Chapter 10: New Public Management Reform In New Zealand: The Collective Strategy Phase

In a perceptive series of analyses Hood (1991, 1995) identifies the main characteristics of “New Public Management.” Dominant features are, firstly, the lessening or removal of differences between the public and private sectors and, secondly, a shift in emphasis from process accountability to accountability in terms of results. Accounting has been a key element in the introduction of the new emphasis and new conception of accountability “since it reflected high trust in the market and private business methods... and low trust in public servants and professionals... whose activities therefore need to be more closely costed and evaluated by accounting techniques” (Hood, 1995, pp. 4-5). Supporting the removal of public/private sector distinctions and the imposition of explicit standards and rules are a number of specific practices:

1. greater disaggregation of public sector organizations into separate “product” centres;

2. a shift towards competition between the separate units offering the services;

3. the use of management practices (e.g., accrual accounting, organizational design, career structure and remuneration practices) broadly drawn from the private sector;

4. an emphasis on efficiency and cost reduction;

5. the rise of a new managerial elite;

6. more explicit and measurable standards of performance; and

7. attempts to control public sector organizational units through preset output measures.