In the early 1980s, neoliberal ideas found a powerful institutional expression in a new model of public administration known as New Public Management (NPM). Emerging first in Anglo-American contexts and rapidly diffusing across the globe, NPM operationalized neoliberal modes of governance within the everyday practices of state bureaucracies. Its central ambition was to remake the public sector in the image of the private market by importing managerial techniques, entrepreneurial values, and competitive logics into government institutions.
At the heart of New Public Management lies a fundamental redefinition of the relationship between the state and its citizens. Rather than conceiving citizens as members of a political community entitled to public goods, NPM recasts them as “customers” or “clients” whose needs are to be met through efficient service delivery. Public servants, in turn, are encouraged to abandon traditional bureaucratic norms of neutrality, rule-following, and public duty, and instead cultivate an “entrepreneurial spirit” characterized by innovation, flexibility, and performance orientation.
The rationale behind this transformation is explicitly neoliberal. If private firms must innovate, cut costs, and maximize productivity to survive in competitive markets, advocates of NPM ask why government agencies should be exempt from similar pressures. According to this logic, inefficiency, waste, and unresponsiveness in the public sector are best addressed not through democratic deliberation or expanded public oversight, but through market discipline, managerial reform, and performance measurement.
A prominent illustration of NPM in practice can be found in the United States during the 1990s. Under the leadership of Vice-President Al Gore, the Clinton administration launched the National Performance Review, a comprehensive effort to restructure federal agencies according to New Public Management principles. The stated objective was to reduce “government waste” while increasing administrative efficiency, effectiveness, and accountability. In practice, this involved downsizing bureaucracies, outsourcing public services, introducing performance benchmarks, and subjecting government workers to quantitative evaluation systems modeled on corporate management.
Proponents of New Public Management articulated its vision through a set of guiding objectives that collectively redefined the purpose and operation of government. These objectives reveal the depth of neoliberal influence on public administration.
First, catalytic government emphasizes “steering rather than rowing,” suggesting that governments should set strategic directions while leaving implementation to private actors or quasi-market mechanisms. Second, community-owned government prioritizes empowerment over direct service provision, encouraging individuals and communities to take responsibility for outcomes previously managed by the state. Third, competitive government seeks to inject competition into service delivery by allowing public agencies, private firms, and nonprofit organizations to compete for contracts.
Fourth, mission-driven government aims to replace rigid rule-based administration with flexible organizational missions, thereby reducing procedural constraints. Fifth, results-oriented government shifts attention from inputs—such as budgets and staffing levels—to measurable outcomes and performance indicators. Sixth, customer-driven government places citizen satisfaction at the center of public service, treating governance as a transactional relationship rather than a civic one.
The remaining objectives deepen this market-oriented transformation. Enterprising government promotes revenue generation over public spending, encouraging agencies to behave like profit-seeking enterprises. Anticipatory government emphasizes prevention and risk management, often through predictive models and cost-saving strategies. Decentralized government seeks to flatten hierarchies in favor of teamwork and local decision-making, while market-oriented government explicitly endorses the use of market mechanisms to drive change and allocate resources.
Taken together, these objectives illustrate how New Public Management represents more than a set of administrative reforms. It constitutes a profound reimagining of the state itself. Under NPM, government is no longer primarily a guardian of the public good or an instrument of democratic will, but a service provider operating under market-like constraints. Public value is increasingly measured in terms of efficiency, cost-effectiveness, and customer satisfaction rather than equity, justice, or collective responsibility.
While supporters credit New Public Management with reducing inefficiencies and modernizing public administration, critics argue that it erodes democratic accountability, weakens public institutions, and commodifies citizenship. From a political science perspective, NPM stands as one of the clearest examples of how neoliberalism reshapes governance not only through policy, but through the everyday practices, identities, and rationalities of the modern state.
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