ABSTRACT
Introduction The past 30 years have seen many governments around the world aggressively alter their bureaucratic structures and managerial processes in an attempt to improve the productivity and performance of the administrative state. This worldwide trend has been based on a model of “economic individualism” based upon market processes, downsizing public institutions and making public employees more productive (Bozeman 2007). In short, the public sector has been moving toward a business-like model of governance that emphasizes managerialism; champions efficiency; favours competition, outsourcing, and privatization; and recasts government organizations as suppliers, public managers as entrepreneurs, and citizens as customers. This new public sector is conforming more and more to the normal disciplines of the private sector. Public choice theory has provided the theoretical backdrop for New Public Management (NPM), and market orientation has formed its backbone. One common denominator is a bold effort to separate politics from administration; thus there is an emphasis on agencification and autonomization in some countries. The movement also emphasizes managerialism and touts efficiency. Its driving themes are “let managers manage” and find the “one-best-way” to “make government work better and cost less”. Competition is introduced by contracting out and privatization, thus forcing public administration to become more market-oriented and business-like. During 2008 and 2009 events on the international stock markets began to raise questions about the effectiveness of private market-based models to deliver. The financial crisis that led to the nationalization of banks in a number countries has led to the state reasserting its role in a number of domains. Many of the problems associated with the global financial collapse are those very values and characteristics that scholars have generally been critical of in the NPM movement and have pointed out many of its flaws; e.g. poor accountability mechanisms, devaluation of public sector values, tendency to reduce political questions to administrative trivia, and lowered emphasis on the core administrative values of equity and fairness (see for example Bozeman 2007). Many have noted the
fundamental trade-off between efficiency and accountability, and the related dysfunctions of managerialism. Others have argued that short-run increases in efficiency are being purchased at a long-range cost in governmental and administrative capacity. While it is possible that developments in the very early part of the twenty-first century will come to represent a paradigm change in our understanding of the ways in which public service delivery is managed and organized, public management researchers have been slow to place NPM’s theoretical infrastructure under the empirical microscope. This study attempts such a test. We operationalize the theory of market orientation and examine its effects on public service performance in the context of English local government. Market orientation is at the extreme end of the NPM reform movement, because it implies that governmental organizations will perform better if they behave like private organizations that operate in a competitive market environment and compete with rival firms to meet consumer demands. We believe that this is an opportune time to undertake this examination and that the evidence gleaned can be used to assist thinking about the role of the state. In the next section, the literature is reviewed and the theory of market orientation is introduced. Then, we develop a model of public service performance and describe how the key variables – including market orientation and performance – are measured. Our data and methods are described next. We then estimate two models and report the results, which are lacklustre for the theory of market orientation in general and the market orientation-performance hypothesis specifically. Finally, we conclude by discussing some limitations of this study, some suggestions for future research, and some broader implications for public administration theory and practice.
