The Detrimental Effects of New Public Management in Canada. An essay by Ian Lindsay

Transcription

1 The Detrimental Effects of New Public Management in Canada An essay by Ian Lindsay

2 This paper was originally written and submitted as an assignment for a writing studies course at Western University. This essay analyzes the effectiveness of new public management (NPM) in Canada and other western countries, arguing that NPM was overall detrimental and ineffective.

3 In 1991, political theorist Christopher Hood coined the term new public management (henceforward NPM) in his article, A Public Management for All Seasons? NPM, according to Hood, is the administrative label and shorthand name for the set of broadly similar administrative doctrines and policies regarding the reformation of the public sector which emerged in the late 1970s. 1 NPM was first implemented and exemplified by then- British Prime Minister Margaret Thatcher, and later applied by the executive governments in several commonwealth countries, such as the US and Canada. NPM was a widely accepted government reformation in the 1980s, as many politicians were elected on the platforms of increased government accountability, a decrease in government spending, and an overall of public sector management, by borrowing elements of management from the private sector. As the NPM reform was applied to various commonwealth and Westminster system countries, this essay will have a particular focus on the reformation and implementation in Canada, analyzing the policies and NPM system implemented by former Prime Minister Brian Mulroney, and their effects on the Canadian economy and citizens. Despite their initial acceptance from Canadian citizens, and certain areas of success, this essay will argue that new public management reformation in Canada was detrimental for two particular reasons. First, government accountability experienced a notable decline, and second the public service spending increased dramatically under the Mulroney administration. These two outcomes would largely demonstrate the failure of a successful NPM reformation in the Canadian federal 1 Christoper Hood A Public Management For All Seasons? (1991)

4 government, making the argument that the wave of NPM success was a concept utilized as a response to dissatisfied citizens. To properly analyze and argue the ineffectiveness of the NPM reformation in Canada, a detailed understanding of its doctrine, history, and significance must first be examined. According to the Hood article, NPM reformation is a concept that is composed of seven elements, listed as: Hands on professional management in the public sector, explicit standards and measures of performance, greater emphasis on output controls, shift to disaggregation of units in the public sector, shift to greater competition in public sector, stress on private- sector styles of management practice, and stress on greater discipline and parsimony in resource use. 2 While the Mulroney administration did not directly speak to these particular elements, the platform for his 1984 election greatly emphasized a reduction in government spending, or parsimony in resource use, and radical changes to the bureaucracy, which include a shift to competition with the public sector, as the Mulroney administration would privatize certain federal corporations, such as Air Canada which was privatized in Mulroney s platform for the 1984 election was not based on radically new ideas, however. Instead, it was conceived from the success of previous NPM reformations, in the UK and the US. Despite being properly defined and evaluated by Hood in 1991, the first instance of NPM actually occurred in May of 1979, under Conservative Party leader Margaret Thatcher, who was elected British Prime Minister after the Election of that year. According to Peter 2 C. Hood Public Management (1991) 3 International Directory of Company History Air Canada History (2004)

5 Aucoin, during her 12- year tenure as Prime Minister, Thatcher would implement several policies aimed at reducing the dominance of the liberal welfare state by using extensive interventions in the socio- economic order. 4 Her desire to reduce the state was based upon the adamant reformation of three dimensions of British governance: First, the power of the civil service was to be diminished to make the state apparatus more responsive to political direction. Second, private sector management practices were to be introduced to promote economy and efficiency in government. And third, the freedom of individual citizens was to be enhanced to counter the dominance of state control over the design and delivery of public services. 5 The adamant reformation of British governance would experience the Westminster system effect defined as a democratic parliamentary system of government modeled after the politics of the United Kingdom as several commonwealth countries, such as the US, Australia, and New Zealand modeled NPM reform policies after the UK reformation. The success of the NPM reform in the UK in the early 1980s would provide the particular inspiration for Republican nominee Ronald Reagan s platform, as he too would advocate for a reduction in civil service to promote the private sector and the freedom of individuals. As this essay will highlight, however, Canada was country that utilized the Westminster system, having modeled their NPM reform on that of the UK. Unlike the other Westminster system countries, however, Canada had certain deviations in their public reformation, as they borrowed ideas not just from the UK s model of public 4 Peter Aucoin The New Public Management: Canada in Comparative Perspective (p. 1) 5 P. Aucoin The New Public Management (p. 1)

6 reformation, but from the US model established under President, Ronald Reagan in Despite the heavy borrowing of concepts from two prominent countries and the presence of center- right ideologies of the executives in each country, the Mulroney government failed to increase the Canadian government accountability, largely due to the fact that the administration lacked a coherent plan regarding NPM reformation, and failed to implement a system that would measure accountability. According to political theorist, Peter Aucoin, even before the advent of the new public management, the effectiveness of the Westminster system of ministerial responsibility and accountability was in question. 6 The sweeping reform of NPM in the UK and the US would further the public s interest in government accountability, as the new public management emphasizes the need for accountability in order to improve performance. 7 Unlike the British and American public management reformations under the respective Thatcher and Reagan administrations, where the executives established comprehensive initiatives to improve performance, the public management reformation in Canada occurred somewhat loosely, arguably lacking initiative and attention. According to political theorists Pollitt and Bouckaert, the Mulroney administration lacked any grand design and instead gave management issues only intermittent attention, having developed only specific initiatives without a coherent overall plan. 8 As a result, the Canadian version of the public management reformation either did not increase, or worse slightly decreased the federal government s accountability. Despite being elected on a platform of 6 P. Aucoin The New Public Management (p. 218) 7 P. Aucoin The New Public Management (p. 218) 8 Christopher Pollitt and Geert Bouckaert Public Management Reform (p. 250)

7 radical changes to the federal bureaucracy, the Mulroney administration ultimately implemented very few initiatives, most of which occurred within the first few years of his duration in office. In addition, the Canadian citizens had a general disinterest in the Mulroney administration towards the end of his reign, as his approval ratings percentage would greatly decrease. Shortly after his election in 1984, the Mulroney administration set to work establishing a NPM reformation, with Deputy Prime Minister Erik Neilson establishing a task force to adopt the private- sector style of management, while also creating a new position within each ministry, an executive- appointed chief- of- staff position. 9 The Mulroney administration in the late 1980s would fail to introduce an assessment for public sector or government accountability, and by 1990, a federally published article titled Public Service 2000: The Renewal of the Public Service of Canada was released, which stated that the missing link all along has been effective accountability for the use of the authorities with which people have been entrusted. 10 As the paper was published in 1990, it was released towards the end of Mulroney s tenure, indicating that the Mulroney administration failed to increase government accountability, and that accountability was still an issue for the Canadian public, despite the push for public management reform and increased accountability. The demonstrated failure to increase government accountability was not the only flaw that the Canadian federal government would face regarding NPM. A second, somewhat hypocritical, conflict would emerge under the Mulroney administration, 9 Pollitt and Bouckaert Public Management Reform (p. 250) 10 P. Aucoin The New Public Management (p. 218)

8 which may have been an additional factor for why government accountability decreased, but was certainly detrimental to the federal government for separate reasons. Prior to the 1984 election, the Mulroney administration engaged in a significant campaign that, according to Pollitt and Bouckaert, had been sharply critical of large government in Ottawa, as the administration had promised frugality and radical change to the bureaucracy if elected. 11 Like Margaret Thatcher, and Ronald Reagan had done in UK and the US respectively, the Mulroney administration aimed to reduce the presence of the state by limiting the budget and the number of federal employees. The Mulroney campaign made particular promises to cut the size of the federal government, and ultimately reduce both the spending on public services and the public debt. The outcome of the 1984 election saw the Mulroney administration in the executive position, and under the direction of Mulroney, the reality of his campaign began to emerge the public debt would not be decreased, while the government expenditure would increase. According to the 1987 report from the Organisation for Economic Co- operation and Development (OCED) titled The Control and Management of Government Expenditure, under the Mulroney administration, the Canadian government s strategic aim for federal spending was to reduce spending 5% by 1990 from the 1985 level, or 1% annually a percent that was considered a global norm in OECD countries who implemented similar NPM reforms. 12 In reality however, the Canadian government would only 11 Pollitt and Bouckaert Public Management Reform (p. 250) 12 OECD The Control and Management of Government Expenditure (p. 73)

9 decrease spending by 0.2% in the entire five- year period, as the government expenditures as percent of GDP would decrease from 47.1 in 1985, to 46.9 in The failure to reduce spending by 1% annually would not be the only fiscal conflict stemming from the NPM reformation in Canada. According to a 1997 article, political theorists Harder and Lindquist argue that between 1984 and 1993, where the Mulroney administration was solely in power, the Canadian net public debt increased from $168 billion to just over $500 billion. 14 Having increase public debt by nearly three times what it was in 1984 was hugely detrimental for the Mulroney administration, which had actively campaigning for increased government accountability while attempting to practice a reduction in spending. The hypocrisy, coupled with the failure to increase the government s economy and efficiency would be a sort of catalyst for Mulroney s resignation as Prime Minister in As demonstrated by the decrease in government accountability, coupled with the increase in federal government spending, the NPM reform was, for the most part, detrimental for the Canadian government and it s citizens. Despite NPM successes in the UK under Thatcher or in the US under Regan, the Canadian government ultimately had no strategic plan of action to implement a radical change in federal governance. As a result, the Canadian system of NPM was largely based on its predecessors of the commonwealth countries, who felt similar struggles, but had strategic goals in mind to overcome the justify increased spending and initial decrease in government accountability. In Canada, however, as the initial results of a 13 Pollitt and Bouckaert Public Management Reform (p. 137) 14 Pollitt and Bouckaert Public Management Reform (p. 247)

10 NPM reformation became undesired and detrimental, the federal government seemingly seized after a relatively short period of time. The early federal initiatives, including the 1984 review under Deputy Prime Minister Erik Neilson, that aimed to make government programs simple, more understandable and more accessible to clientele, and the 1985 Increased Ministerial Authority and Accountability, designed to give ministers and department manager s greater flexibility to allocate resources 15 were ultimately disregarded in only a few years, as the federal government and Mulroney administration shifted focused, and placed greater emphasis on the government deficit. Despite the decline of perceived government accountability, and the increase of public deficit spending, the failure of the Mulroney administration to implement an immediate NPM reform can arguably be seen as a positive outcome. The slowly introduced changes of public management reformation can be seen as somewhat valuable for the Canadian government, as the government and citizens were allowed to see the effects of similar reform in the US and the UK and determine if, and which reforms were necessary for a the Canadian public sector. 15 Pollitt and Bouckaert Public Management Reform (p. 250)

11 References Air Canada History. (2004, February 20). Retrieved March 16, 2015, from histories/air- canada- history/ Aucoin, P. (1995). The New Public Management: Canada in Comparative Perspective (pp. 1, ). Montréal: Institute for Research on Public Policy. Hood, C. (1991). A Public Management For All Seasons? Public Administration, Vol. 69, Pollitt, C., & Bouckaert, G. (2000). Public Management Reform: A Comparative Analysis (pp. 137, ). Oxford: Oxford University Press. The Control and Management of Government Expenditure. (1987). Paris, France: Organisation for Economic Co- operation and Development.