THE EMERGENCE OF A NEW APPROACH TO THE PUBLIC SECTOR: THE NEW PUBLIC MANAGEMENT

Abstract

introd uetion It is more than two decades since the first "Oil-Price Shoek" gaye rise to serious economic difficulties in Westem economies, and it is almost two decades since the fırst conservative govemment in a Westem country came to power on the basis of idealogy which repudiated the "post-war consensus" formed around "Keynesian mixed economy" and the "welfare state". The public sector has become topical because of profound changes in its economic and ideological environmcnt during the 1980s and 199Os. In Westem countries the renewed interest of govemments and academic circles in this field results from a number of factors interlinked in a variety of ways. Prominent among them are: the economic crisis of the 1970s; the changes in idealogical perceptions about the role of government in soeial and economic life and then the collapse of post-war consensus based on Keynesian economic management and the institutional/universal welfare state; the rise in demand for social services and fiscal crisis of the welfare state; and the search for the most suitablc institutions and techniques for promoting economy. efficiency. and effectiveness in the provision of public services in the face of oversized. overbureaucratic. and coercive administrative structures. The debate of the 1980s was about redefining the boundaries betwccn the,public and private sectors in favour of the private sector since the developed world faced the reality of financial crisis due to the deterioration of economic performance and increased demand on public services. The opposition to the over-expansion of the public sector has gained ground since the Iate 1970s and then the "withdrawal.of govemment" has become the official policy of conservative govemments in Westem Europe and North America. This idealogical climate has soon spread to other countries and has affected even same social demoerat govemments as in the cases of Australia and New Zealand. Govemments have responded to the phenomenon of "big government" by taking same measures to cutback public expenditurcs and staff in ordcr to reduce taxes; to privatise