Reinventing government

One well-known book, which was a prerequisite to the NPM, deserves a special attention. “Rethinking management: as the entrepreneurial spirit is transforming the public sector” was published by David Osborne and Ted Gabler in 1992 and it became a “bible” for those countries, which wanted to implement this new management [11].

The authors, David Osborne and Ted Gaebler, argue that American governmental bureaucracy, which was appropriate to the industrial era and times of economic and military crisis during which it was created, is not the best system of governance for the post-industrial information age.

Since the 1960s, the American public increasingly wants quality and choice of goods and services, and efficiency of producers. However, quality and choice are not what bureaucratic systems are designed to provide, nor is efficiency possible in a system of complex rules and drawn-out decision-making. Moreover, since 1982, reductions in federal funds has made it more difficult for state and local governments to meet the continued citizen demand for services and increasing expectations for quality.

The authors' prescription is entrepreneurial government, which focuses on results, decentralizes authority, reduces bureaucracy, and promotes competition both inside and outside government. Government's clients are redefined as customers who are empowered by being able to choose among providers of various services, including schools, health plans, and housing options.

This book offers a vision and a road map, and it will intrigue and enlighten anyone interested in government. The authors argue the American public sector bureaucracy is no longer an appropriate system of governance for the post-industrial information age. To meet continued citizen demand for services -- and increasing expectations of quality, choice, and efficiency -- governments should change the ways they provide services from the bureaucratic model to a more entrepreneurial one characterized by flexibility and creativity as well as conscious efforts to improve public sector incentive systems [12].

The authors discuss the various options for delivering public services, utilizing the public, private, and nonprofit sectors. They provide 10 principles, based on numerous case studies, that guide the fundamental transformation of our industrial era public systems:

• Catalytic Government

• Community-Owned Government

• Competitive Government

• Mission-Driven Government

• Result-Oriented Government

• Customer-Driven Government

• Enterprising Government

• Anticipatory Government

• Decentralized Government

• Market-Oriented Government

1. Catalytic Government: Steering Rather Than Rowing

Osborne and Gaebler argue that different sectors of the economy (public, private, and nonprofit) should provide the goods and services that each system produces best separately or as a collective effort. Because it is broad in scope and capacity and run democratically, government is best at providing policy, social equity, direction to the economy, and preventing discrimination. Due to the flexibility of the market and to the forces of competition, the private sector is best at providing quality goods and services and choices to consumer. The nonprofit, "voluntary," or "third" sector is best at providing human services and goods that do not yield a profit due to the generally small scale and local focus of nonprofit organizations. In other words, "steering," or providing guidance and direction, is what government does best, whereas "rowing," or producing goods and services, is best provided by the private or nonprofit sectors.