The public choice approach to public administration started in the 1960s. Vincent Ostrom suggested using economic methods and behavioral assumptions to analyze administration. Thus, public choice approach emphasises the following :
- Consumer Oriented Approach : It lays emphasis on the element of choice, with the citizen in the role of consumer. It sees citizens as rational decision-makers who act in their self-interest. It stresses aligning government actions with citizen preferences and values.
- Institutional pluralism, that is, plurality of agencies to promote consumers’ preferences
- Democratic Decentralization: Dispersal of decision making authority to stimulate healthy and democratic competition among government agencies.
- Popular participation in administration and Debureaucratization.
- Political approach to public administration by locating public administration within the domain of politics
The public-choice approach is opposed to: (i) Centralized bureaucratic system of administration; (ii) Centralized system of planning and policy-making; (iii) Dichotomy between politics and administration; (iv) Non-committal bureaucracy; and (v) Monocentric, hierarchical bureaucratic administration.
Osborne and Gaebler, in their book “Reinventing Government” (1992), argued that governments should not directly provide all services (“rowing”) but instead focus on guiding and regulating them (“steering”) — leaving service delivery to private, voluntary, or quasi-governmental sectors.
“Rowing” = Direct service delivery
“Steering” = Policy-making, regulation, strategy, and oversight
Implications in the NPM Framework
| Area | Impact of the Shift | Examples |
| Role of the State | Government becomes a facilitator and regulator. | NITI Aayog replaced Planning Commission – focuses on policy advice, not funding. |
| Privatization/Outsourcing | Public services are increasingly outsourced to private or non-state actors. | PMJAY (Ayushman Bharat): Insurance model involving private hospitals.Private & NGO partnerships (PPP) |
| Performance Orientation | Focus on results, outcomes, KPIs. | PRAGATI platform monitors infrastructure projects using dashboards and metrics. |
| Citizen-Centric Governance | Treat citizens as clients; aim for satisfaction. | UMANG App, MyGov, online portals improve service delivery and engagement. |
| Decentralization | Local governance gains autonomy. | 73rd and 74th Amendments empowered Panchayats and Urban Local Bodies. |
| Innovation & Flexibility | Steering allows room for experimentation, innovation, and quick adaptations. | Digital India and Startup India promote new solutions in service delivery. |
Key Tools of Steering (under NPM)
- Public-Private Partnerships (PPP) – e.g. highway construction via BOT models
- Outcome budgeting – focus on results over procedures
- Citizen charters – ensure accountability and service standards
- E-Governance – steering through digital empowerment (e.g., Digital India)
- Contracting out services – municipal waste, education services, etc.
Conclusion
The shift from “rowing” to “steering” redefines governance under NPM. It promotes efficiency, innovation, and citizen-focused service delivery. However, the state must ensure transparency, accountability, and social justice while transitioning into this steering role.
During the NPM movement, Osborne and Gaebler outlined ten principles in ‘Reinventing Government’ to transform bureaucratic governance into an entrepreneurial model.
- Catalytic Government → Focus on collaboration across sectors; shift from service provision to steering initiatives.
- Community-owned Government → Empower citizens/communities to solve problems, reducing bureaucratic control.
- Competitive Government → Encourage competition among providers for efficiency and cost reduction.
- Mission-driven Government → Shift from rule-oriented to goal-oriented operations.
- Results-oriented Government → Measure performance based on outcomes, not just inputs.
- Customer-driven Government → Treat citizens as customers, offering choices and improving service accessibility.
- Enterprising Government → Focus on revenue generation through fees and enterprise funds, not just spending.
- Anticipatory Government → Proactively identify and address issues before they arise.
- Decentralized Government → Promote participatory management and teamwork over hierarchy.
- Market-oriented Government → Use market mechanisms to achieve objectives, emphasizing market forces over bureaucracy.
New Public Management (NPM) represents the second reinvention in public administration in the late 1980s and early 1990s, driven by the demands of globalization, liberalization, and privatization. It is also known as ‘Managerialism’ or ‘Entrepreneurial Government‘
- It combines elements of public choice theory and neo-Taylorism.
- NPM aims to blend elements of public and private administration, focusing on “3Es” -economy, efficiency, and effectiveness.
- It staunchly advocates a basic change in the role of state in society and economy. It emphasises on the vital role of the ‘market’ as against the ‘state’ as the key regulator of society and economy.
- Anti-Goals of NPM : NPM rejects following principles of traditional public administration.: (i) Politics-administration dichotomy (ii) Hierarchy-ridden organization (iii) Over-centralisation of power (iv) Supremacy of rules in administration
Reinventing Government : Osborne and Gaebler in “Reinventing Government” have identified the ten goals (features or principles) of new public management (entrepreneurial government).
- Catalytic Government: Government should inspire action across sectors to solve societal issues.
- Community-owned Government: Empower communities to solve their own problems.
- Competitive Government: Introduce competition to improve efficiency and reduce costs.
- Mission-driven Government: Focus on goals rather than rules.
- Results-oriented Government: Measure success by outcomes, not inputs.
- Customer-driven Government: Treat citizens as customers and provide choices and convenience.
- Enterprising Government: Focus on earning money rather than just spending it.
- Anticipatory Government: Identify and prevent problems before they arise.
- Decentralized Government: Disperse authority to lower levels and encourage teamwork.
- Market-oriented Government: Use market mechanisms to achieve goals and drive change.
These features of NPM reinvented governments worldwide through : Privatizing public undertakings, Reducing government size, Corporatizing government organizations, Cutting budgets and welfare expenditure, Reforming Civil Service structures, Implementing performance measurement and evaluation, Decentralizing authority to lower levels, Outsourcing services to private agencies, Promoting openness and transparency, Encouraging citizen participation, Establishing Citizen’s Charters and similar initiatives.
