New Public Management as an Approach to Enhancing Government Performance: Conceptual Deconstruction and Measurement Mechanisms

Abstract

Over the past four decades, New Public Management (NPM) has fundamentally reshaped the architecture of public governance and administrative reform worldwide. Originating as a market-driven antidote to the rigidity and fiscal crises of the traditional Weberian bureaucracy, NPM posited that importing private-sector managerial disciplines, structural disaggregation, competition, and explicit performance measurement would systematically enhance government efficiency, responsiveness, and accountability. However, the empirical reality of NPM has revealed a profound governance paradox: while generating localized gains in technical accounting and operational turnaround, it has fragmented public capacity, eroded public service impartiality, and catalyzed pervasive measurement pathologies. This paper presents an exhaustive conceptual deconstruction of NPM and critically evaluates its performance measurement apparatus. Anchored in the theoretical traditions of Public Choice Theory, Principal-Agent Theory, Transaction Cost Economics, and Managerialism, we dissect Christopher Hood's doctrinal components and examine the shift from procedural compliance to output metrics. We deconstruct the multidimensionality of government performance—expanding the classical '3Es' (Economy, Efficiency, Effectiveness) toward Equity and Mark Moore's Public Value Theory. Crucially, the paper investigates the mechanics of public sector Performance Measurement Systems (PMS) and diagnoses their systemic unintended consequences, including Goodhart's Law, the Performance Paradox (Van Thiel & Leeuw), target gaming, cream-skimming, and Michael Power's 'Audit Society' syndrome. Finally, the article analyzes post-NPM paradigms—Digital-Era Governance (DEG), New Public Governance (NPG), and the Neo-Weberian State (NWS)—proposing an integrated, gaming-resistant, and public-value-centered framework for contemporary administrative reform.