New Managerialism, New Welfare, eds. John Clarke et al, Open

University/Sage, 2000

Chapter 2 

Managerialism and Public Services: Some International Trends

by Norman Flynn


1          Managerial changes and their causes                                                                     6

1.1       Costs                                                                                                                          6

1.2       Legitimacy                                                                                                                 11

1.3       Power struggles                                                                                                         15

2          Local conditions and institutional constraints on changes                                    16

2.1       Existing alliances                                                                                                        18

2.2       Culture and beliefs                                                                                                     20

2.3       Technical                                                                                                                   20

3          A variety of experience                                                                                          21

References                                                                                                                          27

This chapter asks the question: is there a world-wide tendency towards a unified way of managing public services? The stark answer is that if there is such a tendency it still has a long way to go before there is uniformity. The difference in experience between trying to register a birth in Jamaica and getting permission to invest in Singapore could not be greater and illustrates the importance of power, culture and the nature of the task in determining how public services work. But, while there are obviously differences among professional cultures and national or regional ways of managing, perhaps there are some pressures on governments that transcend these differences and may lead to similar solutions to the problem of managing state activities.

At an ideological level, it may be important that the collapse of Communism in eastern Europe and the search for market solutions in China leaves residual command economies only in places such as Burma, North Korea and Cuba. Along with the victory of the market solution, maybe comes the death of the hierarchical bureaucracy, sheltered from competitive pressures and hidden from public view. The choice between market and hierarchy is a convenient simplification of the many choices of modes of governance available.

Within the market, some general tendencies may also have relevance. Bureaucracy was not confined to state activities but was the mode of management and control in the big corporations in Europe and the US. Increasing global competition is supposed to have exposed the rigidity of this way of managing: product and investment cycle times have got shorter, competitors can finance unexpected entry into markets and companies have to make decisions faster and better than ever. This new environment requires new ways of working and new sorts of organization. If companies transform themselves, can public bureaucracies stay unchanged?

These abstract notions have practical ways of transforming themselves into reasons for governments to change the way that public organizations are run. Two sets of people have an interest in the changes: the electorate in their various groupings and alliances, and business. What we have seen in the past two decades or so is a variety of reasons for which governments have turned their attention both to the question of what governments should do (and what should be done by the private sector, by individuals or by civil society) and how what governments should do should be managed (through new ways of organizing existing institutions, abolishing them or creating new forms).

Governments in many parts of the world have seen the efficiency of government organizations as an important element in creating national competitiveness in an increasingly competitive world. Red tape and over-regulation and a civil service that is unfriendly to business are seen as disincentives for inward investment and a competitive disadvantage for home-based businesses. Reform of public organizations is often seen as a part of a national effort to improve efficiency and competitiveness in places as diverse as France, Malaysia, New Zealand and Britain. Palan and Abbott (1996) have described this process as the ‘competition state’. They argue that while competition creates an anxiety among governments it does not necessarily produce the same solutions in every case. Others, such as the OECD Public Management Group, have argued that there is a single best way of running state functions, including various lists of features that emulate the operation of companies in a competitive market. These include the use of competition as a way of reducing costs, a more flexible workforce, more charging for services at the point of delivery, performance-related pay, short-term contracts and so on. Where feasible, this sort of approach is made into a condition of getting financial help from international institutions, such as the Inter-American Development Bank, International Monetary Fund, Asian Development Bank. Even where financial help is not being sought, there are institutions such as the OECD and the management consultants that encourage such management methods and assume that there is a single set of problems looking for a unique set of solutions. Cynics would say the consultants have a set of solutions looking for problems. The reason that this debate about whether there is a single way forward is important is that if it is correct, the bargaining position of those who have different ideas is weakened. If those advocating changes are able to demonstrate that everybody else is doing this, and it works, then counter proposals are less likely to get a hearing.

There is also a strong argument that pressures have produced different results in different countries. By 1995, Hood, credited with coining the expression ‘New Public Management’, expressed doubts about whether there was indeed a new paradigm, and noticed the national and regional differences. Similarly, Pollitt (1995) noticed that while many countries had developed new approaches whose characteristics he listed, the lists were not identical and indeed overlapped only in part. By 1996, Lawrence Lynn (paper published 1997) expressed skepticism about the whole project, arguing that even one of the central tenets of reducing direct state involvement and ‘steering not rowing’ had not been vigorously pursued even in the US where the approach had been most forcefully propagated. Rather than a new paradigm, Lynn argued that there might only be a new ‘meta-language’ used by management consultants and national and supra-national agencies. As a UN report put it in 1998, there has been ‘… a remarkable commonality of nomenclatures and formal organizations among countries, even though the underlying national realities remain extremely divergent’ (p.17). Guy Peters (1996) identified four strands of reform efforts: market mechanisms, deregulation, participation and flexibility, operating with different emphases in different countries. Indeed, Peters argues that there are four ‘models’, each based on one of these four features. While useful heuristically, each element in this classification may be apparent in a single country, although with different emphases. The changes could be classified as being concerned with three issues: a concern to reduce spending because of fiscal problems; a concern by governments or political parties to create or sustain support because of some threat to their legitimacy; the struggle for power in governments in which reform efforts may be used as a way of gaining or retaining power.

1       Managerial changes and their causes

1.1      Costs

At different times in the 1980s, many countries had fiscal crises. In some cases they were caused by economic downturn, as government revenues failed to keep pace with government spending. In other cases spending grew in response to various demands but it was politically difficult to increase taxation to match the rise in spending. If permanent deficits are not to be tolerated there is an obvious and small set of solutions that can be used in varying combinations: increase taxes, cut services, increase efficiency. If the first two of these solutions are chosen, the third becomes essential: while it raises taxes or cuts services any government must try or be seen to try to increase efficiency. Similarly, to cut services is difficult electorally and may require public persuasion.

Table 1            General Government Total Outlays

As a percentage of nominal GDP.


















































Czech Republic





























































































































New Zealand
































































United Kingdom










United States










(*) Estimates and projections. Source: Economic Outlook no.64, December 1998, OECD.

(Source: Analytical Databank, OECD)

Table 1 shows government spending as a percentage of GDP was rising in most OECD countries during the 1970s and 1980s. It also shows that the pressure was lifted in most places by 1995 as the public spending figures peaked (the exceptions are Japan, Korea and Switzerland). While the spending was rising, especially where spending was over 50 per cent, you might expect governments to try to take measures to improve efficiency. What is most interesting is that there were less vocal and visible attempts at big changes in Denmark, where spending peaked at nearly 60 per cent and Germany where it peaked at around 50 per cent than in the US where spending never rose to 33 per cent of GDP.

Improving efficiency or changing the way in which services are managed were never likely to solve fiscal crises. Claims were made during the 1980s in countries such as the US, UK, and New Zealand that contracting out services produced a step reduction in costs of up to 20 per cent of previous costs (Walsh, 1991; Domberger et al., 1986) but such savings were never spread over a very wide range of services nor were they big enough to be reflected in overall spending figures. The search for efficiency savings applied only to the running costs of services, rather than, for example, the level of subsidies for farmers or welfare benefits.

The efficiency effects of new ways of managing were exaggerated, naturally. For the UK, (Flynn, 1997, p.207) shows that all reductions in running costs in the UK 1991–1996 can be attributed to the transfer of functions or to reduced services, especially defence. In any case, the fiscal crises were less attributable to inefficiency than to an accretion of functions and spending programmes. However, there can be no doubt that fiscal problems made politicians look for savings, not least for symbolic purposes. These are two-fold: electors and taxpayers need to be assured that their money is being used efficiently, and employers and workers in industries facing competitive pressure need assurance that their anxiety is shared by the government and public sector workers.

One of the main concerns of governments entering reform programmes has been to reduce costs without cutting the volume of services. Barzelay (1992) has pointed out that this was probably the main error of public services trying to imitate management in the manufacturing sector: if there was no measure of outputs, independent of cost, the search for improved efficiency was chimerical. So the search for efficiency improvements produced a need for a definition of outputs that could be compared with costs. Such definitions and measures are a necessary condition for evaluating management changes: without a measure of the cost of a unit of output, assessing the success of any management change is a matter of guesswork.

This is true whatever the nature of the structural and other changes being made. A system in which there are contracts between government and either internal or external service producers (as has been established in Sweden, New Zealand and the UK) requires some units of output to be specified in the contract. The alternative is to contract for results, an approach adopted in the US for contracts for drug rehabilitation work and training for re-employment schemes, for example. Where it is not possible to specify results or outcomes clearly enough to make a contract work, governments are forced to measure units of work or output. Unfortunately such efforts have not been successful enough to cure the error that Barzelay spotted. Even in Sweden, which has had a budget system based on outputs and contracts for a decade, there are still technical difficulties in measurement (Blondal, 1998). Since 1998 the British government has further turned its attention to outcome targets, especially in the proposals contained in the White Paper ‘Modernising Government’ (Flynn 1999a).

Despite the problems of definition and measurement, many efforts have been made to improve efficiency. In some countries, governments have introduced competition through which public sector organizations are made to compete with alternative providers in an attempt to reduce the cost of service provision. This has involved two main processes: the definition of services and costs so that a competitive bidding process can be introduced; and efforts to reduce costs to make prices competitive. Other efforts involved simply cutting budgets and/or staffing levels while attempting to maintain service levels.

Still others were concerned with changing the way in which work is done and supervised. Changes in work processes have been of two contradictory types: one set of changes involves mechanizing and making routine activities that were previously under the workers’ control, such as nursing and teaching; the other changes involve taking activities that were previously routine and mechanized and applying techniques of quality improvement and self-management so that workers have to make a bigger contribution to the design of work processes.

In addition to increasing efficiency, governments have made efforts to reduce public expenditure. Some of these involve reducing the public services provided in one of three ways: simply cutting budgets; transferring responsibility to individuals, to the ‘third sector’ or to the market; and transferring responsibility to local governments.

Some governments have changed accounting practices to make public accounts balance. One device has been to change the way in which capital expenditure is counted. A move from counting spending when it is made to counting it as the assets are used up can reduce any single year’s spending. This was the main reason for the New Zealand accounting changes to ‘accruals’ accounting and such a device has also been used in, for example, the UK and Norway. Incidentally this is a major part of the explanation for New Zealand’s dramatic fall in spending as a percentage of GDP from 1990 to 1995 in Table 1.

A pre-requisite of the search for efficiency improvements is an accounting system that exposes costs. Even if simple budget cuts are to be made, politicians like to know the likely impact of the reductions. Traditionally, government accounts were concerned with the allocation of expenditures to functions or departments. A concern with efficiency requires a measurement of cost. In turn this requires that workers and managers count their activities and allocate their costs to activities. In many sectors this requires a change in attitude by which professionals think about the cost of what they do, as well as the professional standards by which they do it. The movement from expenditure to cost accounting has been very widespread, occurring for example in the US, northern Europe, Singapore, Hong Kong, New Zealand and Australia.

1.2      Legitimacy

The second set of problems that governments tried to solve in part by management changes was concerned with legitimacy. This occurred in different ways in different countries. In Japan in the early 1990s the legitimacy of the civil service was challenged as the recession lengthened and civil servants could no longer claim credit for economic growth. In northern Europe there was some political dissatisfaction with the standards of services provided by social democratic regimes from the mid 1980s and parties tried to regain credibility by engaging in various consultation and service redesign measures. In the US, pressure came less from voters than from business, blaming ‘red tape’ for inefficiency and frustration. The challenges were both to the ruling parties and to the institutions of the state, including the bureaucracies. Politicians could distance themselves from blame by diagnosing failure of the bureaucracy rather than the party. This was much more common in the US and the UK, where governing parties presented themselves as the champions of the people against the bureaucracy. In such circumstances, radical action was necessary: champions cannot gain support through minor measures. The ‘reinventing laboratories’ in the US and the very public campaigns about standards of service through the charters in the UK were part of this crusade. Service standards were defined in other countries, such as through charters in France, but with much less publicity.

There were other pressures on governments from business. As international competition increased in the 1980s, especially with new, smart and efficient entrants into the US markets from Japan and then other Asian countries, governments were increasingly held responsible by business for ‘national competitiveness’. If the Japanese government could act in the interest of ‘Japan Inc.’, why, then, could not the US government do the same for US Inc., or the British, or much later the German and Malaysian governments? This pressure did not imply that the governments should all behave in the same way, rather that they should accept some responsibility for their nation’s competitiveness. This came to have serious implications for both policy and for management, as a new form of corporatism brought together government and business, but less frequently labour, to deal with issues of national competitiveness. What this form of corporatism implies is that the government does not act as arbitrator between employers and employees but rather represents the interest of business as being the same as the national interest.

To generate support from business, governments have several options. The most immediate is to create opportunities for business, or sections of business, to make money. Privatization is the main way this can be done: the buyers of privatized industries and the banks and advisers involved in the process are the main beneficiaries of the privatization process. Similarly, contracting services out offers a chance to make money. While the producers of military hardware are the most obvious beneficiaries of government contracts, there are many others, traditionally in civil engineering but now increasingly in the computer hardware and software industries. Examples include the US insurance industry’s influence on the Clinton government’s attempts to design a universal healthcare system or the aerospace industry’s profits from military supply. Almost everywhere state monopolies on telecommunications have given way to profitable market opportunities. Less obvious, perhaps, is the way in which water supply and management contracts are devised to enable the large French water companies to manage water supply in various parts of the world. Private provision or publicly funded but privately delivered services are not put in place just because of the potential efficiency gains but also because they provide an opportunity for profit.

In some cases, the response to business is to deregulate or reduce the amount of control the governments have over businesses. A main thrust of reforms in the US has been the effort to reduce ‘red tape’ or ‘bureaucracy’. Similarly, the Malaysian government has been presenting itself as more friendly to business (Sarji, 1996). A further connection between governments and business is the demonstration effect of changes in the ways in which businesses are managed. There is a view that the hierarchical bureaucracies were a product of a period of economic and political development during which mechanized mass production made large bureaucracies, repetitive tasks, standardized products and strict rules of behaviour the norm in business as well as in government. Such an approach is sometimes referred to as Fordism, after the social and technical characteristics of Ford car plants. Relaxation of those conditions, both social and technical, has been referred to as ‘post-Fordist’ (see Burrows and Loader, 1994, for this analysis in relation to the welfare state). This argument applies to the nature of the products or services, which can be customized in some way to meet individual requirements and the nature of the production process, in which the division of labour is relaxed and jobs become more flexible. The implication of this development for management is that new forms of control are required: direct supervision of people carrying out routine tasks is replaced by methods that develop self-management. The argument can be exaggerated: in practice the large public sector employers, dealing with tax collection, benefits and pensions payments still have standardized products and management processes that are designed to make sure that the calculations are done correctly. In other areas, it could be argued that recent tendencies to define and measure services as part of the process of management or contracting make services more standardized rather than less, and require a management style concerned with direct supervision. Nevertheless, there is no doubt that politicians and managers learn from the trends occurring in the private sector, whether in the use of technology or methods of managing people. Legitimacy may also be enhanced by implementing current ideas about management, or at least by using current managerial language.

When governments are faced with opposition or doubts from citizens or business they have taken various steps to justify their actions or generate or create support. One strand is the improvement of accountability through which governments try to demonstrate how well they are doing. While progress has been slow at a high level, accounting for the effectiveness of government policies and programmes; at a lower level, accountability for the efficient use of funds has made a lot of progress.

A second strand is to generate support from the electorate through processes of consultation and participation. A main thrust of management reform in northern Europe has been about generating support through involvement. The main theme of the ‘new steering model’ that has been adopted in many municipalities in Germany and the Netherlands has been involvement of the public in planning and designing public services. While these efforts have also involved decentralized budgets and the definition and costing of services, the main purpose has not been cutting costs. In recent years these approaches have spread to the Canton level in Switzerland.

Improvement of customer service and service quality is another way that governments try to make public services more popular. Access to services through single access points (called the ‘one stop shop’ in the UK) has been tried in many European countries, including Italy. In other places there have been campaigns, such as the Japanese ‘Polite and Considerate Public Service Campaign’ or the PS21 (Public Services for the 21st Century) campaign in Singapore.

These processes are quite separate from those that help businesses become more competitive. They are concerned with maintaining support for the institutions of the state and the level of taxation being levied. The form that they take depends on the local circumstances. Public involvement in choosing what services to provide and how is very different from a managerial approach to service design and customer-orientation. One view is that the two approaches represent different political cultures. Kickert (1995) argues that the customer-service approach to managerialism is essentially Anglo-American, while the approach in the Netherlands and elsewhere in Europe is more concerned with democracy.

1.3      Power struggles

Managerial reforms have been used as a way of contesting for power within government. The most obvious example of this is the radical New Zealand reforms that tried to take power away from the professionals, especially in health and education sectors, and put the politicians in control (Boston et al., 1996). While expenditure cuts may have been the underlying motive, the form that the reforms took, establishing a way of choosing the required outputs from public institutions, was designed to make decisions very explicit and to allow the politicians to make them.

One of the motivations for the UK reforms under the Thatcher and Major governments was to enable central government to gain control over institutions inimical to their political purposes, such as local authorities, health authorities and parts of the central government apparatus (Jenkins, 1995). In Japan, factions of the ruling Liberal Democratic Party gained control of parts of the apparatus of government and used them to promote their own interests. Reforms that downgrade or promote particular departments or commissions are part of the factional power struggles. Particular departments, such as ministries of finance or ministries of personnel, promote reforms in their own interests in many countries. What this suggests is that the form of management changes and restructuring are likely to be influenced by the existing power relationships and the resources available to change them.

2       Local conditions and institutional constraints on changes

The balance among these influences on governments varies across the world. First, fiscal conditions differ. Switzerland and Hong Kong are two examples of countries that have tried quite radical reforms in the way in which services are managed, during periods of healthy finances. There is also, in Japan, an example of very little real change in management style in the civil service despite the world’s biggest fiscal deficit. Nor does fiscal crisis automatically generate the same solution everywhere. One solution for national governments’ fiscal problems is to transfer responsibility for services from central to sub-national governments, together with the fiscal responsibility, as was done in the Netherlands and Japan in the mid 1980s. However, this was by no means a universal solution.

Similarly, problems of legitimacy vary. The concerns of US business with ‘big government’ and obstructive public officials are not necessarily shared in Europe where, in general, reform efforts are designed to improve services for the public rather than streamlining procedures for businesses. These changes do not necessarily imply that there was a legitimacy problem but if there was, it was not the same as that of the US Federal government.

Pressures from ‘globalization’ or national competitiveness have also produced different responses from governments. Perhaps Singapore has the most investment-friendly government procedures, whereby officials steer investors individually through any legal and fiscal processes. Other governments have made attempts to reduce ‘red tape’ for investors but the principle influence of the ‘globalization’ idea is at the level of rhetoric with much talk of modernization and national competitiveness, and in the sphere of social policy and what is sometimes called the ‘social wage’. Competitiveness is used as a reason for cutting or not increasing the ‘burden on business’ of taxes or social contributions.

When we look at the impact of the desire of businesses to make money from tax-funded services we also see a variety of patterns. It is perhaps ironic that the term ‘steering not rowing’ (Osborne and Gaebler, 1992) was one of the slogans associated with public sector reforms in the US and yet there has been virtually no transfer of functions from directly employed state workers to contractors: the pattern of employment and contracting has not changed in the way in which it did in the UK, for example (Lynn, 1997). Patterns of opportunity for contracting vary somewhat country by country. Until the privatization of water supply in the UK only France had major water contracts, dating from the nineteenth century. The US has the only major private prisons provision in the world. In most parts of the ‘first world’ school education is mainly a state function, as is some form of basic medical care. There have been transfers of functions and direct provision from the state to private companies, but this has mainly occurred in developing countries where privatization has been made a condition of loans or aid funds. In the richer countries of North America, Europe and Asia, the pattern of division between direct state provision and contracting is relatively stable even though it varies between countries.

The demonstration effect of management changes in business also has different impacts in different countries. It is possible to choose what to copy from a wide range of business experiences. Some trends, such as the casualization of employment and the lengthening of working hours, are difficult to implement in some environments where there are strong trade unions or long-standing agreements. Delayering, the removal of tiers of management to cut costs and shorten lines of communication, has been attempted by some governments but not as widely as in businesses. The cancellation of whole layers of middle management that has happened in manufacturing and service businesses has not happened to the same extent in government organizations.

While governments have many reasons to change how public services are run, they also face a series of difficulties in implementing change. In some countries ‘reform’ of civil service systems is almost permanent. Japan, for example, has had public service ‘reform’ processes since the establishment in 1962 of the ‘First Provisional Commission for Administrative Reform’ to improve public sector productivity. That these efforts persist may imply that there is continuous improvement or that continuous effort is required to achieve change.

Three sets of constraints face governments trying to introduce management changes. First, there are the alliances that any reform effort faces. Just as many reforms are designed to change political power, so those holding power can use their positions to resist change if their power is challenged. Second, there are beliefs and habits of working that may be hard to change. At a superficial level these might simply be familiar ways of working that are hard to shift while at a higher level they may involve deeply held beliefs that change management programmes cannot reach. The third set of constraints is technical. If change involves abandoning traditional, hierarchical supervision, there may be problems since certain processes in public services are simply easier to organize that way. Conversely, if change involves increasing measurement and control, certain services, especially those that involve high degrees of discretion, may be adversely affected by the imposition of managerial controls.

2.1      Existing alliances

If management reforms threaten interests without compensation, people may organize to resist the changes. The most obvious organizations, the trade unions, have not been the source of significant constraint on changes. More important have been the connections among people involved in the changes. Examples include the network of people in the UK educated in a small number of schools and universities who occupied senior positions in central departments of government who were little affected by the managerial changes that affected the service delivery agencies. Other examples include the classmates from the Tokyo Law School who dominated the Japanese civil service and have proved resilient to changes and the networks of party cadres who have slowed down the reform process in the PRC. As well as these connections, there are professional networks, especially in fields such as medicine and engineering that look after their members. One good example is that of the civil engineering profession in France that managed to survive most reform efforts. Once professions have captured a ministry or other organization they are difficult to dislodge or reform.

In some countries there are powerful ministries that are able either to resist changes that affect them or to shape changes to their own advantages. A commonly powerful ministry will be the ministry of finance, which is strong in the UK, Japan and France, for example. Other strong departments include the diplomatic service or the armed forces. Sometimes there are alliances among ministries, professionals and politicians, especially factions of parties or whole parties. In Japan, factions of the ruling LDP are connected with particular ministries and commissions whose fortunes are tied to those of the faction. Reform of a powerful faction’s areas is unlikely (Flynn, 1999b).

Constitutional protection of public institutions is also a source of inertia. In federal government in Germany and Austria, for example, the fact that civil servants have a constitutional immunity from interference by politicians (an arrangement put in place to prevent a resurgence of fascist control over state institutions) means that changes in employment and management practices are difficult to bring about (Flynn and Strehl, 1996). If this is combined with a high degree of public support, it is almost impossible for politicians to bring about changes. The obvious strategy to adopt in these circumstances is to take action to reduce public support for particular occupations or professions.

These sources of power and inertia mean that ‘reform’ efforts have uneven impact. Management changes that involve a reduction in status, power or autonomy are resisted by those affected by them. The outcome depends on the balance of power and the participants’ ability to mobilize it as the reforms are implemented.

2.2      Culture and beliefs

Underlying the power of professionals and other groups involved in public service delivery is often a widespread set of beliefs about how things should be organized. For example, in some countries there is support and respect for the civil service as an institution and for civil servants as carriers of certain beliefs and values. Sometimes, as in Germany, the protection that this respect creates is backed by the constitution. This may be connected with attitudes to the role of the state and the level of taxation. In Scandinavia, efforts by Conservative parties in the late 1980s and early 1990s to reduce the role of the state and cut the very high levels of taxation were short-lived as political views swung back to more traditional values. The opposite may also be the case. Especially in societies that have a colonial history, the civil service is sometimes regarded as corrupt and self-seeking. Lack of trust in the institutions and a belief in individual and family self-reliance do not generate support for public servants.

Within the public services there may also be beliefs that are hard to change. Respect for seniority, for example, may inhibit the implementation of ideas about promotion on merit. In the United Kingdom there has been quite strong resistance to the idea of performance-related pay which is seen by some as an unworthy substitute for a sense of public duty and pride in the job. The British Prime Minister made speeches during 1999 expressing exasperation at the unwillingness of public servants to change their working habits and saying that they have an attitude that old ways of working are the best. While this impression may not be recognized by some who have worked through the Conservative years of reorganization and reform, the frustration expressed indicates that attitudes and beliefs among the public service are seen by one politician at least as a constraint on management changes.

2.3      Technical

There are some occupations to which it is difficult to apply managerial reforms of whatever type, whether the move is towards or away from mechanization. In general, those occupations that require a high degree of discretion and judgement in day-to-day work are difficult to manage in a mechanistic way. Conversely, those occupations that are routine and mechanized are hard to manage through self-management. When the mode of management includes some reliance on paying for performance these differences become more obvious. The debate about the best ways to manage types of work is not unique to the public sector: the argument about management control and worker motivation has been carried on since the Luddites opposed the separation of family life and work life and the subjection of work to managerial control. What is special about certain public sector occupations is that managerial control through measurement and specification either of outputs (the volume of work done) or outcomes (the results) in the absence of a measure of value, raises arguments about what should be measured and how that become part of the debate about who should control the work. Where the value of output can be measured (however imperfectly) by market price, the struggle for control can be focused on the management-worker relationship.

3       A variety of experience

Table 2            Some examples of ‘reform’ efforts and institutional constraints


New Zealand







Main reasons for change

Fiscal deficits

Political struggle

Fiscal deficits

Part of ‘modernization’ campaign

Loss of public confidence


Cost and impact on economy

Impact on economy


Structure change

Autonomous agencies

No (agencies in place)


Reduce number of ministries from 22 to 13

Reduce number of ministries from 40 to 29


Not recently


Control by contract

Changed relationships

Ministries and agencies

More autonomous ‘centres’

More political control over ministries.

‘Executive agencies’

State-owned enterprises to be independent of ministries



Scale reduction

Budget cuts

Budget cuts

Budget cuts

4 per cent over 4 years

25 per cent?


Cash limits

No control on numbers of staff





Railway, other sectors proposed

Education, health, state-owned enterprises

State industries


HR change

Performance and short contracts

Some flexibility

Pay changes

(some) promotion on merit

More open recruitment

New appraisal scheme

Performance bonuses






Promotion on merit

‘New Remuneration System’

Outside recruitment at senior level






Free state-owned enterprises managers from regulation




Performance targets (outputs)

Performance contracts as part of budget


Access to information

State-owned enterprises’ performance



Corruption campaign







Big pay rises in 1989

Customer service improvements




‘Polite and Considerate Public Service’ campaign


Clients’ Charter

‘Manuals’ approach to quality

Work Improvement teams


Institutional constraints

Motivation and recruitment

Problem of measuring output and outcome

Power of ministries and of professions

Political factions and network connections

Cadres networks

Power of civil servants

Nothing serious

(Sources: Flynn, 1999b; Kaneko, 1997; Lam and Chan, 1996; Flynn and Strehl, 1996; Sarji, 1996; O'Uchi, 1995; Boston et al., 1996)

Table 2 shows a summary of recent managerial changes in a variety of countries. It starts with the main driving force for change, then summarizes some of the main changes and lists the institutional constraints on changes. While such short summary phrases cannot capture the complexity and subtlety of the changes in each case, the table is sufficient to show that there are different pressures and different priorities in different local circumstances. The most common element among the countries is the fact that there are budget cuts everywhere except Singapore (the table refers to events before the Asian economic crisis of 1997/8). The other elements vary: privatization is most apparent in the People’s Republic of China; drastic restructuring of Ministries is happening in both Japan and the PRC, but not elsewhere; management of people changes vary from the use of performance contracts to changing recruitment processes. The explanation for the variety of experience lies in both the different reasons for the changes and the institutional framework within which they take place. Extension of such a description to more countries would confirm the variety of forces for change, of the main ideas in the change programmes and of the constraints on the successes of governments in their efforts. There is not a single form of ‘managerialism’ that suits all circumstances although many national governments and supra-governmental organizations contain believers in market-style ways of managing.

Claims of homogenization through globalization are exaggerated. Politicians proposing managerial changes in public services may use three devices: the appeal to national competitiveness in a globalizing world market; the hegemony of market-type ideas as opposed to any other form of governance; and an appeal to the superiority of ‘the private sector’. The Howard government used all three it its recent reforms of the Australian Public Service. All three are simplifications given credibility by their appeal to a unified language of managerial terms, often in English.

Local political and institutional circumstances mean that there is still a big difference in public services, not just between places like Jamaica and Singapore, but between schools and tax offices, welfare departments and engineering offices. Managerial type reforms of customer service concern the relationships between workers and their supervisors and between workers and the users of their services. Democratic type reforms concern the relationship between citizens and government. Both sets of changes involve a struggle for control, in one case over work and the other over the distribution and use of public funds and other resources. Both take place within the context of the power of the participants, including fractions of political parties, different sectors of business, the variety of professional and other occupational groups involved in public service and organized and disorganized groups of citizens.


Barzelay, M. (1992) Breaking Through Bureaucracy, A New Vision for Managing in Government, Berkeley, University of California Press.

Blondal, J. (1998) Budgeting in Sweden, OECD Working Papers Vol VI, 47, Paris.

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