, Economics and Social Sciences

efficiency and performance is the main focus of

management approach the main focus is on

accountability.

getting

guaranteed
judgment

However,

for

social

and

to

efficiency
and

is

political

perform

not

results

and

achieving

the

goals.

correct

Therefore, this approach focus on performance

management

and operational accountability of governments

accountability may also lead to reduced political

and against the people (Babajani, 2010).

accountability (Christensen, 2002).

CONCLUSION

Traditional bureaucratic model with emphasis

on

limited

freedom,

the

implication

of

accountability results in respecting the rules has

been

successful

model

in

management.

Proponents of the New Public Management

believe that increase in customer options will lead
to freedom of managers and empowerment of
political control. Today, managers in public
sector around the world are looking to greater
freedom requir more attention to increase the
accountability. So,

system with freedom

of

managers without increasing the accountability

can

be

developed

by

reducing

powers

of

politicians. The traditional model of management

of public sector increase the freedom and
authorities of managers which expand the scope

In financial accountability, the government

and owners of right units convince that the
budget has to comply with laws and regulations;
resources according to legal permission may be
and

used

in

order

to achieve

the

objectives and implementation of programs and

approved activities considering legal restrictions
and prevailing annual budget. In the area of
operational

responsibility

government

and

units

of
should

accountability,
base

approaches

dominant

management,

uses

in

public

series

of

sector

strategies.

Improving the performance of public sector

institutions increased the competence of these
institutions.

In

this

approach,

management

methods private sector, including components

such as privatization, reduced government size,
outsourcing and customer focus is used and with
the

flexibility

structure

and

and

softened

evaluation

in

management

and

performance

measurement. Efficiency and effectiveness can

consider

in

the

approach

is

also

public

sector.

considered

Mentioned

in

terms

of

accountability, so that in this approach, two types

accountability has been raised, accountability to

of their accountability (Christensen, 2002).

earned

The new public management as one of the

their

performance on operational aspects such as

efficiency and effectiveness while using financial
resources (Babajani, 2008). In the new public

politicians and accountability to customers (the

people). In this approach criticism also discussed
relation to accountability that can speak criticism
on more accountability than the performance
without regard to political accountability because
looking to management accountability may occur
reduce sense of political accountability. Thus,
under this approach, performance the public
accountability of governments towards citizens of
the

management

subsequently

may

accountability

of

aspects
be
political

are
occur
and

done,

but

undermine
despite

the

importance the effectiveness and efficiency that

49
Fatemi and Behmanesh

provides

the

possibility

of

performance

operational accountability, are not considered

Schick, A. (1996). The Spirit of reform: Managing the New

Zealand state sector in a time of change. The State
services Commission and the Treasury, 25-26.

financial aspects of accountability.

Yamamoto, H. (2003). New Public Management-Japans

Practice. Institute for International policy Studies,1-10.

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