Changing Approaches to Public Sector Management

Abstract

Chapter 1 traced the changing perspectives on the role of government in development. It was noted that crisis in the welfare and developmental states in the 1970s and 1980s called into question the post-war consensus on the active role of the state in the economy and led to the ascendancy of neo-liberal economic policies from the 1980s. It was not just the welfare state that was called into question, but also the traditional Weberian model of bureaucracy came under attack as being slow, inefficient, ineffective and unresponsive to service users. The crisis in the welfare state and the weaknesses of state bureaucracy led to the search for alternative ways of organizing and managing public services and redefining the role of the state to give more prominence to markets and competition. The shift was in response to a combination of stimuli for change driven by both theoretical arguments and pragmatic rationales. This chapter first reviews the theoretical arguments that have influenced the new trends in public service reforms, including neo-classical and new institutional economic theories. Second, it describes the more pragmatic rationales for change in the management of public services.