Details

Technical Note

The Economic Foundations of New Public Management Paradigm

Saad Azmat

INDUSTRY :

AREA : Managerial Economics

ORGANIZATION : Pakistan

LENGTH : 11

LUMS No : 11-124-2013-2

PUBLICATION YEAR : 2013

KEYWORDS:

Economic Foundations,New Public Management Paradigm,Neo-Classical Economics,History of Economic Thought,Privatisation,Decentralisation,Competition

DESCRIPTION:

The word New has been a misnomer in economics where modified versions of older ideas are referred to as New. The Neo-Classical Economics, New Keynesian Economics, New Institutional Economics and others seem to be only partially revised versions of older doctrines. In a world where extremes have a tendency to fail, averages have become a norm. Many of these economic doctrines seem nothing more than the weighted averages of the alternatives they once rebuked. This note examines the economic foundation of New Public Management to see if there is anything New about it or like many of its counterparts, it is imbued in an older doctrine. This note first analyses the history of economic thought to infer the relationship between the older truths of economics and the beginning of New Public Management. It starts with examining Adam Smith¿s idea of the invisible hand followed by its leftist critique. The Classical response is then analysed along with the leftist rebuttal. The economic challenge of the great depression era is discussed followed by the emergence of Keynesian economics. The increasing economic role of the government and the emergence of the old public management paradigm is sought in Keynesian thought. The neo-classical critique of Keynesian economics is then captured laying the foundation for New Public Management. The note finally suggests that the New Public Management emphasis on privatisation, decentralisation, competition and outcome orientation has its roots in Neo-classical economics. 

LEARNING OBJECTIVES:

N/A

SUBJECTS COVERED:

Management, Economics