New Public Management reforms in Europe and their effects: findings from a 20-country top executive survey
| Author | Ahmed Mohammed Sayed Mostafa,Rhys Andrews,Gerhard Hammerschmid,Steven Van de Walle |
| Published date | 01 September 2019 |
| Date | 01 September 2019 |
| DOI | http://doi.org/10.1177/0020852317751632 |
| Subject Matter | Articles |
Review of
Administrative
Article
Sciences
International Review of
Administrative Sciences
New Public Management reforms
2019, Vol. 85(3) 399–418
! The Author(s) 2018
in Europe and their effects:
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findings from a 20-country top
DOI: 10.1177/0020852317751632
journals.sagepub.com/home/ras
executive survey
Gerhard Hammerschmid
Hertie School of Governance, Germany
Steven Van de Walle
KU Leuven, Belgium
Rhys Andrews
Cardiff University, UK
Ahmed Mohammed Sayed Mostafa
Warwick Business School, UK
Abstract
This article assesses the impact of New Public Management (NPM)-style reforms in
European countries as perceived by top public sector officials. Using data from an
executive survey conducted in 20 European countries, we look at the relationship
between five key NPM reforms (downsizing, agencification, contracting out, customer
orientation and flexible employment practices) and four dimensions of public sector
performance: cost efficiency, service quality, policy coherence and coordination, and
equal access to services. Structural equation modelling reveals that treating service
users as customers and flexible employment are positively related to improvements
on all four dimensions of performance. Contracting out and downsizing are both pos-
itively related to improved efficiency, but downsizing is also associated with worse
service quality. The creation of autonomous agencies is unrelated to performance.
This suggests that policy-makers seeking to modernize the public sector should prior-
itize managerial reforms within public organizations over structural transformations.
Corresponding author:
Gerhard Hammerschmid, Hertie School of Governance, Friedrichstrasse 180, 10117 Berlin, Germany.
Email: hammerschmid@hertie-school.org
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International Review of Administrative Sciences 85(3)
Points for practitioners
For practitioners, this article provides an in-depth perspective on how top public sector
executives perceive the impact of NPM-style public sector reforms on a number of
performance dimensions. It allows them to better understand the relationship between
reform strategies and outcomes in European administration, and allows them to com-
pare their own experiences with those of top executives in other countries.
Keywords
agencification, contracting out, downsizing, New Public Management, performance,
public sector reform, top officials
Introduction
New Public Management (NPM)-inspired reforms have dominated public sector
agendas in Europe for most of the 1990s and 2000s, and still do in many countries
even though new reform paradigms have emerged (Pollitt and Bouckaert, 2011).
Despite the enormous impact of NPM on governments in Europe, there is still
comparatively little systematic research evidence of the effects of NPM reforms on
the performance of the public sector across European countries. Most evaluations
of NPM reforms tend to be impressionistic, or focused on limited aspects of these
reforms and their outcomes (Pollitt and Dan, 2011). Moreover, scant research has
drawn on large-scale data analysis to draw lessons about the effects of NPM across
multiple countries.
This article adds valuable new data to debates about the impact of NPM by
analysing top public sector officials’ perceptions of changes in public service
performance in 20 European countries1 on four dimensions: cost and efficiency,
service quality, policy coherence and coordination, and equal access to services.
These perceptions are related to five key NPM reforms: downsizing, agencification,
contracting out, customer orientation and flexible employment practices. In this
way, the article seeks to sketch out a more comprehensive picture of the (perceived)
successes and failures of NPM reforms than has previously been attempted. In
addition, the connection between the different ‘intermediate’ dimensions of public
service performance and the overall achievements of national administrations is
examined to provide further insights on what the administrative elite in Europe
regards as the main drivers of high-performing public administration.
The article first outlines current progress on evaluating public sector reform. We
then address critical issues in evaluating NPM reforms, before going on to explore
the potentially positive and negative effects of NPM reforms on the performance
of public services. Subsequently, our unique dataset study of over 7000 top public
officials in 20 European countries is introduced and the analytical model is pre-
sented. Descriptive country-level findings are presented and the results from a
Hammerschmid et al.
401
structural equation model linking perceptions of NPM reforms with perceived
performance improvements are discussed. The article concludes by considering
the implications for the theory and practice of public sector reform.
Effects of public sector reform – an underdeveloped field of
research
Research on NPM has tended to look at changes in structures and processes, and
most statements about outcomes have been generalizations about broad trends
rather than empirically informed observations. This is perhaps inevitable, given
the relatively far-reaching yet sometimes ambiguous nature of NPM reforms
(Van de Walle and Hammerschmid, 2011). Theoretically, NPM can be described
quite elegantly using principal–agent and public choice frameworks (Gru¨ning,
2001). In practice; however, administrative reforms are invariably multifaceted,
combine rhetoric and practice, suffer from incomplete specification, and experience
shifts in purpose during the implementation process. In addition, reliable pre- and
post-reform data are typically difficult to obtain, especially for far-reaching reform
programmes. This makes evaluation extremely challenging.
In a recent meta-study of evaluations of NPM-style reforms in Europe, Pollitt
and Dan (2011) found that ‘there is an ocean of studies of the application of NPM
ideas within Europe, but only a modest sea of works that offer direct empirical
analysis of outputs, and no more than a small pond that convincingly connect
specific reforms to particular outcomes’ (Pollitt and Dan, 2011: 52). The evaluation
of specific European NPM reforms is perhaps more straightforward because the
characteristics of discrete reforms are more readily identified and disaggregated
from wider programmes and trends (Andrews and Van de Walle, 2013: 767).
Indeed, drawing on OECD data, researchers have now begun to identify important
cross-country variations in the extent and impact of key NPM reforms (e.g. Alonso
et al.’s (2015) work on the effects of outsourcing on public sector size and employ-
ment). Nevertheless, important challenges remain in attempting to assemble data-
sets to carry out comparative evaluations of NPM.
In Europe, where governments have implemented an array of different initia-
tives, reforms are often irreversible and as time passes it becomes increasingly
difficult to design studies that can precisely establish their effects (Hansen et al.,
2017). Moreover, only a limited set of indicators may be available for analysing the
outcomes of NPM reforms. For example, several studies of agencification have
identified the impact of this reform on internal processes and procedures, but much
less attention has been paid to its relationship with public service quality or equity
(Dan, 2013).
Research has often focused on a restricted range of outcomes. Cutting costs and
improving efficiency has been the most important goal of NPM reforms in Europe
(Hood, 2011), and many assessments of NPM have looked only at cost-
effectiveness (see Andrews, 2010). There are fewer studies that simultaneously
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International Review of Administrative Sciences 85(3)
examine a range of outcomes. Boyne et al.’s (2003) evaluation of the relationship
between reforms and public service responsiveness, equity and efficiency, and
Andrews and Van de Walle’s (2013) study of NPM’s effects on efficiency, respon-
siveness, equity and effectiveness in local government, are rare examples of schol-
arship dealing with multiple reforms and outcomes.
Public management reforms inevitably encompass many paradoxes, trade-offs
and dilemmas (Wollmann, 2003). It may be comparatively straightforward to draw
on existing data sources to identify the impact of specific reforms within specific
sectors (e.g. the privatization and liberalization of utilities; Clifton and Dı´az-
Fuentes, 2010). However, assessments of administrative change across the entire
government apparatus require the mobilization of an array of information on
reforms and outcomes from different policy areas. One way in which such assess-
ments can be undertaken is through the use of large-scale expert surveys. In this
study, we draw upon survey data gathered from top public officials in 20 European
countries who can give an expert opinion on the relative importance of different
reforms within their policy area, and the performance of public services within
their country.
NPM reforms and public sector performance
NPM-style reforms were originally intended to make the public sector work better
and cost less (Hood, 2011). With the emphasis on cost-cutting and efficiency came
a greater focus on service users as customers, and attempts to loosen up restrictive
employment practices. All of this was to be achieved through reforms intended to
make the public sector more ‘business-like’ and give managers more ‘freedom to
manage’ (Osborne and Gaebler, 1993). However, critics have focused on the poten-
tial for NPM to cause...
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