produce more transparent budgets from an accounting perspective, with
performance indicators for outputs and attributing costs to outputs;
. organisations engage in principal-agent[2] relationships consisting of networked
contracts tied to efficient performance;
. public service functions become disaggregated and decentralised into
quasi-market and/or quasi-contractual arrangements;
. enable competition between public agencies, firms and non-profit bodies through
the roles of provider and purchaser; and
. minimise the size of the provider agency, facilitating greater exit and entry in the
provision of public services so as to maintain an effective market for these
services.
Central to the language of NPM is that of contracts, consumers, markets and
quasi-markets. One of its major principles is that state functions of purchaser and
provider of services should be divorced so as to create either internal markets within
public organisations or to contract out service to other agencies. This organisational
reform creates the conditions for quasi-markets (that is, ones that do not allocate
resources purely on the basis of price between different private individuals). In this
view, the management and delivery of public services are made more legitimate and
accountable to the (local) communities they serve because of the efficiency of the
market. If this claim is true, what is the role of civil society in this environment? What
form should the consequently re-structured public domain take? What is the role of
public policy, its institutions and delivery agencies? These are the key questions that
this paper attempts to address.
The public sector in many countries has become subject to these reforms,
particularly in former Commonwealth countries, the USA and The Netherlands. In a
number of developing economies, these kind of reforms are attached as conditions
of structural reforms programmes, underwritten by the IMF and World Bank.