All that glisters is not gold: new public management and corruption

Richard I C Tambulasi (2009) All that glisters is not gold: new public

management and corruption in Malawi's local governance, Development Southern Africa, 26:2, 173-188, https://doi.org/10.1080/03768350902899447

New Public Management (NPM) has been the dominant approach to public sector reform for the last few decades.  However, this approach and the wider Neoliberal economic reforms have been associated with increased corruption and inequality.  This article provides clear evidence from the Southern African country of Malawi that NPM reforms provide greater opportunities for corruption.  This is primarily based on the views of local government officials and councillors, but is also supported by the wider academic literature.

NPM was implemented in Malawi in the hope that it would improve “accountability, transparency and good governance” (page 174).  But, as in many other countries, it has “created a breeding ground for corruption” (page 174).  Despite this donors, consultants and experts are usually so confident of the benefits of NPM that its effects have not been checked and evaluated (for example, there is not a single independent study that has shown that the presumed benefits of adopting accrual accounting have actually been achieved in practice anywhere in the world).

The NPM paradigm has been summarised as ‘disaggregation + competition + incentivisation’ (Dunleavy and Margetts, 2000).  Managers are given greater powers and are incentivised with output-based performance management.  However, these increased powers and less detailed oversight mean that there are greater opportunities for personal enrichment and corruption. This is coupled with use of private sector tools of management and greater competition with the private sector (outsourcing) and within the public sector.  Governments move from being providers of services to procuring these services.  As a result, we have the contract culture and increased charging for public services. 

The link between NPM and corruption has been under researched with the common argument that it does not cause corruption directly, but it does provide greater opportunities.  Hood makes the plainest statement, claiming that the “three commonest failings” of NPM are “bribery, misappropriation and extortion; front-line abandonment; and the use of public organisations for personal ego-trips” (1998:29).

Richard interviewed 30 local councillors and 20 local government officials.  “The large majority… felt that NPM leads to increased corruption” (page 179). “All of the interviewees asserted that contracting out presents motivations, opportunities and possibilities for corruption.” (page 179).  As a result, 84% of respondents “thought contracting out led to corruption”; 78% “attributed corruption to decentralisation;  68% saw managerial autonomy as a cause of corruption”;  90% “thought user fees led to corruption; and another 90% “thought public–private partnerships led to corruption.” (page 179).

Thus this study provides over-whelming evidence that New Public Management reforms generally, and in particular contracting out and user fees, have led to greater corruption.  It would be interesting to see if these views are replicated in Nigeria.  What do state and local government officials believe has been the effect of introducing NPM style reforms in Nigeria – especially contracting out (including public–private partnerships) and user fees?  I would be interested to work with other researchers in this area.